Xerox 2007 Annual Report Download - page 64

• 3% decrease in equipment sales revenue, including a
benefit from currency of 1-percentage point. Price
declines of less than 10% more than offset the growth
in office color multifunction and black-and-white
products. In addition, an increased proportion of office
equipment installed under operating lease contracts
were recognized in post sale revenue.
• 35% increase in installs of office color multifunction
systems.
• 8% increase in installs of black-and-white digital
copiers and multifunction devices. Install growth was
driven by 15% growth in Segments 3-5 devices (31-90
ppm) and 7% growth in Segments 1&2 devices (11-30
ppm).
• 5% decline in color printers as compared to 111%
growth in the comparable 2005 periods. The decline
reflects lower 2006 OEM sales.
Operating Profit
2007 Operating profit of $973 million increased $141
million from 2006. The increase was primarily due to the
inclusion of GIS and higher gross profits partially offset by
higher SAG expenses.
2006 Operating profit of $832 million increased $13
million from 2005, reflecting the reduction in SAG
expenses partially offset by lower gross profit.
DMO
Revenue
2007 DMO revenue of $2,155 million increased 11%
from 2006, reflecting:
• Strong performance in Eurasia, Central and Eastern
Europe and the Middle East.
• 12% increase in post sale and other revenue, driven
primarily by increased supplies, document
management services and paper revenue.
• 9% increase in equipment sales revenue, reflecting
install growth in office multifunction devices, light
production black-and-white and production color
systems. DMO equipment sales consist of Office and
Production products, including a large proportion of
sales in Segment 1&2 office products.
2006 DMO revenue of $1,938 million increased 7%
from 2005, reflecting:
• 7% increase in post sale and other revenue, driven
primarily by growth in revenue from supplies, color
products and services.
• 8% increase in equipment sales revenue, reflecting
strong sales of Segments 1&2 devices, as well as install
growth in light production black-and-white and
production color systems.
Operating Profit
2007 Operating profit of $134 million increased $10
million from 2006 reflecting higher gross profit primarily
from increased revenue, partially offset by an increase in
SAG expenses.
2006 Operating profit of $124 million increased $60
million from 2005, reflecting higher gross profit and
reduction in SAG expenses.
Other
Revenue
2007 Other revenue of $1,998 million increased 14%,
including a 3-percentage point benefit from currency,
primarily reflecting the inclusion of GIS as well as
increased paper and value-added services revenues. Paper
comprised approximately 40% of Other segment revenue.
2006 Other revenue of $1,753 million increased 1%
from 2005 reflecting:
• 11% decrease in equipment revenue driven by lower
equipment component sales included in value-added
services.
• 3% increase in post sale and other revenue from 2005,
including a benefit from currency of 1-percentage
point, due primarily to increased paper sales and
value-added services. Paper comprised approximately
two-thirds of the 2006 Other segment post sale and
other revenue.
Operating Profit
2007 Operating profit of $33 million increased $2
million from 2006 reflecting higher revenue as well as
lower currency exchange losses and litigation charges,
62