Xerox 2009 Annual Report Download - page 88

86 Xerox 2009 Annual Report
Notes to the Consolidated
Financial Statements
Dollars in millions, except per share data and unless otherwise indicated.
The 2009, 2008 and 2007 computation of diluted earnings per share
did not include the effects of 39 million, 29 million and 23 million stock
options, respectively, because their respective exercise prices were
greater than the corresponding market value per share of our common
stock. In addition, the common shares issuable with respect
to convertible securities were not included in the 2008 computation
of diluted EPS because to do so would have been anti-dilutive.
Note 19 – Subsequent Events
On January 20, 2010, we acquired Irish Business Systems (“IBS”) for
approximately $31. This acquisition expands our reach into the small
and mid-size business market in Ireland. IBS has eight offices located
throughout Ireland and is a managed print services provider and the
largest independent supplier of digital imaging and printing solutions
in Ireland.
On February 5, 2010, we completed the acquisition of ACS. Refer to
Note 3 – Acquisitions, Note 11 – Debt and Note 17 – Shareholders’
Equity for further information regarding the acquisition and funding
associated with it.
On February 25, 2010, we provided notice of termination for
convenience of the Amended and Restated Program Agreement dated
as of October 27, 2005 (as amended to date, the “Program Agreement”)
by and among General Electric Capital Corporation (“GECC”), Xerox,
Xerox Lease Funding LLC and Xerox Lease Equipment LLC. The Program
Agreement will terminate effective no later than August 25, 2010.
Termination of the Program Agreement will result in the termination
of other agreements relating to our vendor finance relationship with
GECC, including the Amended and Restated Loan Agreement dated
as of October 21, 2002 (as amended to date, the “Loan Agreement”)
between Xerox Lease Funding LLC and GECC. As of December 31, 2009,
approximately $2 was outstanding under the Loan Agreement and as
of February 16, 2010 all amounts outstanding under the Loan
Agreement had been repaid.
All outstanding stock options at December 31, 2009 were exercisable,
with an aggregate intrinsic value of $13, a weighted-average remaining
contractual life of 2.17 years and a weighted-average exercise price
of $10.13.
The following table provides information relating to stock option
exercises for the three years ended December 31, 2009:
2009 2008 2007
Total intrinsic value of
stock options $ — $4 $61
Cash received 1 6 65
Tax benefit realized for stock
option tax deductions — 2 22
In connection with the acquisition of ACS in February 2010 (see
Note 3 – Acquisitions for further information), we issued approximately
96,700 thousand options in exchange for ACS options.
Note 18 – Earnings per Share
The following table sets forth the computation of basic and diluted
earnings per share of common stock for the three years ended
December 31, 2009 (shares in thousands):
2009 2008 2007
Basic Earnings per Share:
Net income attributable
to Xerox $ 485 $ 230 $ 1,135
Weighted-average common
shares outstanding 869,979 885,471 934,903
Basic Earnings per Share $ 0.56 $ 0.26 $ 1.21
Diluted Earnings per Share:
Net income attributable
to Xerox $ 485 $ 230 $ 1,135
Interest on Convertible
securities, net 1 — 1
Adjusted Net Income
Available to
Common Shareholders $ 486 $ 230 $ 1,136
Weighted-average common
shares outstanding 869,979 885,471 934,903
Common shares issuable
with respect to:
Stock options 462 3,885 8,650
Restricted stock and
performance shares 7,087 6,186 7,396
Convertible securities 1,992 — 1,992
Adjusted Weighted-Average
Shares Outstanding 879,520 895,542 952,941
Diluted Earnings per Share $ 0.55 $ 0.26 $ 1.19
Dividends declared per
common share $ 0.17 $ 0.17 $ 0.0425