Xerox 2008 Annual Report Download - page 24

Our Business
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 have 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 with distributors servicing
Sudan and Syria in August 2006 and terminated its distribution
agreement with the distributor servicing Iran in December 2006.
Now, Xerox only has legacy obligations to third parties such as
providing spare parts and supplies to these third parties. In 2008,
we had total revenues of $17.6 billion, of which approximately $7.4
million was attributable to Iran and less than $0.2 million in total
was attributable to Sudan and Syria.
In January 2006, Xerox Limited entered into a five-year distribution
agreement with an unaffiliated 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 government 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 conducted according to
the U.S. laws and government regulations that relate to Libya.
Customer Financing
We finance a large portion of customer purchases of Xerox
equipment through our bundled lease arrangements. We believe
that financing facilitates customer acquisition of Xerox technology
and enhances our value proposition to the customer while
providing Xerox a profitable revenue stream and a strong return on
equity.
As a result of our customer financing program, we benefit by
gaining in-depth knowledge of the products being leased and a
deep understanding of the customer base and their use of our
technology. This knowledge allows us to effectively manage the
credit and residual value risk normally associated with financing.
Our financing risk is further mitigated because the majority of our
lease contracts are non-cancelable and include cancellation
penalties approximately equal to the full value of the lease
receivables.
Because our lease contracts permit customers to pay for
equipment over time rather than at the date of installation, we
maintain a certain level of debt to support our investment in these
lease contracts. We fund our customer financing activity through a
combination of cash generated from operations, cash on hand,
borrowings under bank credit facilities and proceeds from capital
market offerings. At December 31, 2008 we had $7.3 billion of
Globally, we have 57,100 direct employees. We have over 7,500 Sales Professionals,
over 13,000 Managed Service Employees at customer sites and over 13,000
Technical Service Employees. In addition, we have over 6,500 Agents and
Concessionaires and over 10,000 resellers.
22 Xerox 2008 Annual Report