Xerox 2006 Annual Report Download - page 19

and generate post sale and financing revenue.
Seventy-two percent of our 2006 total revenue was post
sale and financing revenue that includes equipment
maintenance and consumable supplies, among other
elements. We sell the majority of our equipment through
sales-type leases that we record as equipment sale
revenue. Equipment sales represented 28% of our 2006
total revenue.
We expect this large, recurring post sale revenue
stream to be approximately three times the equipment sale
revenue over the life of a lease. Thus, the number of
equipment installations is a key indicator of post sale and
financing revenue trends. The mix of color pages is
another significant indicator of post sale revenue trends
because color pages use more consumables per page than
black-and-white. In addition, market development,
particularly within the Eligible Offset market, is key to
increasing pages and we have leading tools and resources
to develop this large market opportunity.
Acquisitions
To further our business goals, we made two
acquisitions in 2006. We completed the purchase of
Amici LLC, (“Amici”), a provider of electronic-
discovery (“e-discovery”) services, primarily supporting
litigation and regulatory compliance. E-discovery is the
identification, filtering, production, and storage of
relevant data from paper or electronic documents, such as
e-mail, text files, memos, databases, presentations and
spreadsheets. Amici, now branded Xerox Litigation
Services, provides comprehensive litigation discovery
management services, including the conversion, hosting
and production of electronic and hard copy documents.
They also provide consulting and professional services to
assist attorneys in the discovery process.
We also purchased XMPie, Inc. (“XMPie”) to
further strengthen our position in the growing market for
personalized communications and cross-media marketing
campaigns involving digital printing, e-mail and
customized websites. XMPie helps graphic designers,
marketing companies and print providers develop
creative, customized marketing programs. XMPie
provides software for variable data publishing ranging
from the desktop to servers, from print to multi-channel
campaigns, from personalized images to personalized
booklets, and from out-of-the-box solutions to a platform
for creating custom solutions that fit unique business,
integration and workflow requirements.
Segment Information
Our reportable segments are Production, Office,
Developing Markets Operations (“DMO”), and Other. We
present operating segment financial information in
Note 2 – Segment Reporting to the Consolidated
Financial Statements, which we incorporate by reference
here. We have a very broad and diverse base of
customers, both geographically and demographically,
ranging from small and medium businesses to graphic
communications companies, governmental entities,
educational institutions and large (Fortune 1000)
corporate accounts. None of our business segments
depends upon a single customer, or a few customers, the
loss of which would have a material adverse effect on our
business.
Office $7,625 million
Our Office segment serves global, national and small to medium-size commercial
customers as well as government, education, and other public sector customers.
Production $4,579 million
We provide high-end digital monochrome and color systems designed for customers
in the graphic communications industry and for large enterprises.
Other $1,753 million
The Other segment primarily includes revenue from paper sales, wide-format systems,
and value-added services.
DMO $1,938 million
DMO includes the marketing, sales, and servicing of Xerox products, supplies, and
services in Latin America, Brazil, the Middle East, India, Eurasia and Central-Eastern
Europe, and Africa.
Reviews by Business Segment
47.97%
12.19%
28.81%
11.03%
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