Xerox 2010 Annual Report Download - page 30

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28
Management’s Discussion
Xerox 2010 Annual Report
Summary Results
Revenue
Revenues for the three years ended December 31, 2010 were as follows:
Pro-forma(3)
Revenues Percent Change Change Percent of Total Revenue
(in millions) 2010 2009 2008 2010 2009 2010 2010 2009 2008
Revenue:
Equipment sales $ 3,857 $ 3,550 $ 4,679 9% (24)% 9% 18% 24% 26%
Supplies, paper and other 3,377 3,096 3,646 9% (15)% 4% 15% 20% 21%
Sales 7,234 6,646 8,325 9% (20)% 7% 33% 44% 47%
Service, outsourcing and rentals 13,739 7,820 8,485 76% (8)% 1% 64% 51% 48%
Finance income 660 713 798 (7)% (11)% (7)% 3% 5% 5%
Total Revenues $ 21,633 $ 15,179 $ 17,608 43% (14)% 3% 100% 100% 100%
Segments:
Technology $ 10,349 $ 10,067 $ 11,714 3% (14)% 3% 48% 66% 66%
Services 9,637 3,476 3,828 177% (9)% 3% 44% 23% 22%
Other 1,647 1,636 2,066 1% (21)% 1% 8% 11% 12%
Total Revenues $ 21,633 $ 15,179 $ 17,608 43% (14)% 3% 100% 100% 100%
Memo:
Annuity Revenue (1) $ 17,776 $ 11,629 $ 12,929 53% (10)% 1% 82% 77% 73%
Color (2) $ 6,397 $ 5,972 $ 6,669 7% (10)% 7% 30% 39% 38%
9% increase in equipment sales revenue, including a 1-percentage
•
point negative impact from currency. Growth in install activity was
partially offset by price declines of approximately 5% and mix.
7% increase in color revenue
• (2), including a 1-percentage point
negative impact from currency reflecting:
– 5% increase in color annuity revenue, including a 1-percentage
point negative impact from currency. The increase was driven by
higher printer supplies sales and higher page volumes.
– 12% increase in color equipment sales revenue, including a
2-percentage point negative impact from currency. The increase was
driven by higher installs of new products.
– 9% growth in color pages(4). Color pages(4) represented 23% of total
pages in 2010, while color MIF represented 31% of total MIF.
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:
Revenue2010
Total revenues increased 43% compared to the prior year. Our
consolidated 2010 results include ACS results subsequent to February 5,
2010, the effective date of the acquisition. On a pro-forma(3) basis, total
revenue grew 3%. Currency had a negligible impact on total revenues
during 2010. Total revenues included the following:
53% increase in annuity revenue
• (1), or 1% on a pro-forma(3) basis, with
a 1-percentage point negative impact from currency. The components
of annuity revenue were as follows:
– Service, outsourcing and rentals revenue of $13,739 million
increased 76%, or 1% on a pro-forma(3) basis, and included a
negligible impact from currency. The increase was driven by Business
Process Outsourcing (“BPO”) revenue that partially offset the declines
in technical service revenue which were driven by a continued but
stabilizing decline in pages. Total digital pages declined 4%, while
color pages increased 9%. During 2010 digital MIF increased by 1%
and color MIF increased by 15%.
– Supplies, paper and other sales of $3,377 million increased 9%,
or 4% on a pro-forma(3) basis, with a 1-percentage point negative
impact from currency. Growth in supplies revenues was partially
offset by a decline in paper sales.