Xerox 2014 Annual Report Download - page 18

our global scale and ensure service delivery excellence across our BPO offerings. We also have initiatives
underway to continue improving our software platform implementation capability, which includes establishing
strategic partnerships to supplement our internal capabilities. With our ongoing efforts and targeted initiatives in
both Services and Document Technology, we look to maintain or increase our profitability and overall competitive
positioning.
Engage, Develop and Support Our People
Our Services and Document Technology offerings and know-how are a powerful combination, and are supported by
a talented global workforce focused on delivering value to our customers. We continue to nurture and develop our
employees’ talents by investing in processes and systems to equip them with modern tools that will make it easier
for them to perform their jobs more effectively and manage their careers, and by providing them opportunities for
growth and development throughout their careers.
Annuity-Based Business Model and Shareholder-Centered Capital Allocation
Our business is based on an annuity model that provides significant recurring revenue and cash generation. In
2014, 84 percent of our total revenue was annuity-based; this includes contracted services, equipment
maintenance, consumable supplies and financing, among other elements. The remaining 16 percent of our revenue
comes from equipment sales, either from lease agreements that qualify as sales for accounting purposes or outright
cash sales.
We remain committed to using our strong cash flow to deliver shareholder returns now and in the future through a
balanced capital allocation strategy that includes share repurchase, acquisitions and dividends.
Acquisitions and Divestitures
The following is a summary of our acquisitions and divestitures in 2014. Additional details can be found in Note 3 -
Acquisitions and Note 4 - Divestitures, in the Consolidated Financial Statements.
Services Acquisitions and Divestiture
In the Services segment, consistent with our strategy to expand our offerings and geographic reach through
acquisitions and to actively manage our product portfolio, we acquired or divested the following companies:
•Invoco Holding GmbH (Invoco), a German-based customer care services provider.
•Smart Data Consulting, a New York-based provider of hosted and on-site e-discovery services.
•ISG Holdings, Inc. (ISG), a provider of bill review software and services and managed care programs for the
workers compensation industry which are offered through two subsidiaries; California-based StrataCare and
Florida-based Bunch CareSolutions.
•Consilience Software, Inc. (Consilience), an Austin-based company providing case management and workflow
automation software to the public sector.
•The learning services unit of Seattle-based Intrepid Learning Solutions (closed January 2015).
•Truckload Management Services (TMS) business was divested. This was a non-core business that provided
document capture and submission solutions as well as campaign management, media buying and digital
marketing services to the long haul trucking and transportation industry.
Document Technology and Other Acquisitions and Divestiture:
In the Document Technology segment, consistent with our strategy to expand distribution to under-penetrated
markets, we acquired Las Vegas, NV based Elan Office Systems and Birmingham, Alabama based Stewart of
Alabama.
Within the Other segment, we completed the closure of Xerox Audio Visual Solutions, Inc. (XAV), a non-core audio
visual business within our Global Imaging Systems subsidiary (GIS). XAV provided audio visual equipment and
services to enterprise and government customers.
3