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24 Xerox 2009 Annual Report
Management’s Discussion
– 5% decrease in color post sale revenue including a 3-percentage
point negative impact from currency. The decline was partially driven
by lower channel color printer supplies purchases. Color represented
40% and 37% of post sale revenue in 2009 and 2008, excluding
GIS,(3) respectively.
– 22% decrease in color equipment sales revenue including a
2-percentage point negative impact from currency and lower
installs driven by the impact of the economic environment.
Color sales represented 53% and 50% of total equipment
sales in 2009 and 2008, excluding GIS,(3) respectively.
– 10%(4) growth in color pages. Color pages(4) represented
21% and 18% of total pages in 2009 and 2008, respectively.
Revenue2008
Revenue increased 2% compared to the prior year and was flat when
including GIS in our 2007 results.(5) Currency had a 1-percentage point
positive impact on total revenues. Total revenues included the following:
• 4% increase in post sale revenue, or 2% including GIS in our 2007
results.(5) This included a 1-percentage point benefit from currency.
Growth in GIS, color products and document management services
offset the declines in high-volume black-and-white printing systems,
black-and-white multifunction devices and light lens product revenue.
The components of post sale revenue increased as follows:
– 3% increase in service, outsourcing and rentals revenue to
$8,485 million reflected the full-year inclusion of GIS and growth
in document management services.
– Supplies, paper and other sales of $3,646 million grew 6% year-over-
year due to the full-year inclusion of GIS, as well as growth in color
supplies and paper sales.
Revenue2009
Revenue decreased 14% compared to the prior year, including
a 3-percentage point negative impact from currency. Although
moderating in the fourth quarter 2009, worldwide economic
weakness negatively impacted our major market segments during
the year. Total revenues included the following:
• 10% decrease in post sale revenue including a 3-percentage
point negative impact from currency. The components of post sale
revenue decreased as follows:
– 8% decrease in service, outsourcing and rentals revenue to
$7,820 million, reflecting a 3-percentage point negative impact
from currency and an overall decline in page volume. Total digital
pages declined 6% despite an increase in color pages of 10%.
– Supplies, paper and other sales of $3,096 million decreased 15%
due primarily to currency, which had a 2-percentage point negative
impact, and declines in channel supplies purchases, including lower
purchases within developing markets, and lower paper sales.
• 24% decrease in equipment sales revenue, including a 1-percentage
point negative impact from currency. The overall decline in install
activity was the primary driver, along with price declines of approxi-
mately 5% across the Production and Office segments.
• 10% decrease in color revenue(2) including a 2-percentage point
negative impact from currency. Color revenue of $5,972 million in
2009 comprised 43% of total revenue, excluding GIS,(3) compared
to 41% in 2008 reflecting:
Summary Results
Revenue
Revenues for the three years ended December 31, 2009 were as follows:
Year Ended December 31, Percent Change
(in millions) 2009 2008 2007 2009 2008
Equipment sales $ 3,550 $ 4,679 $ 4,753 (24)% (2)%
Post sale revenue(1) 11,629 12,929 12,475 (10)% 4 %
Total Revenue $ 15,179 $ 17,608 $ 17,228 (14)% 2 %
Reconciliation to Consolidated Statements of Income
Sales $ 6,646 $ 8,325 $ 8,192
Less: Supplies, paper and other sales (3,096) (3,646) (3,439)
Equipment Sales $ 3,550 $ 4,679 $ 4,753
Service, outsourcing and rentals $ 7,820 $ 8,485 $ 8,214
Finance income 713 798 822
Add: Supplies, paper and other sales 3,096 3,646 3,439
Post Sale Revenue $ 11,629 $ 12,929 $ 12,475
Memo: Color(2) $ 5,972 $ 6,669 $ 6,356 (10)% 5 %