Xerox 2012 Annual Report Download - page 7

5Xerox 2012 Annual Report
the economic uncertainty across most regions, we put our focus on
reducing the cost base while expanding distribution through indirect
channels. This year, we’re ramping up marketing investments and
introducing new offerings while broadening our channel partnerships –
positioning us better to pursue profitable opportunities.
So, although 2012 presented our business with some obstacles, we
moved forward in refining our business model, improving operational
efficiency and growing our Services business – all while delivering value
to you. Here’s a summary of how we performed:
• Net income of $1.2 billion; adjusted net income of $1.4 billion.1
• GAAP earnings per share of 88 cents; adjusted earnings per share
of $1.03.1
• Total revenue of $22.4 billion, down 1 percent or flat in constant
currency1 from 2011.
-Total Services revenue of $11.5 billion, up 6 percent or up
7 percent in constant currency.1
-Total Document Technology revenue of $9.5 billion, down
8 percent or down 6 percent in constant currency.1
• Operating margin of 9.3 percent.1
• Operating cash flow of $2.6 billion.
• Share repurchase of $1.05 billion and $255 million in dividends.
Priorities Drive Performance
We participate in a $600 billion market. And we continue to tackle
it aggressively on four fronts.
First: Managing our Services business for growth. I mentioned
earlier that revenue from our Services business is now more than half
of our total revenue and is growing at a steady pace. We expect it will
grow to two-thirds of our revenue by 2017. My confidence in the long-
term success of our Services business stems from the diversity of our
offerings and the deep expertise we’ve established to work closely with
clients on their important business processes:
• When a major automobile company selected Xerox to handle their
employee benefits program, we were able to build, manage and
support their open enrollment process in a matter of months.
• Just as a telecommunications company decided to start selling their
new product in Brazil, they tapped us to open, staff and lead their
in-country customer care service.
• As soon as the Affordable Care Act in the United States became
more of a certainty for state governments, several of our government
clients looked to us for help establishing Health Insurance Exchanges
and strengthening the administrative backbone of their Medicaid
and other health and welfare programs.
I could go on but the bottom line is that our Services business will
continue to grow because of the breadth and depth of our offerings
and, more important, because of our respected experience, innovation
and expertise that wins us trust from our clients. That trust helped us
sign new contracts during 2012 worth more than $2 billion in annual
revenue and to win 85 percent of the contracts that were up for
renewal during the year. It’s trust we never take for granted.
Michelin wanted to outsource F&A, so they made tracks
to our door.
Our Challenge: Bring efficiency and cost savings to global
Finance and Accounting operations.
Bottom-line Results: Michelin was initiating a major
transformation program for its Finance function. To improve
performance, reduce costs and enhance overall quality, the
company chose us to provide global outsourced Finance and
Accounting services. We built an F&A solution that today meets
company requirements and service level expectations.