Xerox 2012 Annual Report Download - page 50

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Management’s Discussion
48
Contractual Cash Obligations and Other Commercial Commitments and Contingencies
At December 31, 2012, we had the following contractual cash obligations and other commercial commitments and contingencies:
(in millions) 2013 2014 2015 2016 2017 Thereafter
Total debt, including capital lease obligations (1) $ 1,039 $ 1,093 $ 1,259 $ 954 $ 1,002 $ 3,063
Interest on debt (1) 421 363 293 234 177 777
Minimum operating lease commitments (2) 636 425 265 157 74 83
Defined benefit pension plans 195 – – – – –
Retiree health payments 80 80 79 77 75 339
Estimated Purchase Commitments:
Flextronics (3) 498 – – – – –
Fuji Xerox (4) 2,069 – – – – –
Other (5) 169 131 43 16 1 –
Total $ 5,107 $ 2,092 $ 1,939 $ 1,438 $ 1,329 $ 4,262
(1) Refer to Note 12 – Debt in the Consolidated Financial Statements for additional information regarding debt.
(2) Refer to Note 7 – Land, Buildings, Equipment and Software, Net in the Consolidated Financial Statements for additional information related to minimum operating lease commitments.
(3) Flextronics: We outsource certain manufacturing activities to Flextronics. The amount included in the table reflects our estimate of purchases over the next year and is not a contractual
commitment. In the past two years, actual purchases from Flextronics averaged approximately $600 million per year.
(4) Fuji Xerox: The amount included in the table reflects our estimate of purchases over the next year and is not a contractual commitment.
(5) Other purchase commitments: We enter into other purchase commitments with vendors in the ordinary course of business. Our policy with respect to all purchase commitments is to record
losses, if any, when they are probable and reasonably estimable. We currently do not have, nor do we anticipate, material loss contracts.
Loan Covenants and Compliance
At December 31, 2012, we were in full compliance with the
covenants and other provisions of our Credit Facility and Senior
Notes. We have the right to terminate the Credit Facility without
penalty. Failure to comply with material provisions or covenants of
the Credit Facility and Senior Notes could have a material adverse
effect on our liquidity and operations, and our ability to continue
to fund our customers’ purchase of Xerox equipment.
Refer to Note 12 – Debt in the Consolidated Financial Statements for
additional information regarding debt arrangements.