Xerox 2008 Annual Report Download - page 66

Notes to the Consolidated
Financial Statements
(in millions, except per share data and
unless otherwise indicated)
Condensed financial data of Fuji Xerox for the three calendar years
ended December 31, 2008 was as follows:
2008 2007 2006
Summary of Operations
Revenues $11,190 $10,218 $ 9,859
Costs and expenses 10,451 9,565 9,119
Income before income taxes 739 653 740
Income taxes 287 252 281
Minorities’ interests 765
Net income $ 445 $ 395 $ 454
Balance Sheet
Assets:
Current assets $ 4,734 $ 4,242 $ 3,731
Long-term assets 5,470 4,639 4,184
Total Assets $10,204 $ 8,881 $7,915
Liabilities and Shareholders’ Equity:
Current liabilities $ 3,534 $ 3,322 $2,954
Long-term debt 996 900 685
Other long-term liabilities 1,095 746 590
Minorities’ interests in equity of
subsidiaries 23 25 21
Shareholders’ equity 4,556 3,888 3,665
Total Liabilities and Shareholders’
Equity $10,204 $ 8,881 $7,915
Yen/U.S. Dollar exchange rates used to translate above are as
follows:
Exchange Basis 2008 2007 2006
Summary of Operations Weighted
Average Rate 103.31 117.53 116.36
Balance Sheet Year-End Rate 90.28 112.55 118.89
In 2008, 2007 and 2006, we received dividends of $56, $37 and
$41, respectively, which were reflected as a reduction in our
investment. Additionally, we have a technology agreement with
Fuji Xerox whereby we receive royalty payments for their use of our
Xerox brand trademark, as well as rights to access their patent
portfolio in exchange for access to our patent portfolio.
In 2008, 2007 and 2006, we earned royalty revenues under our
Technology Agreement of $112, $108 and $117, respectively,
which are included in Service, outsourcing and rental revenues in
the Consolidated Statements of Income. We also have
arrangements with Fuji Xerox whereby we purchase inventory from
and sell inventory to Fuji Xerox. Pricing of the transactions under
these arrangements is based upon negotiations conducted at
arm’s length. Our purchase commitments with Fuji Xerox are in the
normal course of business and typically have a lead time of three
months. Purchases from and sales to Fuji Xerox for the three years
ended December 31, 2008 were as follows:
2008 2007 2006
Sales $ 162 $ 186 $ 168
Purchases $2,150 $1,946 $1,677
In addition to the amounts described above, in 2008, 2007 and
2006, we paid Fuji Xerox $34, $30 and $28, respectively, and Fuji
Xerox paid us $5, $3 and $3, in 2008, 2007 and 2006, respectively,
for unique research and development. As of December 31, 2008
and 2007, amounts due to Fuji Xerox were $194 and $205,
respectively.
64 Xerox 2008 Annual Report