Xerox 2008 Annual Report Download - page 48

Download and view the complete annual report

Please find page 48 of the 2008 Xerox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

Management’s Discussion
Non-GAAP Financial Measures
We have reported our financial results in accordance with generally
accepted accounting principles (“GAAP”). A reconciliation of the
following non-GAAP financial measures to the most directly
comparable financial measures calculated and presented in
accordance with GAAP are set forth below:
Adjusted Revenue
We discussed the revenue growth for the year ended December 31,
2008 using non-GAAP financial measures. To understand trends in
the business, we believe that it is helpful to adjust the revenue
growth rates to illustrate the impact of the acquisition of GIS by
including their estimated revenue for the comparable 2007 and
2006 periods. We refer to this adjusted revenue as “As Adjusted” in
the following reconciliation table. Revenue “As Adjusted” adds
GIS’s revenues from January 1, 2006 to May 8, 2007 to our 2006
and 2007 reported revenue. Management believes these measures
give investors an additional perspective on revenue trends, as well
as the impact to the Company of the acquisition of GIS that was
completed in May 2007.
Year Ended December 31 % Change
(in millions) 2008 2007 2006 2008 2007
Equipment Sales
Revenue:
As Reported $ 4,679 $ 4,753 $ 4,457 (2)% 7%
As Adjusted $ 4,679 $ 4,938 $ 4,992 (5)% (1)%
Post Sale
Revenue:
As Reported $12,929 $12,475 $11,438 4% 9%
As Adjusted $12,929 $12,681 $12,000 2% 6%
Total Revenues:
As Reported $17,608 $17,228 $15,895 2% 8%
As Adjusted $17,608 $17,619 $16,992 — 4%
Adjusted Effective Tax Rate
The effective tax rate for the year ended December 31, 2008 is
discussed using non-GAAP financial measures that exclude the
effects of charges associated with an equipment write-off; second,
third and fourth quarter 2008 restructuring and asset impairments;
certain litigation matters and the settlement of certain previously
unrecognized tax benefits. Management believes that it is helpful
to exclude these effects to better understand and analyze the
current period’s effective tax rate given the discrete nature of
these items.
Year Ended December 31, 2008
(in millions)
Pre-Tax
Income
Income
Taxes
Effective
Tax Rate
As Reported $ (114) $(231) 202.6%
Restructuring and asset
impairment charges 426 134
Equipment write-off 39 15
Litigation 774 283
Tax settlements — 41
As Adjusted $1,125 $ 242 21.5%
Management believes that these non-GAAP financial measures
provide an additional means of analyzing the current period results
against the corresponding prior period results. However, these
non-GAAP financial measures should be viewed in addition to, and
not as a substitute for, the Company’s reported results prepared in
accordance with GAAP.
Forward Looking Statements
This Annual Report contains forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995. The
words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,”
“should” and similar expressions, as they relate to us, are intended
to identify forward-looking statements. These statements reflect
management’s current beliefs, assumptions and expectations and
are subject to a number of factors that may cause actual results to
differ materially. Information concerning these factors is included
in our 2008 Annual Report on Form 10-K filed with the Securities
and Exchange Commission (“SEC”). We do not intend to update
these forward-looking statements, except as required by law.
46 Xerox 2008 Annual Report