Xerox 2014 Annual Report Download - page 69

However, our determination above is based on the assumption that only the cash held outside the U.S. would be
repatriated as a result of an unanticipated or unique domestic need. It does not assume repatriation of the entire
amount of indefinitely reinvested earnings of our foreign subsidiaries. As disclosed in Note 17- Income and Other
Taxes in our Consolidated Financial Statements, we have not estimated the potential tax consequences associated
with the repatriation of the entire amount of our foreign earnings indefinitely reinvested outside the U.S. We do not
believe it is practical to calculate the potential tax impact, as there is a significant amount of uncertainty with respect
to determining the amount of foreign tax credits as well as any additional local withholding tax and other indirect tax
consequences that may arise from the distribution of these earnings. In addition, because such earnings have been
indefinitely reinvested in our foreign operations, repatriation would require liquidation of those investments or a
recapitalization of our foreign subsidiaries, the impacts and effects of which are not readily determinable.
Loan Covenants and Compliance
At December 31, 2014, we were in full compliance with the covenants and other provisions of our Credit Facility and
Senior Notes. We have the right to terminate the Credit Facility without penalty. Failure to comply with material
provisions or covenants of the Credit Facility and Senior Notes could have a material adverse effect on our liquidity
and operations and our ability to continue to fund our customers' purchase of Xerox equipment.
Refer to Note 13 - Debt in the Consolidated Financial Statements for additional information regarding debt
arrangements.
Contractual Cash Obligations and Other Commercial Commitments and Contingencies
At December 31, 2014, we had the following contractual cash obligations and other commercial commitments and
contingencies:
(in millions) 2015 2016 2017 2018 2019 Thereafter
Total debt, including capital lease obligations(1) $1,458 $998 $1,037 $1,023 $1,158 $2,123
Interest on debt(1) 330 270 214 168 132 592
Minimum operating lease commitments(2) 586 390 188 112 85 57
Defined benefit pension plans 340 —————
Retiree health payments 71 70 70 69 68 323
Estimated Purchase Commitments:
Fuji Xerox(3) 1,831 —————
Flextronics(4) 452—————
Other(5) 182 236 106 69 65 25
Total $5,250 $1,964 $1,615 $1,441 $1,508 $ 3,120
_______________
(1) Total debt for 2015 includes $1 million of Notes Payable and $150 million of commercial paper as well as payments on capital lease
obligations related to our ITO business. Refer to Note 13 - Debt in the Consolidated Financial Statements for additional information regarding
debt and interest on debt.
(2) Refer to Note 8 - Land, Buildings, Equipment and Software, Net in the Consolidated Financial Statements for additional information related to
minimum operating lease commitments, including payments on operating lease related to our ITO business.
(3) Fuji Xerox: The amount included in the table reflects our estimate of purchases over the next year and is not a contractual commitment.
(4) Flextronics: We outsource certain manufacturing activities to Flextronics. The amount included in the table reflects our estimate of purchases
over the next year and is not a contractual commitment. In the past two years, actual purchases from Flextronics averaged approximately
$525 million per year.
(5) Other purchase commitments: We enter into other purchase commitments with vendors in the ordinary course of business. Our policy with
respect to all purchase commitments is to record losses, if any, when they are probable and reasonably estimable. We currently do not have,
nor do we anticipate, material loss contracts. Other purchase commitments include $2 million and $6 million for 2015 and 2016, respectively,
related to our ITO business, which is held for sale and being reported as a discontinued operation at December 31, 2014. Refer to Note 4 -
Divestitures in the Consolidated Financial Statements for additional information regarding this pending sale.
Pension and Other Post-retirement Benefit Plans
We sponsor defined benefit pension plans and retiree health plans that require periodic cash contributions. Our 2014
cash contributions for these plans were $284 million for our defined benefit pension plans and $70 million for our
retiree health plans. In 2015, based on current actuarial calculations, we expect to make contributions of
approximately $340 million to our worldwide defined benefit pension plans and approximately $71 million to our
retiree health benefit plans.
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