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Xerox Corporation
57
Xerox Annual Report 2005
Selected financial information for our operating segments for each of the years ended December 31, 2005, 2004 and 2003,
respectively, was as follows (in millions):
Production Office DMO Other Total
2005(1)
Information about profit or loss:
Revenues $ 4,198 $ 7,106 $ 1,803 $ 1,719 $14,826
Finance income 342 512 9 12 875
Total Segment revenues $ 4,540 $ 7,618 $ 1,812 $ 1,731 $15,701
Interest expense(2) $ 121 $ 179 $ 8 $ 249 $ 557
Segment profit (loss)(3) 427 819 64 151 1,461
Equity in net income of unconsolidated affiliates – – 4 94 98
2004(1)
Information about profit or loss:
Revenues $ 4,238 $ 7,075 $ 1,697 $ 1,778 $14,788
Finance income 352 552 10 20 934
Total Segment revenues $ 4,590 $ 7,627 $ 1,707 $ 1,798 $15,722
Interest expense(2) $ 114 $ 176 $ 12 $ 406 $ 708
Segment profit (loss)(3) 511 779 35 (125) 1,200
Equity in net income of unconsolidated affiliates – – 3 148 151
2003(1)
Information about profit or loss:
Revenues $ 4,131 $ 7,048 $ 1,751 $ 1,774 $14,704
Finance income 376 594 12 15 997
Total Segment revenues $ 4,507 $ 7,642 $ 1,763 $ 1,789 $15,701
Interest expense(2) $ 120 $ 197 $ 34 $ 533 $ 884
Segment profit (loss)(3) 466 790 172 (440) 988
Equity in net income of unconsolidated affiliates – 1 65158
(1) Asset information on a segment basis is not disclosed, as this information is not separately identified and internally reported to our chief executive officer.
(2) Interest expense includes equipment financing interest as well as non-financing interest, which is a component of Other expenses, net.
(3) Depreciation and amortization expense is recorded in cost of sales, research, development and engineering expenses and selling, administrative and general expenses and is
included in the segment profit (loss) above. This information is neither identified nor internally reported to our chief executive officer. The separate identification of this
information for purposes of segment disclosure is impracticable, as it is not readily available and the cost to develop it would be excessive.
The following is a reconciliation of segment profit to pre-tax income (in millions):
Years Ended December 31, 2005 2004 2003
Total Segment profit $ 1,461 $ 1,200 $ 988
Unallocated items:
Restructuring and asset impairment charges (366) (86) (176)
Provisions for certain litigation matters(1) (114) – (239)
Initial provision for WEEE Directive (“FSP 143-1”)(2) (26) – –
Losses from Hurricane Katrina (15) – –
2002 credit facility fee write-off – – (73)
Other expenses, net (12) 2 (6)
Allocated item:
Equity in net income of unconsolidated affiliates (98) (151) (58)
Pre-tax income $ 830 $ 965 $ 436
(1) 2005 provision for litigation includes $102 related to MPI arbitration panel ruling, including $13 for interest expense, and $12 related to other legal matters.
Refer to Note 16 – Contingencies for further discussion. The 2003 provision for litigation includes the $239 charge related to the court, approved settlement of the
Berger v.RIGP litigation discussed in Note 14 – Employee Benefit Plans.
(2) See Note 1 – “New Accounting Standards and Accounting Changes” for discussion of this charge.