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Our Business
Revenue
We sell the majority of our products and services under bundled
lease arrangements, in which our customers pay a monthly amount
for the equipment, maintenance, services, supplies and financing
over the course of the lease agreement. These arrangements are
beneficial to our customers and to us since, in addition to
customers receiving a bundled offering, these arrangements allow
us to maintain the customer relationship for future sales of
equipment and services.
We analyze these arrangements to determine whether the
equipment component meets certain accounting requirements such
that the equipment fair value should be recorded as a sale at lease
inception, that is, a sales-type lease. We allocate the remaining
portion of the monthly minimum payments to the various elements
of the lease based on fair value – service, maintenance, supplies and
financing – that we generally recognize over the term of the lease
agreement, and that we report as “post sale revenue”. In those
arrangements that do not qualify as sales-type leases, which have
increased as a result of our services-led strategy, we recognize
revenue over the term of the lease agreement, whether rental or
operating lease, and report it in “post sale revenue.” Our accounting
policies for revenue recognition for leases and bundled
arrangements are included in Note 1 – Summary of Significant
Accounting Policies in the Consolidated Financial Statements in our
2008 Annual Report.
Revenues by geography
(in millions)
$2,475
$6,011 $9,122
�$9,122 U.S.
�$6,011 Europe
�$2,475 Other Areas
Revenues by geography based on the location of the unit reporting
the revenue and includes exports sales. About 50% of our revenue
is generated from customers outside the U.S.
18 Xerox 2008 Annual Report
• Creating new differentiated products and services;
• Enabling cost competitiveness through disruptive products and
services;
• Enabling new ways to serve customers and
• Creating new business opportunities that drive future growth