Xerox 2005 Annual Report Download - page 40

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
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Revenues by segment for the years ended 2005, 2004 and 2003 were as follows:
(in millions) Production Office DMO Other Total
2005
Equipment sales $ 1,368 $ 2,436 $ 558 $ 157 $ 4,519
Post sale and other revenue 2,830 4,670 1,245 1,562 10,307
Finance income 342 512 9 12 875
Total Revenue $ 4,540 $ 7,618 $ 1,812 $ 1,731 $15,701
2004
Equipment sales $ 1,358 $ 2,431 $ 503 $ 188 $ 4,480
Post sale and other revenue 2,880 4,644 1,194 1,590 10,308
Finance income 352 552 10 20 934
Total Revenue $ 4,590 $ 7,627 $ 1,707 $ 1,798 $15,722
2003
Equipment sales $ 1,188 $ 2,426 $ 466 $ 170 $ 4,250
Post sale and other revenue 2,943 4,622 1,285 1,604 10,454
Finance income 376 594 12 15 997
Total Revenue $ 4,507 $ 7,642 $ 1,763 $ 1,789 $15,701
Production
2005 Equipment sales increased 1% from 2004, primarily reflecting
install growth with a negligible impact from currency, partially
offset by price declines of approximately 5% and product mix.
Production system install activity for 2005 included the following:
•30% growth in installs of production color products largely
driven by strong iGen3 and DocuColor 240, 250, 7000 and
8000 activity.
•9% growth in installs of black and white production systems,
reflecting the success of the 4110 light production system,
as well as growth in production publishing systems.
2004 Equipment sales increased 14% from 2003, as improved
product mix, installation growth and favorable currency of
4-percentage points more than offset price declines of approxi-
mately 3%. Production system install activity for 2004 included
the following:
•Strong 2004 production color equipment install growth of
11% due to increased installations driven by the DocuColor
5252 and Xerox iGen3 digital color production press products.
•2004 production monochrome equipment install growth of
7% driven by the success of the Xerox 2101 copier/printer and
strong demand for the Xerox Nuvera 100 and 120 copier/printers,
more than offset declines of 32% in production publishing,
printing and older technology light lens products.
Equipment Sales
Equipment sales reflect the results of our technology investments
and the associated product launches, as approximately two-thirds
of 2005 equipment sales were generated from products launched
over the past two years. During 2005, we launched 49 new
products including 6 products in the fourth quarter.
2005 Equipment sales of $4.5 billion increased 1% from
2004, reflecting:
•Negligible impact from currency.
•Growth in lower-end office black and white devices, color
printers, as well as office and production color systems, which
more than offset declines in other monochrome office and
monochrome production products.
•Growth in color equipment sales of $306 million, or 22%,
from the prior comparable period. Color equipment sales
represented 38% of total equipment sales versus 32% for
the prior-year comparable period.
2004 Equipment sales of $4.5 billion increased 5% from
2003, reflecting:
•3-percentage point benefit from currency.
•Market acceptance of our color and digital light production
products.
•Continued equipment sales growth, reflecting the success
of numerous products launched in the past two years, as
the majority of 2004 equipment sales was generated from
these products.
•Continued color equipment sales growth in 2004 representing
approximately one-third of total equipment sales.
Xerox Annual Report 2005