Xerox 2014 Annual Report Download - page 134

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Treasury Stock
We account for the repurchased common stock under the cost method and include such treasury stock as a
component of our common shareholder's equity. Retirement of treasury stock is recorded as a reduction of
Common stock and Additional paid-in capital at the time such retirement is approved by our Board of Directors.
The following provides cumulative information relating to our share repurchase programs from their inception in
October 2005 through December 31, 2014 (shares in thousands):
Authorized share repurchase programs $8,000
Share repurchase cost $6,455
Share repurchase fees $10
Number of shares repurchased 580,029
In 2014, the Board of Directors authorized an additional $1.5 billion in share repurchase bringing the total
cumulative authorization to $8 billion. As of December 31, 2014, approximately $1.5 billion of that authority
remained available.
The following table reflects the changes in Common and Treasury stock shares (shares in thousands):
Common Stock
Shares
Treasury Stock
Shares
Balance at December 31, 2011 1,352,849 15,508
Stock based compensation plans, net 17,343 —
Contributions to U.S. pension plan(1) 15,366 —
Acquisition of Treasury stock — 146,278
Cancellation of Treasury stock (146,862) (146,862)
Balance at December 31, 2012 1,238,696 14,924
Stock based compensation plans, net 28,731 —
Acquisition of Treasury stock — 65,179
Cancellation of Treasury stock (58,102) (58,102)
Conversion of 2014 9% Notes 996 —
Balance at December 31, 2013 1,210,321 22,001
Stock based compensation plans, net 13,965 —
Acquisition of Treasury stock — 86,536
Cancellation of Treasury stock (100,928)(100,928)
Conversion of 2014 9% Notes 996 —
Balance at December 31, 2014 1,124,354 7,609
_____________________________
(1) Refer to Note 16 - Employee Benefits Plans for additional information.
Stock-Based Compensation
We have a long-term incentive plan whereby eligible employees may be granted restricted stock units (RSUs),
performance shares (PSs) and non-qualified stock options. We grant stock-based awards in order to continue to
attract and retain employees and to better align employees' interests with those of our shareholders. Each of these
awards is subject to settlement with newly issued shares of our common stock. At December 31, 2014 and 2013, 50
million and 59 million shares, respectively, were available for grant of awards.
Stock-based compensation expense was as follows:
Year Ended December 31,
2014 2013 2012
Stock-based compensation expense, pre-tax $ 91 $ 90 $ 125
Income tax benefit recognized in earnings 35 34 48
Restricted Stock Units: Compensation expense is based upon the grant date market price. The compensation
expense is recorded over the vesting period, which is normally three years from the date of grant, based on
management's estimate of the number of shares expected to vest.
Performance Shares: Prior to 2014, we granted officers and selected executives PSs that vest contingent upon
meeting pre-determined Revenue, Earnings per Share (EPS) and Cash Flow from Operations targets. If the annual
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