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Manufacturing and Supply
Our manufacturing and distribution facilities are located around the world. The Company's largest manufacturing
site is in Webster, N.Y., where we produce the Xerox® iGen and Nuvera systems, components, EA Toner,
consumables, fusers, photoreceptors, and other products. Our other primary manufacturing operations are located
in: Dundalk, Ireland, for our High-End production products and consumables; Wilsonville, OR, for solid ink
consumable supplies and components for our mid-range and entry products; and Aubagne, France, for Impika
aqueous-ink production ink-jet systems. We also have a facility in Venray, Netherlands, that provides supplies
manufacturing and supply chain management for the Eastern Hemisphere.
Our master supply agreement with Flextronics, a global electronics manufacturing services company, to outsource
portions of manufacturing for our mid-range and entry businesses, continues through December 2015 (exclusive of
extension rights). We also acquire products from various third parties in order to increase the breadth of our product
portfolio and meet channel requirements.
We have arrangements with Fuji Xerox under which we purchase and sell products, some of which are the result of
mutual research and development agreements. Refer to Note 9 - Investments in Affiliates, at Equity in the
Consolidated Financial Statements, which is incorporated here by reference, for additional information regarding our
relationship with Fuji Xerox.
Services Global Production Model
Our global services production model is one of our key competitive advantages. We have approximately 130
Strategic Delivery Centers located around the world, including India, Philippines, Jamaica, Mexico, Guatemala,
Colombia, Brazil, Chile, Argentina, Ireland, Spain, Poland and Romania. These locations are comprised of
Customer Care Centers, Mega IT Data Centers, Finance and Accounting Centers, Resource Centers and
Document Process Centers. Our global production model is enabled by the use of proprietary technology, which
allows us to securely distribute client transactions within data privacy limits across a global workforce. This global
production model allows us to make the most of lower-cost production locations, consistent methodology and
processes, and time zone advantages. Approximately 15 of these centers are associated with the ITO business
and are expected to be transferred to Atos upon closure of the sale of the ITO business.
Fuji Xerox
Fuji Xerox is an unconsolidated entity in which we own a 25 percent interest, and FUJIFILM Holdings Corporation
(FujiFilm) owns a 75 percent interest. Fuji Xerox develops, manufactures and distributes document processing
products in Japan, China, Hong Kong, other areas of the Pacific Rim, Australia and New Zealand. We retain
significant rights as a minority shareholder. Our technology licensing agreements with Fuji Xerox ensure that the
two companies retain uninterrupted access to each other's portfolio of patents, technology and products.
International Operations
The financial measures by geographical area for 2014, 2013 and 2012 that are included in Note 2 - Segment
Reporting in the Consolidated Financial Statements, are incorporated here by reference. See also the risk factor
entitled “Our business, results of operations and financial condition may be negatively impacted by economic
conditions abroad, including local economies, political environments, fluctuating foreign currencies and shifting
regulatory schemes” in Part I, Item 1A included herein.
Backlog
Backlog, or the value of unfilled orders, is not a meaningful indicator of future business prospects because of the
significant proportion of our revenue that follows contract signing and/or equipment installation, the large volume of
products we deliver from shelf inventories and the shortening of product life cycles.
Seasonality
Our revenues are affected by such factors as the introduction of new products, the length of sales cycles and the
seasonality of technology purchases and services unit volumes. These factors have historically resulted in lower
revenues, operating profits and operating cash flows in the first quarter and the third quarter.
Xerox 2014 Annual Report 12