Xerox 2007 Annual Report Download - page 50

48
We market our Phaser line of color and monochrome laser-class and solid ink printers
primarily through offi ce information technology industry resellers, who typically access
our products through distributors. In 2007, we expanded our distribution partnerships
in North America by recruiting an expanded set of information technology resellers and
enhancing our network of independent agents. We also continued to increase the product
offerings available through a two-tiered distribution model in Europe and DMO.
We are increasing our use of partners to expand our market coverage. Through reseller
alliances with Fujifi lm Graphics Systems and Fujifi lm Imaging Systems, we distribute our
production products to graphic communications customers and the photo market industries.
In 2007 we signed a contract with Fujifi lm Graphics Systems in Europe to compliment the
contracts in the U.S. and Canada. We have launched in six western European countries and
will continue to expand throughout 2008. We also signed a reseller contract with Fujifi lm
Imaging Systems in both the U.S. and Canada to enable a channel for production products
that support the digital photo specialty application market. We also have an alliance with
Electronic Data Systems (EDS) which is designed to integrate EDS’ information technology
(IT) services with our document management systems and services to provide customers
with full IT infrastructure support. Overall, through The Xerox Connection partner program,
we have over 125 partners who work with us to provide solutions.
In Europe, Africa, the Middle East, India, and parts of Asia, we distribute our products
through Xerox Limited, a company established under the laws of England, and related
non-U.S. companies all of which we refer to as Xerox Limited. Xerox Limited enters into
distribution agreements with unaffi liated third parties covering distribution of our
products in some of the countries located in these regions, and previously entered into
agreements with unaffi liated third parties covering distribution of our products in Iran,
Sudan, and Syria. Iran, Sudan, and Syria, among others, have been designated as state
sponsors of terrorism by the U.S. Department of State and are subject to U.S. economic
sanctions. We maintain an export and sanctions compliance program and believe that
we have been and are in compliance with U.S. laws and government regulations for these
countries. In addition, we had no assets, liabilities, or operations in these countries other
than liabilities under the distribution agreements. After observing required prior notice
periods, Xerox Limited terminated its distribution agreements related to Sudan and Syria
in August 2006 and terminated its distribution agreement related to Iran in December
2006, and now has only legacy obligations such as providing spare parts and supplies
to these third parties. In 2007, we had total revenues of $17.2 billion, of which approxi-
mately $7.7 million was attributable to Iran and less than $0.25 million in total was
attributable to Sudan and Syria. As a result of the termination of these agreements,
we anticipate that our revenues attributable to these countries will decline.
In January 2006, Xerox Limited entered into a fi ve-year distribution agreement with
an unaffi liated third party covering distribution of our products in Libya. Libya is also
designated as a state sponsor of terrorism by the U.S. Department of State. The decision
to enter into this distribution agreement was made in light of recent U.S. federal govern-
ment actions that have lifted the countrywide embargo previously imposed on Libya.
Our sales in Libya through this distribution agreement will be subject to our export and
sanctions compliance program and will be according to the U.S. laws and government
regulations that relate to Libya.
Our business