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• Annuity revenue decreased by 12%, with a 4-percentage point negative impact from currency. The annuity
revenue decrease reflects lower equipment sales in prior periods, resulting in ongoing page declines and lower
supplies demand, as well as supplies channel inventory dynamics and reduced financing revenue. Annuity
revenue in Document Technology also reflects continued migration of customers to our partner print services
offering (included in our Services segment).
Total revenue in the Document Technology segment is expected to continue to decline over the next three years as
we continue to migrate the business to more services-based offerings. These services-based offerings are
reported within our Services segment. This segment also continues to be impacted by lower equipment
placements and price declines as well as related supplies and page declines. We expect to continue to mitigate
these declines through focus on productivity and cost improvements, as well as investments in growth areas of the
market.
Document Technology revenue mix was 19% entry, 57% mid-range and 24% high-end.
Segment Margin 2015
Document Technology segment margin of 11.9% decreased 1.8-percentage points from prior year, including a 0.7-
percentage point decrease in gross margin as well as higher RD&E and SAG as a percent of revenue. The gross
margin decrease reflects unfavorable revenue-stream mix, price declines and an increase in pension expense,
partially offset by the retiree health curtailment gain, lower compensation and benefit expenses and benefits from
restructuring and productivity actions. SAG increased as a percent of revenue due to the impact of overall lower
revenues and higher pension expense that more than offset benefits from restructuring and productivity
improvements, lower compensation and benefit expenses and the curtailment gain.
Installs 2015
Entry
Install activity percentages include installations for Document Outsourcing and the Xerox-branded product
shipments to GIS. Descriptions of “Entry”, “Mid-Range” and “High-End” are defined in Note 2 - Segment Reporting,
in the Consolidated Financial Statements.
• 28% decrease in color printers reflecting lower OEM sales due in part to a transition to color multifunction
devices.
• 28% increase in color multifunction devices driven by higher demand for new products and OEM sales.
• 11% decrease in black-and-white multifunction devices reflecting continued declines in developing markets
including Eurasia.
Mid-Range
• 1% increase in mid-range color including demand for new products.
• 7% decrease in mid-range black-and-white reflecting higher declines in developing markets including Eurasia.
High-End
• 2% increase in high-end color systems driven primarily by the new Color Press 800, 1000 and Versant
products offset by declines in other production color products partially reflecting product launch timing.
Excluding Fuji Xerox digital front-end sales, high-end color installs decreased 4%.
• 10% decrease in high-end black-and-white systems consistent with overall market declines.
Revenue 2014
Document Technology revenue of $8,358 million decreased 6%, with no impact from currency. Document
Technology revenues exclude Document Outsourcing. Inclusive of Document Outsourcing, 2014 aggregate
document-related revenue decreased 4% from 2013, with no impact from currency. Total revenues include the
following:
Total revenues include the following:
• Equipment sales revenue decreased 9% with no impact from currency. The decrease in equipment sales
reflects weakness in entry products due to product launch timing, the continued migration of customers to our
growing partner print services offering (included in our Services segment), weakness in developing markets
Xerox 2015 Annual Report 48