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XEROX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except per-share data and where otherwise noted)
Note 1 – Summary of Significant Accounting Policies
References herein to “we,” “us,” “our,” the “Company” and “Xerox” refer to Xerox Corporation and its consolidated
subsidiaries unless the context suggests otherwise.
Description of Business and Basis of Presentation
Xerox is a $19.5 billion global enterprise for business process and document management solutions. We are one of
the largest diversified business process outsourcing company worldwide, with an expertise in managing transaction-
intensive processes. This includes services that support enterprises through multi-industry offerings such as
customer care, transaction processing, finance and accounting, and human resources, as well as industry focused
offerings in areas such as healthcare, transportation, financial services, retail and telecommunications. We also
provide extensive leading-edge document technology, services, software and genuine Xerox supplies for graphic
communication and office printing environments of any size.
Basis of Consolidation
The Consolidated Financial Statements include the accounts of Xerox Corporation and all of our controlled
subsidiary companies. All significant intercompany accounts and transactions have been eliminated. Investments in
business entities in which we do not have control, but we have the ability to exercise significant influence over
operating and financial policies (generally 20% to 50% ownership) are accounted for using the equity method of
accounting. Operating results of acquired businesses are included in the Consolidated Statements of Income from
the date of acquisition.
We consolidate variable interest entities if we are deemed to be the primary beneficiary of the entity. Operating
results for variable interest entities in which we are determined to be the primary beneficiary are included in the
Consolidated Statements of Income from the date such determination is made.
For convenience and ease of reference, we refer to the financial statement caption “Income before Income Taxes
and Equity Income” as “pre-tax income” throughout the Notes to the Consolidated Financial Statements.
In December 2014, we announced an agreement to sell our Information Technology Outsourcing (ITO) business to
Atos SE (Atos); the sale is expected to close in the first half of 2015. As a result of the pending sale and having met
applicable accounting requirements, we reported the ITO business as held for sale and a discontinued operation at
December 31, 2014. In 2014 we also completed the disposal of two smaller businesses - Xerox Audio Visual
Solutions, Inc. (XAV) and Truckload Management Services (TMS) - that were also reported as discontinued
operations. All prior periods have been reclassified to conform to this presentation. In 2013 we completed the sale of
our U.S. and Canadian (North American or N.A.) and Western European (European) Paper businesses. Results from
these paper-related businesses are reported as Discontinued Operations and all prior period results have been
reclassified to conform to this presentation. Refer to Note 4 - Divestitures for additional information regarding
discontinued operations.
Use of Estimates
The preparation of our Consolidated Financial Statements requires that we make estimates and assumptions that
affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and expenses during the reporting
period. Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates
require the exercise of judgment. The accounting estimates used in the preparation of our Consolidated Financial
Statements will change as new events occur, as more experience is acquired, as additional information is obtained
and as our operating environment changes. Our estimates are based on management's best knowledge of current
events, historical experience, actions that the company may undertake in the future and on various other
assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different
from these estimates.
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