Xerox 2007 Annual Report Download - page 63

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Production
Revenue
2007 Production revenue of $4,771 million increased
4%, including a 4-percentage point benefit from currency,
reflecting:
• 9% increase in post sale and other revenue, including
a 5-percentage point benefit from currency, as growth
from digital products more than offset declines in
revenue from older light lens technology.
• 3% decrease in equipment sales revenue, including a
5-percentage point benefit from currency, reflecting
growth in production color systems offset by declines
in black-and-white production printing systems and
light production and an increased proportion of
equipment installed under operating lease contracts
where revenue is recognized over-time in post sale.
• 6% growth in installs of production color products
driven by DocuColor 242/252/260 family, Docucolor
5000 and iGen3 activity.
• 8% decline in installs of production black-and-white
systems reflecting a decline in installs of high-volume
and light production systems.
2006 Production revenue of $4,579 million increased
1%, including a 1-percentage point benefit from currency,
reflecting:
• 3% increase in post sale and other revenue reflecting
growth in color products which was partially offset by
declines in revenue from high-end black-and-white
digital products and older light lens technology.
• 2% decrease in equipment sales revenue, including a
1-percentage point benefit from currency, as price
declines of less than 5% was partially offset by strong
color install activity.
• 74% growth in installs of production color products
largely driven by strong activity in the DocuColor
240/250, DocuColor 5000 and DocuColor 7000/8000,
as well as an increase in iGen3 installs.
• Installs of production black-and-white systems were
flat year-over-year. This included 16% growth in
installs of black-and-white light production systems,
reflecting continued success of the 4110 light
production system, which was more than offset by
21% declines in installs of high-end black-and-white
systems.
Operating Profit
2007 Operating profit of $448 million increased $45
million from 2006. The increase is primarily the result of
higher gross profit and lower R,D&E, partially offset by an
increase in bad debt expense.
2006 Operating profit of $403 million declined $24
million from 2005. This decrease is a result of reduced
gross margins impacted by product mix, price declines and
an increase in bad debt expense, partially offset by a
decrease in R,D&E spending and selling expenses.
Office
Revenue
2007 Office revenue of $8,304 million increased 9%,
including a 3-percentage point benefit from currency,
reflecting:
• 10% increase in post sale and other revenue,
reflecting the inclusion of GIS as well as growth from
color multifunction devices and color printers.
• 9% increase in equipment sales revenue, reflecting the
inclusion of GIS as well as color multifunction products
install growth.
• 65% color multifunction device install growth led by
strong demand for Xerox WorkCentre products.
• 5% increase in installs of black-and-white copiers and
multifunction devices, including 4% growth in
Segment 1&2 products (11-30 ppm) and 7% growth
in Segment 3-5 products (31-90 ppm) that includes
the 95 ppm device with an embedded controller.
• 10% decline in color printer installs due to lower OEM
sales.
2006 Office revenue of $7,625 million was relatively
flat year over year, including a negligible currency effect.
• 2% increase in post sale and other revenue, including
a benefit from currency of 1-percentage point. Growth
in revenue from color multifunction products,
black-and-white and color printers, were partially
offset by declines in black-and-white multifunction
and older light lens technology.
Xerox Annual Report 2007 61