Xerox 2011 Annual Report Download - page 36

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Management’s Discussion
34
Revenue Results Summary
Total Revenue
Revenue for the three years ended December 31, 2011 was as follows:
Revenues Change Pro-forma(1) Percent of Total Revenue
(in millions) 2011 2010 2009 2011 2010 2011 2010 2011 2010 2009
Equipment sales $ 3,856 $ 3,857 3,550 —% 9% —% 9% 17% 18% 23%
Annuity revenue 18,770 17,776 11,629 6% 53% 2% 1% 83% 82% 77%
Total Revenue $ 22,626 $ 21,633 15,179 5% 43% 2% 3% 100% 100% 100%
Memo: Color(2) $ 6,795 $ 6,446 5,972 5% 8% 5% 8% 30% 30% 39%
Reconciliation to
Consolidated
Statements
of Income:
Sales $ 7,126 $ 7,234 6,646 (1)% 9% (2)% 7% 31% 33% 43%
Less: Supplies,
paper and
other sales (3,270) (3,377) (3,096) (14)% (15)% (20)%
Equipment Sales $ 3,856 $ 3,857 3,550 —% 9% —% 9% 17% 18% 23%
Service, outsourcing
and rentals $ 14,868 $ 13,739 7,820 8% 76% 4% 1% 66% 64% 52%
Add: Finance income 632 660 713 (4)% (7)% (4)% (7)% 3% 3% 5%
Add: Supplies,
paper and
other sales 3,270 3,377 3,096 (3)% 9% (4)% 4% 14% 15% 20%
Annuity Revenue $ 18,770 $ 17,776 $ 11,629 6% 53% 2% 1% 83% 82% 77%
Revenue2011
Total revenues increased 5% compared to the prior year. Our consolidated
2011 results include a full year of revenues from ACS, which was acquired
on February 5, 2010. On a pro-forma(1) basis, including ACS’s estimated
2010 revenues for the period from January 1 through February 5 in our
historical 2010 results, the total revenue for 2011 grew 2%. Total revenue
growth included a 2-percentage point positive impact from currency. Total
revenues included the following:
•Annuity revenue increased 6%, or 2% on a pro-forma(1) basis, and
included a 1-percentage point positive impact from currency. Annuity
revenue is comprised of the following:
– Service, outsourcing and rentals revenue of $14,868 million
increased 8%, or 4% on a pro-forma(1) basis, and included a
2-percentage point positive impact from currency. The increase
was primarily due to growth in BPO and DO revenue in our Services
segment, partially offset by a decline in pages. Total digital pages
declined 3% despite a 2% increase in digital MIF.
– Supplies, paper and other sales of $3,270 million decreased 3%,
or 4% on a pro-forma(1) basis, and included a 1-percentage point
positive impact from currency. The decrease primarily reflected a
decline in paper sales.
•Equipment sales revenue was flat and included a 1-percentage point
positive impact from currency. Favorable product mix in high-end
products was offset by price declines in the range of 5% to 10%.
•5% increase in color(2) revenue, including a 2-percentage point positive
impact from currency reflecting:
– 6% increase in color(2) annuity revenue, with a 2-percentage point
positive impact from currency. The increase was driven by higher
page volumes of 9% on color devices, as well as an increase in color
device MIF of 14%.
– 4% increase in color(2) equipment sales revenue, including a
2-percentage point positive impact from currency. This increase was
driven by higher installs of new mid-range products.
– Color(2) pages represented 27% of total pages in 2011 while color
device MIF represented 35% of total MIF.