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XEROX ANNUAL REPORT 2006
7
Our commitment to citizenship
So, too, is our continued focus on being a good corporate citizen. It’s a cherished part
of our heritage and an essential part of our future. I urge you to read the snapshot
description of our activities in this report. We’re making progress in reducing greenhouse
gas emissions. We supported more than 500 non-profit organizations; spent more than
$370 million with minority-, women- and veteran-owned businesses; strengthened our
efforts to protect our forests; sent thousands of volunteers into the communities in which
we work and live; and much more.
Last year, we published our first Report on Global Citizenship. It provides a comprehensive
look at how we run our company – from serving our customers and taking care of the
environment to conducting our business with integrity and giving back to our communities.
The report is available in its entirety at www.xerox.com/citizenship.
Our commitment to you
We believe our track record is good, our strategy is sound and our business model is
robust. We’re participating in a $117 billion market and we’re positioned to compete
aggressively for every dollar of it. In 2007 you’ll see continued activity that strengthens
our leadership in color, accelerates the New Business of Printing, expands our offerings
in services, and broadens our offerings and distribution in the small and medium business
market. All this fuels our profitable annuity stream, which accounts for more than
70 percent of our revenue.
At the same time, you can expect us to remain diligent on reducing costs, generating cash
and prioritizing profitability and earnings growth. We know that you have invested in Xerox
because you have confidence in us. It’s an awesome responsibility that we embrace and
take very seriously.
The thing I love the most about this company is the people. They have what I like to call
a “steely optimism.” They do whatever it takes to make Xerox successful, to help our
customers be successful and to give you a good return on your investment. Because of
them, I have every confidence that 2007 will be another good year for Xerox – and for you.
Anne M. Mulcahy
Chairman and Chief Executive Officer
2006
Non-GAAP Reconciliation
(in $ millions, except per-share data)
Full-Year ’06 Full-Year ’05
Net Income Diluted EPS Net Income Diluted EPS
As Reported $1,210 $ 1.22 $ 978 $ 0.94
Adjustments
Restructuring and Asset Impairment 254 0.25 247 0.24
Tax Audit Benefits (494) (0.50) (343) (0.34)
Litigation Matters 68 0.07 84 0.08
Credit Facility Fee 9 0.01
Integic Gain (58) (0.06)
EU Waste Directive 18 0.02
Hurricane Katrina Loss 9 0.01
Accounting Change 8 0.01
Adjusted $1,047 $ 1.05 $ 943 $ 0.90