Xerox 2006 Annual Report Download - page 112

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QUARTERLY RESULTS OF OPERATIONS (Unaudited) (in millions, except per-share data)
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Full
Year
2006
Revenues ................................................. $3,695 $3,977 $3,844 $4,379 $15,895
Costs and Expenses(1) ....................................... 3,487 3,712 3,753 4,135 15,087
Income from Continuing Operations before Income Taxes, Equity
Income, Discontinued Operations and Cumulative Effect of Change
in Accounting Principle .................................... 208 265 91 244 808
Income tax expenses (benefits)(2) .............................. 47 22 (416) 59 (288)
Equity in net income of unconsolidated affiliates .................. 39 17 29 29 114
Net Income ............................................... $ 200 $ 260 $ 536 $ 214 $ 1,210
Basic Earnings per Share(3) ................................... $ 0.20 $ 0.27 $ 0.55 $ 0.22 $ 1.25
Diluted Earnings per Share(3) ................................. $ 0.20 $ 0.26 $ 0.54 $ 0.22 $ 1.22
2005
Revenues ................................................. $3,771 $3,921 $3,759 $4,250 $15,701
Costs and Expenses(1) ....................................... 3,482 3,804 3,682 3,903 14,871
Income from Continuing Operations before Income Taxes, Equity
Income, Discontinued Operations and Cumulative Effect of Change
in Accounting Principle .................................... 289 117 77 347 830
Income tax expenses (benefits)(2) .............................. 116 (233) 29 83 (5)
Equity in net income of unconsolidated affiliates .................. 37 20 23 18 98
Income from discontinued operations, net ....................... — 53 — — 53
Cumulative effect of change in accounting principle, net ........... — — (8) — (8)
Net Income ............................................... $ 210 $ 423 $ 63 $ 282 $ 978
Basic Earnings per Share(3) ................................... $ 0.20 $ 0.43 $ 0.05 $ 0.28 $ 0.96
Diluted Earnings per Share(3) ................................. $ 0.20 $ 0.40 $ 0.05 $ 0.27 $ 0.94
(1) Costs and expenses include restructuring and asset impairment charges of $36, $110 and $239 for the second,
third and fourth quarters of 2006, respectively, and $85, $194, $17 and $70 for the first, second, third and fourth
quarters of 2005, respectively. In addition, the third quarter 2006 includes $68 for litigation matters related to
probable losses on Brazilian labor-related contingencies (See Note 16). The 2005 first quarter includes a $93 gain
from the sale of our equity interest in Integic (See Note 21) and the third quarter 2005 includes $115 of expense
from the MPI arbitration panel ruling and probable losses for other legal matters (See Note 16).
(2) The first and third quarters of 2006 include $24 and $448 of income tax benefits, respectively, related to the
favorable resolution of certain tax matters from the 1999-2003 IRS audit. The second quarter of 2006 included
$46 of income tax benefits from the resolution of certain tax issues associated with foreign tax audits. The 2005
second quarter included $343 of net income benefits related to the finalization of the 1996-1998 IRS audit, of
which $233 was included in income taxes, $57 was included in other expenses, net and $53 was included in
discontinued operations (See Note 15).
(3) The sum of quarterly earnings per share may differ from the full-year amounts due to rounding, or in the case of
diluted earnings per share, because securities that are anti-dilutive in certain quarters may not be anti-dilutive on a
full-year basis.
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