Xerox 2013 Annual Report Download - page 44

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following Management’s Discussion and Analysis (MD&A) is intended to help the reader understand the results
of operations and financial condition of Xerox Corporation. MD&A is provided as a supplement to, and should be
read in conjunction with, our Consolidated Financial Statements and the accompanying notes. Throughout the
MD&A, we refer to various notes to our Consolidated Financial Statements which appear in Item 8 of this 2013
Form 10-K, and the information contained in such notes is incorporated by reference into the MD&A in the places
where such references are made.
Throughout this document, references to “we,” “our,” the “Company,” and “Xerox” refer to Xerox Corporation and its
subsidiaries. References to “Xerox Corporation” refer to the stand-alone parent company and do not include its
subsidiaries.
Executive Overview
With revenues of $21.4 billion, we are the world's leading global enterprise for business process and document
management solutions. We provide services, technology and expertise to enable our customers - from small
businesses to large global enterprises - to focus on their core business and operate more effectively.
2013 marked the 75th anniversary of the first xerographic image, created by Chester Carlson to simplify the process
of copying information. This xerographic process is still at the heart of most office printers and copiers around the
world. From printers and multifunction devices, to business services and solutions for transportation, education, and
healthcare, the Company’s engineers, scientists and researchers are continuing to invent ways that make work, and
life, a little simpler.
We are a leader across large, diverse and growing markets estimated at over $600 billion. Headquartered in
Norwalk, Connecticut, the 143,100 people of Xerox serve customers in more than 160 countries providing business
services, printing equipment and software for commercial and government organizations. In 2013, 32 percent of our
revenue was generated outside the U.S.
We organize our business around two main segments: Services and Document Technology.
• Our Services segment is comprised of business process outsourcing (BPO), information technology
outsourcing (ITO) and document outsourcing (DO) services.
A key priority in 2013 was continued growth in our services business. Revenue from Services grew 3% in 2013,
reflecting growth from all three service offerings, BPO, ITO and DO, and represented 55% of our total revenues.
Growth was below our expectations primarily due to lower than expected contributions from acquisitions and the
effects of the run-off of our student loan business. In 2013, our Services signings grew as we continued to win in
the marketplace. In 2013, we introduced a new government healthcare Medicaid platform and supported the
launch of health insurance exchanges in several states. Across our services portfolio, the diversity of our
offerings and the differentiated solutions we provide, enable us to deliver greater value to our customers.
• Our Document Technology segment is comprised of our document technology and related supplies, technical
service and equipment financing (excluding contracts related to document outsourcing). Our product groups
within this segment include Entry, Mid-Range and High-End products.
In 2013 we focused on maintaining our leadership in Document Technology as well as improving our
productivity to reduce our cost base. This strategy included the introduction of new products like our
ConnectKey® enabled devices as well as steadily growing our channel operations to expand our reach to small
and mid-sized businesses (SMB). Although Document Technology revenues declined 6% in 2013, in line with
expectations, segment margin was 10.8%, at the high end of our targeted range of 9% to 11%.
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