2024 Annual Report
Table of Contents
Letter to the Shareholders
Board of Directors
Officers
2024 Form 10-K Insert
FYI
2024 was a pivotal year for Xerox, marked by transformative
progress in the execution of our Reinvention strategy. We
streamlined the complexities of our company while preserving
our focus on developing innovative workplace technologies,
emerging as a more agile and resilient organization that is better
positioned to sustainably grow revenue and profits. During the
year, we implemented widespread structural changes, invested
in businesses with higher underlying rates of growth and
enabled continuous, technology-driven efficiencies.
While the financial benefits of these organizational changes
did not materialize as quickly as expected, we ended the
year with improved execution, meeting our revised full-year
revenue and free cash flow guidance. Notably, Q3 and Q4
demonstrated year-over-year improvements in operating
income and margins, underscoring the benefits of a more
efficient business model.
Importantly, the strategic focus and financial flexibility
afforded by recent organizational changes, as well as the
expansion of our forward flow program, put us in a position to
acquire ITsavvy and announce our intent to acquire Lexmark.
These transformative transactions are expected to accelerate
the achievement of our medium-term financial goals of
revenue stabilization and improved operating income margin.
Despite operational challenges faced during the year, we
delivered on our strategic priorities: strengthening our core
business, structural cost improvements, and balanced capital
allocation.
S T R E N G T H E N I N G CO R E B U S I N E S S
The restructuring of our business, particularly our sales
organization, brought closer alignment between our company
and the economic buyers of our products and services.
We streamlined sales, marketing, and delivery processes
to drive client success through our portfolio of workplace
solutions. While sales productivity did not increase enough
in 2024 to offset reductions in headcount associated with
our reorganization, ongoing initiatives led to improvements
throughout the year. Continued gains in productivity are
expected to drive improved equipment sales in 2025.
The acquisition of ITsavvy enhances our IT Solutions business
and provides a comprehensive suite of IT infrastructure
offerings to better target clients’ broader IT budgets, a market
ten times the size of print.
S T R U C T U R A L CO S T IM P R OV E M E N T S
In 2024, we optimized global routes-to-market and leveraged
our partners to improve reach and regional profitability.
We also simplified our Production print offering to bring
greater focus on providing Production print clients innovative
technology solutions that incorporate automation, intelligent
assistance and personalization. These geographic and offering
simplification actions resulted in a decline in revenue in 2024
but position us to drive long-term reductions in structural
overhead costs. We achieved our targeted $200 million
of gross cost savings during 2024, helping drive a decline
of close to 12 percent in operating expenses.
B A L A N C E D C A PI TA L A L L O C AT IO N
In 2024, we generated cash from operations of $511 million
which was utilized to pay $141 million in dividends, repay
debt obligations and acquire ITsavvy. Further, through debt
refinancing transactions, we extended the maturity of our
unsecured debt through 2030. Our primary capital allocation
priority will be the repayment of debt. The anticipated
acquisition of Lexmark in the second half of 2025 is expected
to immediately reduce pro forma debt leverage and enhance
our capacity to further reduce debt levels. We will continue to
return cash to common shareholders through an anticipated
annual dividend of $0.50 per share.
Shareholders,
L O O K I N G A H E A D
2025 marks the third year of our Reinvention and one in
which we will execute more than 100 initiatives across our key
Reinvention pillars. The most significant market opportunity
for Xerox lies in the accelerated transformation of workplaces.
As businesses adapt to hybrid work environments, the demand
for integrated solutions to enhance productivity, collaboration
and security will rise. Our focus this year will be on strengthening
our portfolio of IT, Digital and Print services to meet the
evolving needs of our partners and clients.
As 2024 demonstrated, our Reinvention path has not been
linear. Success lies in overcoming adversity to accomplish
the objectives set out at the onset of this multi-year strategy.
This year, we realize the benefits of and build on the structural
changes implemented in the past two years to achieve our
priorities for 2025: executing Reinvention, realizing acquisition
benefits, and strengthening our balance sheet.
2025 will be another transformative year and we remain
grateful for everyone who has supported Xerox throughout
this Reinvention.
Regards,
Scott Letier
Chairman of the Board
Steven J. Bandrowczak
Chief Executive Officer
B OA R D O F DI R E C T O R S
O F F IC E R S
Steven J. Bandrowczak
Chief Executive Officer
John G. Bruno
President and Chief
Operating Officer
Flor Colón
Executive Vice President
and Chief Legal Officer and
Corporate Secretary
Mirlanda Gecaj
Executive Vice President
and Chief Financial Officer
Jacques-Edouard Gueden
Executive Vice President
and Chief Channel and
Partner Officer
Louie Pastor
Executive Vice President
and Chief Administrative
Officer and Global Head
of Operations
William Twomey
Vice President and Chief
Accounting Officer
Leanne Cropper
Vice President, Global Tax
Stuart Kirk
Vice President and Treasurer
Eric Risi
Assistant Secretary
Scott Letier
Chairman of Xerox Holdings
and Chief Investment
Officer of Deason Capital
Services LLC, the family
office for Darwin Deason
John G. Bruno
President and Chief
Operating Officer, Xerox
Holdings Corporation
John J. Roese
President and Chief
Technology Officer
and Chief AI Officer,
Dell Technologies
Tami A. Erwin
Former Executive Vice
President and Group CEO,
Verizon Business Group
Amy Schwetz
Senior Vice President and
Chief Financial Officer,
Flowserve
Nichelle Maynard-Elliott
Former Executive Director,
Mergers and Acquisitions,
Praxair, Inc.
Priscilla Hung
Former President and
Chief Operating Officer,
Guidewire Software
Steven J. Bandrowczak
Chief Executive Officer,
Xerox Holdings Corporation
Edward G. McLaughlin
President and Chief
Technology Officer,
Mastercard
Intentionally
left blank
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________
FORM 10-K
_________________________________________________
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended: December 31, 2024
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from: ______ to: _______
_________________________________________________
XEROX HOLDINGS CORPORATION
XEROX CORPORATION
(Exact Name of Registrant as specified in its charter)
_________________________________________________
New York
001-39013
83-3933743
New York
001-04471
16-0468020
(State or other jurisdiction of
incorporation or organization)
(Commission File Number)
(IRS Employer Identification No.)
P.O. Box 4505, 201 Merritt 7
Norwalk, Connecticut 06851-1056
(Address of principal executive offices and Zip Code)
203-849-5216
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Xerox Holdings Corporation
Common Stock, $1 par value
XRX
Nasdaq Global Select Market
(Title of each class)
(Trading Symbol)
(Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
None
____________________________
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.
Xerox Holdings Corporation Yes ☒
No ☐
Xerox Corporation
Yes ☒
No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of
the Act.
Xerox Holdings Corporation Yes ☐
No
☒
Xerox Corporation
Yes ☐No
☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.
Xerox Holdings Corporation Yes ☒
No ☐
Xerox Corporation
Yes ☒
No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required
to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files).
Xerox Holdings Corporation Yes ☒
No ☐
Xerox Corporation
Yes ☒
No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-
accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large
accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of
the Exchange Act.
Xerox Holdings Corporation
Xerox Corporation
Large accelerated filer
☒
Large accelerated filer
☐
Accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☐
Non-accelerated filer
☒
Smaller reporting company
☐
Smaller reporting company
☐
Emerging growth company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section
13(a) of the Exchange Act.
Xerox Holdings Corporation
☐
Xerox Corporation
☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s
assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-
Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Xerox Holdings Corporation
☒
Xerox Corporation
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial
statements of the registrant included in the filing reflect the correction of an error to previously issued financial
statements.
Xerox Holdings Corporation
☐
Xerox Corporation
☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery
analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant
recovery period pursuant to § 240.10D-1(b).
Xerox Holdings Corporation
☐
Xerox Corporation
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Xerox Holdings Corporation
Yes ☐No
☒
Xerox Corporation
Yes ☐No
☒
The aggregate market value of the voting stock of the registrant held by non-affiliates as of June 30, 2024 was
$1,444,585,792.
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest
practicable date:
Class
Outstanding at January 31, 2025
Xerox Holdings Corporation
Common Stock, $1 par value
125,281,396
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following document are incorporated herein by reference:
Document
Part of Form 10-K in Which Incorporated
Xerox Holdings Corporation Notice of 2025 Annual Meeting of
Shareholders and Proxy Statement (to be filed no later than 120 days after
the close of the fiscal year covered by this report on Form 10-K)
III
Cautionary Statement Regarding Forward-Looking Statements
This combined Annual Report on Form 10-K (Form 10-K), and other written or oral statements made from time to
time by management contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act
of 1995 that involve certain risks and uncertainties. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”,
“will”, “would”, “could”, “can” “should”, “targeting”, “projecting”, “driving”, “future”, “plan”, “predict”, “may” and similar
expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of
future performance and the Company’s actual results may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause such differences include, but are not limited to, those
discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors.” The Company assumes no
obligation to revise or update any forward-looking statements for any reason, except as required by law.
Additional risks that may affect Xerox’s operations that are set forth in the “Legal Proceedings” section, the
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other
sections of this Form 10-K, as well as in Xerox Holdings Corporation’s and Xerox Corporation’s combined Quarterly
Reports on Form 10-Q and Xerox Holdings Corporation’s and Xerox Corporation’s Current Reports on Form 8-K
filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of
this document or as of the date to which they refer, and we assume no obligation to update any forward-looking
statements as a result of new information or future events or developments, except as required by law.
Throughout this Form 10-K, references to “Xerox Holdings” refer to Xerox Holdings Corporation and its consolidated
subsidiaries while references to “Xerox” refer to Xerox Corporation and its consolidated subsidiaries. References
herein to “we,” “us,” “our,” or the “Company” refer collectively to both Xerox Holdings and Xerox unless the context
suggests otherwise. References to “Xerox Holdings Corporation” refer to the stand-alone parent company and do
not include its subsidiaries. References to “Xerox Corporation” refer to the stand-alone company and do not include
subsidiaries.
Xerox Holdings Corporation's primary direct operating subsidiary is Xerox and therefore Xerox reflects nearly all of
Xerox Holdings' operations.
Xerox Holdings Corporation
Xerox Corporation
Form 10-K
December 31, 2024
Table of Contents
Page
Part I
Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Item 1A.
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Item 1B.
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
Item 1C.
Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
Item 2.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Item 4.
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Part II
Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
Item 6.
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . .
70
Item 8.
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
158
Item 9A.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
158
Item 9B.
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
160
Item 9C
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . .
160
Part III
Item 10.
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . .
161
Item 11.
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
162
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
162
Item 13.
Certain Relationships, Related Transactions and Director Independence . . . . . . . . . . .
162
Item 14.
Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
162
Part IV
Item 15.
Exhibit and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
163
Schedule II . Xerox Holdings Corporation Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . .
164
Schedule II . Xerox Corporation Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
165
Index of Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
166
Item 16.
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
175
Signatures
Xerox Holdings Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
176
Signatures
Xerox Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
177
Part I
Item 1. Business
Xerox is a workplace technology company, building and integrating services-led, software-enabled, workplace
solutions for enterprises large and small. As customers seek to manage information and document workflows across
digital and physical platforms, we deliver a seamless, secure, and sustainable experience. Whether inventing the
copier, the Ethernet, the laser printer or more, Xerox has long defined the modern work experience and continues to
do so with investments in IT infrastructure, artificial intelligence (AI), augmented reality (AR)-driven service
experiences, robotic process automation (RPA) and other technologies that enable Xerox to deliver essential
products and services to address the productivity challenges of a hybrid workplace and distributed workforce.
Xerox serves customers globally in North America, Europe, Latin America, Brazil, Eurasia, the Middle East, Africa,
and India. This geographic span allows us to deliver our technology and solutions to customers of all sizes,
regardless of complexity or number of customer locations.
Recent Changes and Developments
Reinvention
2024 was the second year of our Reinvention, which is a multi-year strategy designed to transform the way Xerox
operates. Its objectives are to strengthen our core business and improve financial flexibility to enable investments in
solutions, initiatives, and capabilities that will position Xerox to deliver long-term, sustainable growth in revenue and
profits. In January 2024, we implemented a significant reorganization of our business, including the adoption of a
business unit-led operating model, the re-alignment of our sales organization and the establishment of a Global
Business Services (GBS) organization to centralize key business processes and enable enterprise-wide efficiencies
and productivity gains. These changes brought closer alignment between our sales, marketing and offering teams
and the economic buyers of our products and services, improved operating efficiency and positioned the Company to
acquire and integrate ITsavvy and Lexmark, two transactions we expect will accelerate our Reinvention by
diversifying our mix of revenue and further strengthening our core businesses.
The focus of our Reinvention efforts in 2024 was threefold: Geographic Simplification, Operational Simplification, and
Commercial Optimization & Growth. We made significant progress across each priority.
•
Geographic Simplification:
–
Replaced direct-to-end-customer with partner-led distribution models in Latin America and parts of Europe
•
Operational Simplification
–
Implemented business-unit led operating model
–
Established GBS
–
Achieved gross savings target of more than $200 million in 2024
–
Restructured commercial arrangements with technology and Business Process Outsourcing Partners to
create flexibility and mutually aligned incentives to reduce operating costs
•
Commercial Optimization and Growth:
–
Stopped manufacturing certain High-End production equipment to focus on Production submarkets with
higher growth and return profiles
–
Deployed A.I.-enabled pricing tools and revamped sales territory coverage
–
Closed the acquisition of ITsavvy, immediately enhancing Xerox’s IT Solutions offering and expanding Total
Addressable Market (TAM) of Xerox's offerings
–
Announced pending acquisition of Lexmark, providing greater exposure to growing Print markets
In 2025, the focus of Reinvention will progress to specific initiatives designed to i) further optimize our commercial
operations, ii) leverage the capabilities of our acquired business to accelerate Reinvention, and iii) simplify the
business. We will continue to leverage the GBS organization to design and implement continuous operating
efficiencies.
Xerox 2024 Annual Report 1
Other Strategic Changes
This past year we expanded our forward flow program to Canada by signing an agreement to sell future finance
receivable originations in the Canadian market to De Lage Landen Financial Services Canada Inc. (DLL). We
transitioned our direct to end-customer operations in Latin America and parts of Europe to partner-led models and
continued to reduce our presence in certain markets with low levels of profitability, such as paper, the manufacturing
off certain High-End production equipment, and non-strategic IT hardware sales.
We maintain a broad M&A pipeline that includes targets within the print industry and adjacent markets. In 2024, we
closed the acquisition of ITsavvy for total purchase consideration of $405 million. We also announced the pending
acquisition of Lexmark, for total deal consideration of $1.5 billion. Further information about our acquisitions and
divestitures can be found in Note 6 - Acquisitions and Divestitures in the Consolidated Financial Statements.
Strategic Priorities
Our long-term strategic objective is to grow the share of our client's technology spending through increased
penetration of Xerox's solutions among our existing client base, the development of new, content-driven solutions,
and expanded distribution with third-party channel partners. We believe Xerox’s globally recognizable brand, our
deep understanding of clients’ industries and businesses, and clients' trust have afforded us a path to win in IT and
Digital Services – markets where we already have leading solutions and where we are actively investing to develop
more.
Our strategic priorities for 2025 are: Execute Reinvention, Realize the Benefits of Recent Acquisitions, and
Balance Sheet Strength.
Execute Reinvention: The focus of Reinvention this year turns to the implementation of initiatives designed to
enhance revenue and improve profitability. We expect to complete our geographic simplification program, with an eye
towards improving the profitability of operations in countries where distribution models were transitioned from direct
to indirect models. We continue to leverage the GBS organization for the design and implementation of continuous
operating efficiencies. In 2025, GBS plans to build on foundational actions taken in 2024, including the restructuring
of commercial arrangements with some of our largest technology and Business Process Outsourcing partners to
drive structural cost improvements and higher service quality through continued technology-enabled productivity
enhancements, outsourcing optimization, and process standardization. Other initiatives will focus on strengthening
our core business through continued route-to-market and offering optimization, expanded Partner relationships and
greater penetration of IT Solutions & Digital Services across Xerox’s Print client base.
Realize the Benefits of Recent Acquisitions: 2025 is an important year for realizing the benefits of the ITsavvy
acquisition and the planned acquisition of Lexmark. As we integrate ITsavvy, we will aim to leverage an enhanced IT
Solutions platform to increase our share of clients’ technology spend and the realization of cost synergies by
optimizing our combined IT Solutions business. We continue to work diligently to close the Lexmark acquisition, after
which point we will execute a comprehensive integration plan to begin realizing more than $200 million of expected
synergies within two years.
Balance Sheet Strength: In conjunction with the announced acquisition of Lexmark, the reduction of debt is our
primary capital allocation priority. We plan to continue to return cash to shareholders through dividends. In
conjunction with this financing, the Xerox Board of Directors approved a change in the dividend policy to reduce the
Xerox annual dividend from $1 per share to 50 cents per share starting with the dividend expected to be declared in
the first quarter of 2025.
Reportable Segments and Geographic Sales Channels
Our business is organized to ensure we focus on efficiently managing operations while serving our customers and
the markets in which we operate. During 2024, we had two operating and reportable segments – Print and Other
and Xerox Financial Services (XFS).
•
Print and Other – the design, development and sale of document systems, solutions, and services, as well
as associated technology offerings, including IT and software products and services.
•
XFS – a financing solutions business for direct channel customer purchases of Xerox equipment and
solutions, and lease financing to end-user customers who purchase Xerox equipment and solutions.
We also employ a matrix organization that includes a product and geographic focus based on alignment with the
economic buyers of our products and services.
Please refer to the Reportable Segments section of Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations and Note 4 - Segment and Geographic Area Reporting in the Consolidated
Financial Statements for additional information.
Xerox 2024 Annual Report 2
Revenues
We have a broad and diverse base of customers by both geography and industry, ranging from small and mid-sized
clients to printing production companies, governmental entities, educational institutions and Fortune 1000
corporations. Our business does not depend upon a single customer, or a few customers. Our business spans four
primary offering areas: Workplace Solutions, Production Solutions, Xerox Services, and XFS.
Workplace Solutions is made up of two strategic product groups, Entry and Mid-Range, much of which share
common solutions, apps and ConnectKey® software. Workplace Solutions revenues include the sale of products
(captured primarily as equipment sales) as well as software, supplies and the associated technical service and
financing of those products through XFS (captured as post sale revenue).
•
Entry is comprised of A4 desktop monochrome and color printers and multifunction printers (MFPs) ranging from
small/home office devices to office workgroup devices. We offer our ConnectKey® system of digital workflow and
applications across a large portion of these devices.
•
Mid-Range are A3 devices that have more features and can handle higher print volumes and larger paper sizes
than entry devices. We are a leader in this area of the market and offer a wide range of MFPs, digital printing
presses and light production devices, as well as solutions that deliver flexibility and advanced features.
Production Solutions (High-End) are designed for customers in the graphic communications, in-plant and
production print environments with high-volume printing requirements. Our broad portfolio of presses and solutions
provides black-and-white and full-color, as well as on-demand printing of a wide range of applications. Our
xerographic and ink jet presses provide high-speed, high-volume cut-sheet printing, ideal for publishing, and
transactional printing, including variable data for personalized content and one-to-one marketing, to the highest
quality of color and embellishment requirements. Our portfolio spans a variety of print speeds, image quality, feeding,
finishing and media options. Production Solutions revenues include the sale of products (captured primarily in
equipment sales) as well as, software, supplies and the associated technical service and financing of those products
(captured as post sale revenue). FreeFlow® is a portfolio of software offerings that brings intelligent workflow
automation and integration to the processing of High-End print jobs, including automated file preparation with
visibility of press health, utilization, and Overall Equipment Effectiveness (OEE), and solutions that help customers of
all sizes address a wide range of business opportunities including personalization and electronic publishing.
Xerox® Services includes a continuum of solutions and services that help our customers optimize their physical
print and digital information infrastructures, apply automation and simplification to maximize productivity, and ensure
the highest levels of security. Xerox has the capability to support integration and document security on a global scale,
which are critical factors for large enterprises. Our primary offerings in this area are Xerox® Managed Print Services1
(MPS), Xerox IT Solutions, Xerox® Capture & Content Services (CCS) and Xerox® Customer Engagement Services
(CES). CCS and CES encompass a range of Digital Services that leverage our software capabilities in Workflow
Automation, Personalization and Communication Software, Content Management Solutions, and Digitization
Services. The pandemic shifted our customers’ focus toward secure, efficient, and flexible solutions to operate in a
hybrid work environment. As a result, we enhanced our focus on the development and promotion of offerings to help
our customers accelerate their digital transformations.
•
Managed Print Services1 (MPS) utilizes our portfolio of security, analytics, cloud, digitization, and ConnectKey®
technologies to help companies optimize their print infrastructure, secure their print environment, and automate
related business processes. We provide the most comprehensive portfolio of MPS services in the industry and
are recognized as an industry leader by major analyst firms including IDC and Quocirca. Our MPS offering
targets clients ranging from global enterprises to governmental entities and small and mid-sized businesses,
including those served through our channel partners. This portfolio includes a suite of services to help clients
manage hybrid workforces, including cost effective and secure printing devices along with apps and software
tools that enable work from anywhere, cloud server-enabled fleet management, security and automation
software and remote customer support. Xerox® Workflow Central extends the document workflow solutions
available through our ConnectKey® technologies to all devices, including PCs and smartphones, for easier
access to workflow solutions in hybrid workplace environments. Xerox® Digital Hub and Cloud Print services
allow customers to submit print jobs from anywhere and leverage our Web2Print portal with on and off-site
printing networks to meet their printing or marketing collateral needs on demand.
•
IT Solutions, which includes the recently acquired ITsavvy business, provides clients of all sizes integrated IT
infrastructure solutions, delivering business outcomes through its suite of Lifecycle, Deployment and Managed
Services. The IT Solutions business leverages an extensive partner ecosystem to design, develop and deliver
comprehensive Cloud & Hosting, Network & Security, Collaboration and Hybrid Workplace solutions.
Xerox 2024 Annual Report 3
•
Capture & Content Services (CCS) automates the extraction and integration of unstructured data, enhancing
business efficiency. Using AI, RPA, and machine learning, we classify, extract, and process critical data from
physical and digital documents. Our secure, cloud-based platform streamlines operations, reduces costs, and
ensures compliance across key business functions. By transforming document-first workflows into data-driven
processes, we help organizations unlock actionable insights and improve decision-making.
•
Customer Engagement Services (CES) enables the integration of Xerox technology, software, and services to
securely design and manage our clients’ personalization and customization of targeted communications. Our
Customer Communications Management and Campaigns on Demand solutions, such as those provided through
our acquisition of Go Inspire, help drive personalized and meaningful communications and touchpoints.
XFS is a global financing solutions business and currently offers lease financing for direct channel customer
purchases of Xerox equipment and solutions through bundled lease agreements and lease financing to end-user
customers who purchase Xerox equipment and solutions through our indirect channels.
In addition to our four primary offering areas described above, a small portion of our revenues comes from non-core
streams including paper sales in our developing market countries and standalone software such as CareAR,
DocuShare®, and XMPie.
_____________
(1)
Previously known as contractual print services, and includes revenues from service, maintenance and rentals. IT solutions and digital
services are not included in managed print services.
Geographic Information
Overall, approximately 45% of our revenue is generated by customers outside the U.S. Additional details can be
found in Note 4 - Segment and Geographic Area Reporting in the Consolidated Financial Statements.
Patents, Trademarks and Licenses
In 2024, Xerox and its subsidiaries were awarded 244 U.S. utility and design patents. Our patent portfolio evolves as
new patents are awarded to us and older patents expire. As of December 31, 2024, Xerox held 5,676 U.S. utility and
design patents. These patents expire at various dates up to 20 years or more from their original filing dates. While we
believe that our portfolio of patents and applications has value, in general no single patent is essential to our
business.
In 2024, we were party to multiple patent-related agreements in which we licensed or assigned our patents to others
in return for revenue and/or access to their patents or to further our business goals. Most patent licenses expire
concurrently with the expiration of the last patent identified in the license or after a specified term of years. These
agreements vary in subject matter, scope, financials, significance, and duration.
In the U.S., we own 155 trademarks, either registered or applied for. These trademarks have a perpetual life, subject
to periodic renewal requirements. We vigorously enforce and protect our trademarks.
Corporate Social Responsibility (CSR)
At our core is a deep and long-lasting commitment to CSR, a pledge to inspire and support our people, conduct
business ethically across the value chain and preserve our planet. This commitment stems from our corporate values
established over sixty years ago, which include: succeeding through satisfied clients; delivering quality and
excellence in all we do; requiring a premium return on assets; using technology to develop market leadership;
valuing and empowering our employees; and behaving responsibly as a corporate citizen.
We continue this legacy by creating products and services that help our customers be more productive, profitable,
and sustainable. We deliver solutions that drive customer success and enable a new, better world. We do this in our
own operations, as well as in workplaces, communities, and cities around the world. We recognize the world’s
challenges such as climate change and human rights and understand the role we play.
Our pledge to inspire and support our people, conduct business ethically, and protect our planet remains at the core
of everything we do. At Xerox, we believe in continuously improving, and we apply this mentality to ensuring we are
finding ways to improve the sustainability of our operations.
From our earliest days as a company, Xerox has demonstrated a steadfast commitment to corporate social
responsibility. Our greatest goal is to facilitate employee-driven philanthropy, with a focus on strengthening our
communities, sustainability, education, and disaster relief. Together, Xerox and our employees are creating real
impact and sustainable change for the greater good. In 2024, Xerox employees volunteered for approximately
35,200 hours and donated approximately $1 million, which includes the amount matched by Xerox.
Xerox 2024 Annual Report 4
The Xerox 2024 Corporate Social Responsibility Report describes our management approach related to CSR.
Our work aligns with the United Nations Sustainable Development Goals (SDGs), which provide a framework to end
poverty, protect the planet and improve the lives and prospects of everyone, everywhere. To ensure we are
responsive to all stakeholders, Xerox has also been reporting in accordance with the Sustainability Accounting
Standards Board (SASB) and the Global Reporting Initiative (GRI). (The 2024 CSR Report, SASB report, and GRI
report are accessible at www.xerox.com/CSR. The content of our website is not incorporated by reference in this
combined Form 10-K unless expressly noted.)
Environment
With climate change being one of the defining issues of our time, Xerox's net zero goal is 2040 and climate change-
related risks and opportunities are integrated into our Enterprise Risk Management. We share our roadmap to reach
net zero in our 2024 CSR Report. Our roadmap covers our full value chain and focuses on improving processes and
energy efficiency as well as designing environmentally responsible products. Our interim goal is to reduce our Scope
1 and Scope 2 GHG emissions at least 60% by 2030, against the Company’s 2016 baseline. Xerox's Scope 1 and
Scope 2 GHG emissions decreased approximately 15.7% in 2023 (the latest year we reported GHG emissions in our
CSR report), bringing our total reduction to approximately 51% from our 2016 baseline. This is in line with the
ambitious science-based global warming target, validated and approved by the Science Based Targets initiative
(SBTi). Our GHG emissions are third-party assured in accordance with the International Organization for
Standardization (ISO) 14064-3:2019 and are updated in our progress summary as new data becomes available. In
2024, Xerox was named to CDP’s Annual "A List” for climate change transparency and performance. CDP is a
nonprofit organization that runs the global disclosure system for investors, companies, and regions to manage their
environmental impacts.
Circular economy initiatives remain a part of our business strategy. We have implemented several collection and
waste reduction programs, while also designing technology to align with the circular economy’s key elements. Based
on data from 2023 (the latest full year data is available), approximately 90% of spent toner cartridges and other
supplies, returned through the Xerox Supplies Recycling Program for Xerox customers, were recycled, reused or
remanufactured. We continue to make progress towards increasing the post-consumer recycled content in our eco-
label eligible devices.
Human Capital
Our Employees
As of December 31, 2024, we had approximately 16,800 employees, a reduction of approximately 3,300, or 16.4%,
since December 31, 2023. The reduction primarily relates to the Company's Reinvention, which includes the effects
of workforce reduction decisions announced in January 2024, as well as net attrition (attrition net of gross hires).
On a geographic basis, at December 31, 2024, approximately 8,500 employees were located in the U.S. and
approximately 8,300 employees were located outside the U.S. We had approximately 8,900 employees, or
approximately 55% of our total employees, engaged in providing services to customers (direct service and managed
services) and approximately 2,000 employees engaged in direct sales.
Approximately 20% of our employees are represented by unions or similar organizations, such as worker’s councils
with approximately 87% located outside the U.S. As of December 31, 2024, approximately 25% of our employees
were women and approximately 30% of our U.S. employees self-identified as diverse.
Refer to the Recent Changes and Developments section above for additional information regarding Reinvention.
Employee Safety
At Xerox, we are committed to maintaining a safe workplace environment for our people. We have an incident
reporting process, workplace safety inspections and hazard analysis that allows improvements in areas where we
can reduce or prevent incidents. Several methods are also used to raise employee safety awareness including site-
specific hazard management, off-the-job safety information and communications regarding safety concerns. During
2024 the total number of Days Away from Work Injury cases, which relies on employees to self-report, was 73 cases,
as compared to 102 cases in 2023, a decrease in the rate from 0.47 to 0.40.
Engagement and Talent Development
Xerox remains committed to continuously revitalizing our employee experience and supporting employees through
the shift to our new operating model, which is driving our Reinvention and Xerox's transformation. To facilitate these
ongoing changes, we began strengthening our change management capabilities by creating a proactive, consistent
global approach, upskilling our people, and enabling new ways of working. We improved our ability to make data-
driven decisions and streamlined various processes to unlock our people's potential.
Xerox 2024 Annual Report 5
To support the employee experience, we have enhanced manager enablement resources and strengthened our
leadership capability model that help our managers excel. Additionally, we introduced new benefits like paid parental
leave in the U.S, and emphasized well-being with the Xerox Recharge Day.
We standardized the way employee performance is evaluated. By evolving our performance management
processes, we have driven accountability and ensured employees received feedback and coaching to reach their
highest potential. With a specific focus on sales performance, we redesigned and simplified our sales compensation
plans, creating a clearer path to earnings.
Xerox sponsors numerous corporate development initiatives for targeted populations (i.e., high potentials, emerging
technology professionals, and senior leaders, etc.), and corporate processes such as succession planning to ensure
that we have a clear leadership pipeline for critical organizational roles.
Total Rewards
Our success depends on attracting, retaining, and motivating a highly productive, global workforce. To achieve this,
we take pride in offering our employees a comprehensive Total Rewards program that includes various
compensation, benefits, and work-life programs. Our programs are designed to achieve the following objectives:
•
Drive shareholder value: support our business strategy that drives value over time.
•
Align with performance: incentivize the right behaviors and reward talent for delivering results to further our
Reinvention - when the Company wins, our employees win.
•
Support our talent strategy: attract, retain, and motivate a productive and engaged workforce.
As with most global companies, our compensation and benefits vary based on employee eligibility, and local
practices and regulations. We benchmark our programs to ensure we remain competitive with our peers and the
markets we serve, and to maintain alignment with our short-term and long-term business goals.
Our compensation offerings include base pay, as well as short-term and long-term incentive programs. Our short-
term programs include: a management incentive plan (MIP) designed to drive Xerox’s annual pay for performance
culture and incentivize our leaders to help Xerox achieve sustainable growth and profitability; and a sales
compensation program that tightly aligns our sales force with business goals. Our Long-Term Incentive (LTI) equity-
based program reinforces alignment of our leaders and key talent with shareholders. In 2024, approximately 35% of
Xerox's employees were eligible to participate in our LTI program.
Our benefits offerings provide our employees with choice and flexibility to help them reach their health and financial
goals. Our offerings include the following core programs: health, wellness, retirement, paid time off, life and disability
insurance, and access to voluntary benefits.
Employee Training
All employees are required to complete annual training in ethics, privacy, and security. Certain employees are
required to complete additional specialized training pertaining to their role within the organization. Additionally,
numerous training programs are available for employees to take on their own initiative.
We adopt a blended technology-led learning model to drive the Xerox business and talent strategies. The Xerox
workforce has access to learning in various modalities that support professional development and build capabilities
across the Company, on time, and in a cost-effective manner. Our Learning function is focused on business agility
and driving digital transformation across our workforce.
Our employees have access to a global learning platform that includes an extensive portfolio of online courses,
virtual classroom events, simulations, job aids, and other learning and development resources. As our business
evolves, we continue to leverage technology to identify new skills and capabilities required to ensure we remain
competitive in the global market. Our Learning function partners with Xerox business leaders to design capability-
building programs and Xerox's senior leadership champions a long-term vision to continually develop the skills of our
employees. In 2024, our learning management system recorded over 267,000 learning completions equating to over
35,000 days.
We also laid the groundwork for a new era of learning, modernizing our approach as an essential driver of our growth
and innovation. This included revitalizing our framework for learning by creating a Xerox Skills Taxonomy to ensure
we prepare our workforce in the digital and AI age. This framework is further enhanced as we prepare to move to a
new Learning Management System in 2025.
Xerox 2024 Annual Report 6
Material Government Regulations
Our business activities are worldwide and are subject to various federal, state, local, and foreign laws and our
products and services are governed by a number of rules and regulations. Currently, costs incurred to comply with
these governmental regulations are not material to our capital expenditures, results of operations and competitive
position. Although there is no assurance that existing or future government laws and regulations applicable to our
operations, services or products will not have a material adverse effect on our capital expenditures, results of
operations and competitive position, we do not currently anticipate material expenditures for government regulations.
For a discussion of the risks associated with government regulations that may materially impact us, please see Risk
Factors included in Item 1A of this combined Form 10-K.
Marketing and Distribution
We go to market with a client-centric, market-informed, and services-led approach, selling workplace products and
solutions that support the new hybrid workplace and distributed workforce. We service our clients through our direct
sales force or indirectly through distributors, independent agents, dealers, value-added resellers, systems
integrators, and e-commerce marketplaces. In addition, we continue to focus on broadening our footprint to sell
offerings to the small and mid-sized markets primarily in the U.S., the U.K., and Canada through Xerox Business
Solutions (XBS) which is comprised of regional core companies that provide office technology and services. Our IT
Solutions business provides IT infrastructure solutions to clients of all sizes in the U.S., Canada, and Western
Europe.
We are structured to serve our clients globally through our business-unit led operating model and organizational
structure which covers direct and indirect routes to market in the Americas (comprised of the U.S., Canada, and Latin
America) and EMEA (comprised of Europe, the Middle East, Africa and India). We have an industry leading and
common global delivery model that provides a consistent client experience worldwide. We believe that this structure
creates a leaner and more effective go-to-market model that streamlines our supply chain and provides our client
with best-in-class services.
Competition
Although we encounter competition in all areas of our business, we are the leader - or among the leaders - in our
core mid-range and high-end product groups. We compete on the basis of technology, performance, price, quality,
reliability, brand reputation, distribution, service and support.
The larger competitors in our print business include Canon, FUJIFILM Business Innovations Corp., HP Inc., Konica
Minolta, and Ricoh. Our brand recognition, reputation for document management expertise, innovative technology
and service delivery excellence are our competitive advantages. These advantages, combined with our breadth of
product offerings, global distribution channels and client relationships, position us as a strong competitor going
forward. As we continue our strategy to diversify and grow other businesses, we may face additional competition
from non-print market participants.
With respect to our financing business, our main competitors vary considerably from equipment manufacturers with a
captive leasing group to third-party independent leasing entities and financial institutions. We generally compete
based on relationships with customers, dealers and partners and by offering a better integrated service experience.
Our IT Solutions business competes with integrated IT solutions providers and value-added resellers of IT
infrastructure equipment. Competitors range in size, technological specialty and geographic presence. Our
competitive advantages are the breadth of IT solutions provided, the skill sets and quality of our service and support
technicians, our relationships with OEM partners and our ability to leverage Xerox’s existing client base to provide a
comprehensive suite of print and IT solutions to clients.
Customer Financing (XFS)
We finance a large portion of our direct channel customer purchases of Xerox equipment through bundled lease
agreements. We also provide lease financing to end-user customers who purchase Xerox equipment and solutions
through our indirect channels. We compete with other third-party leasing companies and financial institutions with
respect to the lease financing provided to these end-user customers. In both instances, financing facilitates customer
acquisition of Xerox technology and enhances our value proposition, while providing Xerox a reasonable return on
our investment in this business.
Because our lease contracts allow customers to pay for equipment over time rather than upfront upon installation, we
maintain a certain level of debt to support our investment in these lease contracts. We fund our customer financing
activity through a combination of cash generated from operations, cash on hand and proceeds from capital market
offerings as well as secured borrowing arrangements and sales of receivables. At December 31, 2024, we had
Xerox 2024 Annual Report 7
approximately $1.75 billion of finance receivables and $245 million of Equipment on operating leases, net, or Total
Finance assets of approximately $2.0 billion. We maintain an assumed 7:1 leverage ratio of debt to equity as
compared to our Finance assets, which results in approximately $1.7 billion of our $3.4 billion of debt being allocated
to our financing business.
In January 2024, we entered into a new agreement with HPS to transfer the servicing of the majority of funding
activity to HPS as well as extend the existing term to five years. This agreement automatically renews for a one-year
period unless terminated by either the Company or HPS. Xerox will be required to pay a specified fee to service the
Company’s retained receivables. Xerox will continue to service the lease receivables from prior arrangements with
HPS for a specified fee.
In October 2024, the Company entered into a finance receivables funding agreement with De Lage Landen Financial
Services Canada Inc. (DLL), pursuant to which the Company can offer for sale, and DLL may purchase, certain
eligible pools of finance receivables structured as “true sales at law” and bankruptcy remote transfers and we have
received an opinion to that effect from outside counsel. This finance receivables funding agreement has an initial
term of five years, with automatic one-year extensions thereafter, unless terminated by either the Company or DLL.
The Company will be paid a commission on lease receivables sold and will continue to service the lease receivables
under the finance receivables funding agreement. If the portfolio performs above a certain level of incremental
service, a fee can be earned annually.
Refer to "Debt and Customer Financing Activities" and "Finance Assets and Related Debt" in the Capital Resources
and Liquidity section of Management's Discussion and Analysis, included in Item 7 of this combined Form 10-K, for
additional information.
Manufacturing and Supply
Our manufacturing and distribution facilities are located around the world. Our largest manufacturing site is in
Webster, N.Y., where we produce key components and consumables for our products, such as toner. We have
manufacturing operations for materials and components in Dundalk, Ireland; Wilsonville, OR; and Oklahoma City,
OK. We conduct sustainable manufacturing in all of these facilities. In addition, we work with various manufacturing
and distribution partners. This diversification of suppliers brings flexibility and cost efficiency to our manufacturing
and supply chain, a critical component in our strategic initiative to optimize operations for simplicity. FUJIFILM
Business Innovation Corp. (formerly Fuji Xerox Co., Ltd.) and Lexmark are our largest partners with whom we
maintain product sourcing agreements for specific products primarily across our entry, mid-range and high-end
portfolios. We also acquire products from various third parties to increase the breadth of our product portfolio and
meet channel requirements. In addition, we outsource certain specialized manufacturing activities to partners, such
as Flex Ltd. and Jabil Inc., which are global contract manufacturers with whom we have long-standing relationships.
Our supply chain operations utilize a network of world-class logistics partners who offer warehousing and
transportation services. Reverse Logistics is an integral part of our sustainability mission, and in the U.S. we perform
these operations at our facility in Cincinnati, OH, and globally with a network of various partners.
In 2024, we renewed our multi-year contract with Fujifilm Business Innovation Corp. This agreement secures our
ongoing access to the latest advancements in print engine technology and related supplies, reinforcing Xerox’s
commitment to delivering differentiated solutions to our clients and partners.
Refer to the Capital Resources and Liquidity section of Management's Discussion and Analysis, included in Item 7
of this combined Form 10-K for additional information regarding our relationship with FUJIFILM Business Innovation
Corp.
International Operations
The financial measures, by geographical area for 2024, 2023 and 2022, are included in Note 4 - Segment and
Geographic Area Reporting in the Consolidated Financial Statements for additional information. See also the risk
factor entitled “The international nature of our business subjects us to a number of risks, including foreign exchange
and interest rate risk and unfavorable political, regulatory, and tax conditions in foreign countries.” in Part I, Item 1A
Risk Factors of this combined report on Form 10-K.
Seasonality
Our revenues may be affected by such factors as the introduction of new products, the length of sales cycles and the
seasonality of technology purchases and printing volume. These factors have historically resulted in lower revenues,
operating profits, and operating cash flows in the first and third quarters.
Xerox 2024 Annual Report 8
Other Information
Xerox Holdings Corporation
Xerox Holdings is a New York corporation, organized in 2019 and our principal executive offices are located at 201
Merritt 7, P.O. Box 4505, Norwalk, Connecticut 06851-1056. Our telephone number is 203-849-5216.
Xerox Corporation
Xerox is a New York corporation, organized in 1906 and our principal executive offices are located at 201 Merritt 7,
P.O. Box 4505, Norwalk, Connecticut 06851-1056. Our telephone number is 203-849-5216.
Within the Investor Relations section of Xerox Holdings' website, you will find our combined Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to these reports. We
make these documents available timely after we have filed them with, or furnished them to, the U.S. Securities and
Exchange Commission (the SEC). The SEC's Internet address is www.sec.gov.
Our Internet address is www.xerox.com. The content of our website is not incorporated by reference in this
combined Form 10-K unless expressly noted.
© 2025 Xerox Corporation. All rights reserved. Xerox®, ConnectKey®, FreeFlow®, Xerox Nuvera® and Baltoro® are
trademarks of Xerox Corporation in the United States and/or other countries.
Xerox 2024 Annual Report 9
Item 1A. Risk Factors
You should carefully consider the following risk factors as well as the other information included, and risks
described, in other sections of this combined Form 10-K, including under the headings “Cautionary Statement
Regarding Forward-Looking Statements,” “Legal Proceedings,” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and in our Consolidated Financial Statements and the related notes
thereto.
Any of the following risks could materially and adversely affect our business, financial condition, or results of
operations. The selected risks described below, however, are not the only risks facing us. Additional risks and
uncertainties not currently known to us or those we currently view to be immaterial may also materially and
adversely affect our business, financial condition, or results of operations.
Summary of Principal Risk Factors
Our business is subject to change, risks, and uncertainties, as described herein. The risks factors that the Company
considers material include, but are not limited to, the following:
Company-Specific Risk Factors
•
Our business, results of operations, cash flow, and financial condition are affected by global macroeconomic
conditions;
•
Our profitability is dependent on our ability to obtain adequate pricing for our products and services and to
improve our cost structure;
•
We have outsourced a significant portion of our manufacturing operations and increasingly rely on third-party
manufacturers, subcontractors, and suppliers;
•
We may not achieve the expected benefits of our restructuring and transformation plans, including Reinvention;
and
•
Our level of indebtedness could adversely affect our financial condition and reduce our financial flexibility.
Regulatory Risk Factors
•
The international nature of our business subjects us to a number of risks, including unfavorable political,
regulatory, and tax conditions in foreign countries; and
•
Tariffs or other restrictions on foreign imports could negatively impact our financial performance.
General Risk Factors
•
Our business, results of operations and financial condition may be negatively impacted by legal and regulatory
matters; and
•
Our failure to maintain an adequate system of internal control over financial reporting, could adversely affect our
ability to accurately report our results.
Risks Related to our Pending Acquisition of Lexmark
•
The Lexmark acquisition may not be completed and the equity purchase agreement may be terminated in
accordance with its terms;
•
The Lexmark acquisition may present certain risks to our business and operations prior to the closing and, if
consummated, after the closing; and
•
We will incur a substantial amount of indebtedness in connection with the financing of the Lexmark Acquisition.
Company-Specific Risk Factors
Our business, results of operations, cash flow, and financial condition are affected by global
macroeconomic conditions.
Global macroeconomic developments, including conflicts throughout the world, may adversely affect our business
and financial results. Our business and financial performance depend on worldwide economic conditions, which
affect the demand for our products and services in the markets we serve as well as the cost and availability of
inputs to our business. Prolonged or more severe economic weakness and uncertainty, including economic
slowdowns or recessions, global market volatility, rising inflation and interest rates, employment, and other adverse
economic conditions, may result in decreased demand for our products and services, logistical and supply-related
challenges, and increased difficulty with financial forecasting. Moreover, the global macroeconomy has a significant
impact on interest rates, borrowing costs, and availability and cost of capital, all of which could have an adverse
impact on our business. In addition, inflation may adversely affect customers’ financing costs, cash flows, and
profitability, which could adversely impact their operations and our ability to collect receivables. Rising interest rates
could have a dampening effect on overall economic activity and/or the financial condition of our customers, either or
Xerox 2024 Annual Report 10
both of which could negatively affect customer demand for our products and our customers’ ability to repay
obligations to us. These conditions may result in reduced consumer and business confidence and spending in many
countries, a tightening in the credit markets, a reduced level of liquidity in many financial markets, high volatility in
credit, fixed income and equity markets, currency exchange rate fluctuations, and global economic uncertainty. In
addition, longer term disruptions in the capital and credit markets could adversely affect our access to liquidity
needed for our business. If financial institutions that have extended credit commitments to us are adversely affected
by the conditions of the U.S. and international capital markets, they may become unable to fund borrowings under
their credit commitments to us, which could have an adverse impact on our financial condition and our ability to
borrow additional funds, if needed, for working capital, capital expenditures, acquisitions, research and development
and other corporate purposes.
The global supply chain has experienced and may continue to experience pronounced disruptions impacting service
providers, logistics, and the flow, cost, and availability of supplies and products. Our business depends on its timely
supply of equipment, services, and related products to meet the technical and volume requirements of our
customers. Shortages of parts, materials, and services needed to manufacture and service our products, as well as
delays and unpredictability of shipments due to transportation interruptions, have adversely impacted, and may
continue to adversely impact, our suppliers’ ability to meet our requirements, and in turn our ability to meet our
customers’ needs. Moreover, supply chain constraints may continue to increase costs of logistics and parts for our
products, which costs we may not be able to pass on to our customers. We may experience further disruptions to
our manufacturing operations, supply chain, and/or distribution channels in the future, and these disruptions may be
prolonged.
We are subject to foreign currency exchange and interest rate volatility in our business. Our future revenues, costs
and results of operations could be significantly affected by changes in foreign currency exchange rates - particularly
the euro, the British pound, and the Japanese yen. We use currency derivative contracts to hedge foreign currency-
denominated assets, liabilities, and anticipated transactions. This practice is intended to mitigate or reduce volatility
in the results of our foreign operations but does not eliminate such volatility. We do not hedge the translation effect
of international revenues and expenses that are denominated in currencies other than the U.S. dollar. Although the
use of hedging transactions limits our downside risk, their use may also limit future revenues.
If we fail to successfully develop new and existing products, technologies, and service offerings, we may be
unable to retain current customers and gain new customers and our revenues would decline.
We operate in an environment of significant competition, driven by rapid technological developments, changes in
industry standards, and demands of customers to become more efficient. Our primary competitors are exerting
increased competitive pressure in targeted areas and are entering new markets, and emerging competitors may
introduce new technologies, business models, or other innovations. Our competitors include large international
companies, some of which have significant financial resources and compete with us globally to provide document
processing products and services in each of the markets we serve. We compete primarily on the basis of
technology, performance, price, quality, reliability, brand, distribution, and customer service and support. Our future
success is largely dependent upon our ability to compete in the markets we currently serve, to promptly and
effectively react to changing technologies and customer expectations, and to expand into additional market
segments. To remain competitive, we must develop or acquire new services, applications and products and
periodically enhance our existing offerings. If we are unable to compete successfully through existing new sales
channels, including new partnerships, we could lose market share and important customers to our competitors, and
such loss could materially adversely affect our results of operations and financial condition.
The process of developing new high-technology products, software, services, and solutions, and enhancing existing
hardware and software products, services, and solutions is complex, costly, and uncertain, and any failure by us to
accurately anticipate customers' changing needs and emerging technological trends could significantly harm our
market share, results of operations, and financial condition. These changing market trends are also opening new,
adjacent, and ancillary markets for our products, services, and software, which requires us to accurately anticipate
our customers' changing needs and emerging technological trends. Our business model requires us to commit
resources before knowing whether our initiatives will result in products that are commercially successful and
generate the revenues required to provide desired returns.
In addition, our sales strategy requires us to simplify our coverage model and expand into adjacent markets with
new products, services, and technology such as integrated IT infrastructure solutions, Intelligent Document
Processing, multi-channel client communication services and other workplace productivity solutions. Our ability to
develop or acquire new products, services, and technologies for these adjacent markets through new or existing
partners may require the investment of significant resources which may not lead to the successful development of
new technologies, products, or services.
Xerox 2024 Annual Report 11
Our digital services strategy involves developing and deploying essential products and services that address the
productivity challenges of a hybrid workplace and distributed workforce. We also expect to extend our IT and digital
services presence in the mid- market through organic and inorganic investments. Our future success depends on
our ability to make the investments and commit the necessary resources to execute our business strategy in this
highly competitive market. Despite this investment, the process of developing new products, services, and
technologies is inherently complex and uncertain, and there are a number of risks to which we are subject, including
the risk that our products, services, or technologies will not successfully satisfy our customers’ needs, conform to
evolving preferences or technologies, or gain market acceptance, which could adversely affect our results of
operations and financial condition.
Our business and financial performance could suffer if we do not manage the risks associated with our
services businesses properly.
The success of our Managed Print and Digital services business depends to a significant degree on attracting,
retaining, and maintaining or increasing the level of revenues from our customers. Our standard services
agreements are generally renewable at a customer’s option and/or subject to cancellation rights, with or without
penalties for early termination. We may not be able to retain or renew services contracts with our customers, or our
customers may reduce the scope of the services they contract for. Factors that may influence contract termination,
non-renewal, or reduction include reduced print usage, business downturns, dissatisfaction with our services or
products, our retirement or lack of support for our products and services, our customers selecting alternative
technologies, and the cost of our services as compared to our competitors.
We may not be able to replace the revenue and earnings from lost customers or reductions in services. Although
our services agreements may include penalties for early termination, these penalties may not fully cover our
investments in these businesses.
In addition, the pricing and other terms of certain services agreements require us to make estimates and
assumptions at the time we enter into these contracts that could differ from actual results. Any increased or
unexpected costs or unanticipated delays in connection with the performance of these contracts, which may
increase as services become more customized, could make these agreements less profitable or unprofitable. As a
result, we may not generate the revenues, profits or cash flows we may have anticipated from our services business
within the expected timelines, if at all.
Our profitability is dependent upon our ability to obtain adequate pricing for our products and services and
to improve our cost structure.
Our success depends on our ability to obtain adequate pricing for our products and services that will provide a
reasonable return to our shareholders. Changes in market conditions, including tariffs, inflation, interest rates,
foreign currency exchange movements, and global supply chain disruptions, may exert pressure on the margins we
obtain for our products and services. Cost-reduction and pricing actions we undertake may not prove sufficient to
offset the adverse impacts of such market conditions.
Our ability to sustain and improve profit margins is dependent on a number of factors, including geography mix, our
ability to continue to improve the cost efficiency of our operations, our ability to sustain pricing increases across our
portfolio of products and services in a competitive and inflationary environment, our success in diversifying our suite
of products and services, the additional costs imposed by supply chain disruptions, the proportion of high-end, mid
and entry-level equipment sales, and IT Solutions-related equipment sales (i.e., product and services mix), post-
sale revenue trends and our ability to successfully complete information technology initiatives. If any of these factors
adversely materialize or if we are unable to achieve and maintain productivity or efficiency improvements, our ability
to offset labor cost inflation, potential materials cost increases and competitive price pressures would be impaired,
all of which could adversely affect our results of operations and financial condition.
Supply chain disruptions and interest rate increases have increased the cost of materials and components required
to manufacture our products, transportation of components and products, and labor associated with all steps of the
supply chain. We continually review our operations with a view towards reducing our cost structure, including
reducing our employee base, exiting certain businesses and/or geographies, seeking more favorable terms in our
current and future supply contracts, improving process and system efficiencies, and outsourcing some internal
functions.
If we are unable to control the cost of and obtain adequate pricing for our products and services or if our cost-cutting
efforts negatively impact our business, it could materially adversely affect our results of operations and financial
condition.
Xerox 2024 Annual Report 12
We have outsourced a significant portion of our manufacturing operations and increasingly rely on third-
party manufacturers, subcontractors, and suppliers.
We have outsourced a significant portion of our manufacturing operations to third parties, such as FUJIFILM
Business Innovation Corp. (formerly Fuji Xerox Co., Ltd.). In the normal course of business, we regularly reevaluate
our relationships with these third parties and have discussions with other third parties in order to maintain
competitive tension and seek more optimal terms. There is no guarantee that such discussions will lead to better
arrangements, and our existing suppliers could react negatively to any alternative arrangements we seek to
negotiate with other third parties. In addition, we could incur significant costs in order to transition from one third-
party manufacturing partner to another. We have experienced, and may continue to experience, cost increases from
our third-party manufacturing partners and we may not be able to pass on all such cost increases to our customers.
We face the risk that our third-party manufacturing partners may not be able to develop or manufacture products
satisfying all of our requirements, quickly respond to changes in customer demand, and obtain supplies and
materials necessary for the manufacturing process. In addition, in the normal course of business and exacerbated
by supply chain disruptions, our partners may experience labor shortages and/or disruptions, transportation cost
increases, materials cost increases, and/or manufacturing cost increases that could lead to higher prices for our
products and/or lower reliability of our products. Further, since certain third parties to whom we have outsourced
manufacturing are also our competitors in the print market, or may become competitors in the future, we could
experience product disruption as a result of competitive pressures that increase the cost of the products supplied. If
we face product shortages and/or cost increases and are unable to transition to third parties, we could experience
supply interruptions, experience lower profit margins, damage our relationships with our customers, and reduce our
market share, all of which could materially adversely affect our results of operations and financial condition.
In addition, in our services business, we may partner with other parties, including software and hardware vendors,
to provide the complex solutions required by our customers. Therefore, our ability to deliver the solutions and
provide the services required by our customers is dependent on both our and our partners' ability to meet our
customers' requirements and schedules. If we or our partners fail to deliver services or products as required and on
time, our ability to complete the contract may be adversely affected, which may have an adverse impact on our
revenue and profits.
We may be unable to attract and retain key personnel while our business model undergoes significant
changes.
Xerox is undergoing significant changes in our business model and, accordingly, current and prospective employees
may experience uncertainty about their future and may have other opportunities available to them given the
competitive labor market. Our success is dependent, among other things, on our ability to attract, develop and retain
highly qualified senior management and other key employees. Competition for key personnel is intense, and our
ability to attract and retain key personnel is dependent on a number of factors, including prevailing market
conditions and compensation packages offered by companies competing for the same talent. Our ability to do so
also depends on how well we maintain a strong corporate culture and corporate brand that is attractive to
employees. Hiring and training of new employees has been adversely impacted by global economic uncertainty, the
tight labor market caused by low unemployment, and changes to office environments and workplace trends
precipitated by COVID-19. The departure of existing key employees or the failure of potential key employees to
accept employment with Xerox, despite our recruiting efforts, could have a material adverse impact on our business,
financial condition, and operating results.
We may not achieve the expected benefits of our restructuring and transformation plans, including
Reinvention, which may adversely affect our business.
We engage in restructuring actions, as well as other transformation efforts, such as Reinvention, in order to reduce
our cost structure, manage cash flow, achieve operating efficiencies, and align our business to fit with our operating
plan. In addition, these actions are expected to simplify our organizational structure, upgrade our IT infrastructure
and redesign our business processes. As a result of these initiatives, we may experience a loss of continuity, loss of
accumulated knowledge and/or inefficiency during transitional periods. Transformation and restructuring may
require a significant amount of time and focus from both management and other employees, which may divert
attention from operating and growing our business. The wide-ranging nature and number of actions underway at
any point in time may become difficult for the organization to satisfactorily manage and implement, as these actions
may have impacts across the organization, processes and systems that are not apparent by individual project but
may have unintended consequences in the aggregate. Furthermore, the expected savings associated with these
initiatives may be offset to some extent by business disruption during the implementation phase as well as
investments in new processes and systems until such time as the initiatives are fully implemented and stabilized.
Xerox 2024 Annual Report 13
Moreover, we are adopting new pricing strategies, distribution models, and changes in our partner models. The
market may not respond as expected to such actions. Changes in our pricing structure or approach may not align
with customer expectations or industry standards, leading to reduced demand or customer dissatisfaction.
If we fail to achieve some or all of the expected benefits of our restructuring and transformation plans, it could have
a material adverse effect on our competitive position, business, financial condition, results of operations and cash
flows.
Among our Reinvention initiatives is the implementation of a new Enterprise Resource Planning (“ERP”) system.
ERP implementations are complex, labor-intensive and time-consuming projects and involve substantial
expenditures on system software and implementation activities. The ERP system is critical to our ability to provide
important information to our management, obtain and deliver products, provide services and customer support,
send invoices and track payments, fulfill contractual obligations, accurately maintain books and records, provide
accurate, timely and reliable reports on our financial and operating results, and otherwise operate our business.
ERP implementations also require transformation of business and financial processes in order to reap the benefits
of the ERP system. Any such implementation involves risks inherent in the conversion to a new ERP, including loss
of information and potential disruption to our normal operations. The implementation and maintenance of the new
ERP system has required, and will continue to require, the investment of significant financial and human resources,
the re-engineering of processes of our business, and the attention of many employees who would otherwise be
focused on other aspects of our business. Our results of operations could be adversely affected if we experience
time delays or cost overruns during the ERP implementation process, or if we are unable to reap the benefits we
expect from the ERP system. Any material deficiencies in the design and implementation of the new ERP system
could also result in potentially materially higher costs than we had incurred previously and could adversely affect our
ability to operate our business and otherwise negatively impact our financial reporting and internal controls. Any of
these consequences could have a material adverse effect on our results of operations and financial condition.
As part of our efforts to streamline operations and reduce costs, we have offshored and outsourced certain of our
operations, services and other functions through arrangements with third parties (e.g., TCS and HCL) and we will
continue to evaluate additional offshoring or outsourcing possibilities in the future. If our outsourcing partners fail to
perform their obligations in a timely manner or at satisfactory quality levels or if we are unable to attract or retain
sufficient personnel with the necessary skill sets to meet our offshoring or outsourcing needs, the quality of our
services, products, and operations, as well as our reputation, could suffer. In addition, much of our offshoring takes
place in developing countries and as a result may also be subject to geopolitical uncertainty. Diminished service
quality from offshoring and outsourcing could have an adverse material impact to our operating results due to
service interruptions and negative customer reactions.
Our government contracts are subject to termination rights, audits, and investigations, which, if exercised,
could negatively impact our reputation and reduce our ability to compete for new contracts.
A significant portion of our revenue is derived from contracts with U.S. federal, state and local governments and
their agencies, as well as international governments and their agencies. Government entities typically finance
projects through appropriated funds. While these projects are often planned and executed as multi-year projects,
government entities usually reserve the right to change the scope of or terminate these projects for lack of approved
funding and/or at their convenience. Changes in government or political developments, including budget deficits,
shortfalls or uncertainties, government spending reductions (e.g., Congressional sequestration of funds under the
Budget Control Act of 2011), government shutdowns, or other debt or funding constraints, could result in lower
governmental sales and in our projects being reduced in price or scope or terminated altogether, which also could
limit our recovery of incurred costs, reimbursable expenses and profits on work completed prior to the termination.
Additionally, government agencies routinely audit government contracts. If the government finds that we charged
them inappropriate pricing, we could be required to refund or reimburse the government, and there is the possibility
of paying fines and penalties. If the government discovers improper or illegal activities or contractual non-
compliance in the course of audits or investigations, we may be subject to various civil and criminal penalties and
administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and
suspensions or debarment from doing business with the government. Any resulting penalties or sanctions could
have a material adverse effect on our business, financial condition, results of operations and cash flows. Further,
the negative publicity that arises from findings in such audits or investigations could have an adverse effect on our
reputation and reduce our ability to compete for new contracts and could also have a material adverse effect on our
business, financial condition, results of operations and cash flow.
Additionally, our business with the U.S. government, direct or indirect, is subject to specific laws and regulations
with numerous and unique compliance requirements relating to formation, administration and performance of U.S.
Xerox 2024 Annual Report 14
federal or federally funded contracts. These requirements, which may increase or change over time, may increase
our performance and compliance costs thereby reducing our margins, which could have an adverse effect on our
financial condition. Violations or other failures to comply with these laws, regulations or other compliance
requirements could lead to terminations for default, suspension or debarment from U.S. government contracting or
subcontracting for a period of time or other adverse actions. Such laws, regulations or other compliance
requirements include those related to procurement integrity, export control, U.S. government security and
information security regulations, supply chain and sourcing requirements and restrictions, employment practices,
protection of criminal justice data, protection of the environment, accuracy of records, proper recording of costs,
foreign corruption, Trade Agreements Act, Buy America Act, other domestic content requirements, and the False
Claims Act.
Our ability to fund our customer financing activities at economically competitive levels depends on our
ability to source capital and the cost of capital in the credit markets.
The long-term viability and profitability of our financing business is dependent, in part, on our ability to borrow
against or sell leases and the cost of borrowing in the credit markets. This ability and cost, in turn, is dependent on
(i) our credit rating, which is currently non-investment grade according to credit rating agency assessments that are
subject to periodic reviews and can change following a review and (ii) credit market volatility, which is impacted by
global macroeconomic developments such as the war in Ukraine, conflicts in the Middle East. and other global
macroeconomic developments. Increased credit market volatility has, among other things, increased the cost of
borrowing and reduced access to debt and equity markets. We have historically funded our financing business
through a combination of sales and securitizations of finance receivables, capital markets offerings, cash generated
from operations and cash on hand. Our current sourcing strategy is centered on selling existing and newly
originated finance receivables under long term arrangements with financing partners. Our ability to continue to offer
customer financing and be successful in the placement of equipment, software, and IT services with customers
seeking to finance those transactions through Xerox is largely dependent on our ability to source funding at a
reasonable cost. If our credit rating declines, the credit market becomes more volatile, or other events occur that
reduce the demand for, or our funding partners' ability to provide at attractive rates on, customer financing, it may
adversely impact our finance business and results of operations, however, there are alternative sources of funding
available to the majority of our customers, which could reduce the overall impact to the broader Xerox business.
Our level of indebtedness could adversely affect our financial condition and reduce our financial flexibility.
As of December 31, 2024, our total debt was $3.4 billion, which primarily consisted of $2.6 billion of Senior and
Unsecured Debt and approximately $813 million of Secured Borrowings. In the future, we may incur additional
indebtedness for organic or inorganic growth or otherwise. Our level of indebtedness could affect our flexibility and
operations in several ways, including the following:
•
a significant portion of our cash flows could be used to service our indebtedness;
•
the covenants contained in the agreements governing our outstanding indebtedness may limit our ability to
borrow additional funds, dispose of assets, pay dividends, and make certain investments;
•
our debt covenants may also affect our flexibility in planning for, and reacting to, changes in the economy and in
our industry;
•
a high level of debt would increase our vulnerability to general adverse economic and industry conditions;
•
a high level of debt may place us at a competitive disadvantage compared to our competitors that may be less
leveraged and therefore may be able to take advantage of opportunities that our indebtedness would prevent us
from pursuing; and
•
a high level of debt may impair our ability to obtain additional financing in the future for working capital, capital
expenditures, debt service requirements, acquisitions, or general corporate or other purposes.
In addition, revolving borrowings under our ABL (as defined below) and the term loans under our TLB (as defined
below), and potentially other credit facilities we or our subsidiaries may enter into in the future, may bear interest at
variable rates. Increases in market interest rates could lead to higher debt service requirements associated with our
variable-rate borrowings, if any. The effect of inflation on interest rates could increase our financing costs over time,
either through near-term borrowings on our ABL and TLB, refinancing of our existing borrowings, or the issuance of
new debt.
In addition to our debt service obligations, our operations require substantial expenditures on a continuing basis.
Our ability to make scheduled debt payments, to refinance our obligations with respect to our indebtedness and to
fund capital and non-capital expenditures necessary to maintain the condition of our operating assets and
properties, as well as to provide capacity for the growth of our business, depend on our financial and operating
performance. We may not be able to generate sufficient cash flows to pay the interest on our debt, and future
Xerox 2024 Annual Report 15
working capital borrowings or debt or equity financing may not be available to pay or refinance such debt at
attractive rates or at all.
We need to maintain adequate liquidity in order to meet our operating cash flow requirements, repay
maturing debt and meet other financial obligations, such as payment of dividends to the extent declared by
our Board of Directors. If we fail to comply with the covenants contained in our various debt agreements, it
may adversely affect our liquidity, results of operations, and financial condition.
Our liquidity is a function of our cash on-hand and our ability to successfully generate cash flows from a combination
of efficient operations and continuing operating improvements, access to capital markets and funding from third
parties, which includes securitizations and sales of our finance receivables. We believe our liquidity (including
operating and other cash flows that we expect to generate) will be sufficient to meet operating requirements as they
arise; however, our ability to maintain sufficient liquidity going forward will be subject to the general liquidity of and
on-going changes in the credit markets as well as general economic, financial, competitive, legislative, regulatory,
and other market factors that are beyond our control.
Our $425 million asset-based revolving credit agreement (the ABL), dated as of May 22, 2023, with Citibank, N.A.,
as administrative agent and collateral agent, and the lenders and issuing banks party thereto, as amended, contains
a fixed charge coverage ratio of 1x, as defined in the ABL, measured as of the last day of each fiscal quarter during
which excess availability is less than an amount equal to the greater of (A) $31.875 million and (B) 10% of the Line
Cap (the lesser of the aggregate amount of Revolving Commitments and the then-applicable Borrowing Base). Both
the ABL and our $550 million term loan B credit agreement, dated as of November 17, 2023, with Jefferies Finance
LLC as administrative agent and collateral agent, and the lenders party thereto (the TLB), are supported by
guarantees from us and certain US, Canadian, English, German and Belgian subsidiaries, and by security interests
in substantially all of our and such US, Canadian and English, German and Belgian subsidiaries’ assets, subject to
certain exceptions.
The ABL, the TLB and the indenture governing our 2029 Notes also impose operating and financial restrictions on
us and may limit our ability to engage in acts that may be in our best interest, including restrictions on our ability to:
pay dividends, make other distributions in respect of, or repurchase or redeem capital stock; incur additional
indebtedness and guarantee indebtedness; prepay, redeem, or repurchase certain debt; make loans, investments,
and other restricted payments; sell or otherwise dispose of assets; incur liens; enter into agreements restricting our
subsidiaries’ ability to pay dividends; consolidate, merge, or sell all or substantially all of our assets; make strategic
acquisitions or investments; or enter into joint ventures.
Failure to comply with material provisions or covenants in the ABL, the TLB, the 2029 Notes or our other debt
agreements, including our secured financing agreements in connection with our securitization transactions and the
indentures governing our outstanding notes, could have a material adverse effect on our liquidity, results of
operations, and financial condition. A default under certain of our debt agreements may allow our creditors to
accelerate the applicable obligations and result in the acceleration of other obligations to which a cross-acceleration
or cross-default provision applies. In addition, an event of default under the ABL and the TLB would permit the
lenders thereunder to terminate all commitments to extend credit. Furthermore, if we were unable to repay the
amounts due and payable under the ABL and the TLB, the lenders could proceed against the collateral granted to
them to secure the obligations under the ABL and the TLB. If any of our creditors accelerate the repayment of
applicable indebtedness, we and our subsidiaries may not have sufficient assets to repay that indebtedness.
Our credit rating or macroeconomic conditions, including the credit market environment, could impact the terms and
conditions associated with any new indebtedness available to us, and may result in higher borrowing costs and may
contain covenants that would place greater restrictions on how we can run our businesses and/or limit our ability to
take certain actions that might otherwise be beneficial to the Company and/or its shareholders, customers,
suppliers, partners, and/or lenders.
Our financial condition and results of operations could be adversely affected by employee benefit-related
funding requirements.
We sponsor several defined benefit pension and retiree-health benefit plans throughout the world. We are required
to make contributions to these plans to comply with minimum funding requirements imposed by laws governing
these employee benefit plans. Although most of our major defined benefit plans have been amended to freeze
current benefits and eliminate benefit accruals for future service, several plans remain unfunded (by design) or are
under-funded. The projected benefit obligations for these benefit plans at December 31, 2024 exceeded the value of
the assets of those plans by approximately $1.1 billion. The current unfunded or underfunded status of these plans
is a significant factor in determining the ongoing future contributions we will be required to make to these plans.
Accordingly, we expect to have additional funding requirements in future years, and we may make additional,
Xerox 2024 Annual Report 16
voluntary contributions to the plans. Depending on our cash position at the time, any such funding or contributions
to our defined benefit plans could impact our operating flexibility and financial position, including adversely affecting
our cash flow for the quarter in which such funding or contributions are made. Weak macroeconomic conditions and
related under-performance of asset markets could also lead to increases in our funding requirements.
Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our
products, services, and brand.
In developing new technologies and products and maintaining our product portfolio, we rely upon patent, copyright,
trademark, and trade secret laws in the United States and similar laws in other countries, and a combination of
confidentiality, license, assignment and other agreements with our employees, customers, suppliers and other
parties, to establish and maintain our intellectual property rights in technology and products used in our operations.
However, various events outside of our control may pose a threat to our intellectual property rights, as well as to our
products and services. Monitoring and detecting any unauthorized access, use or disclosure of our intellectual
property is difficult and costly and we cannot be certain that the protective measures we have implemented will
completely prevent misuse. Our ability to enforce our intellectual property rights is subject to litigation risks and
uncertainty as to the protection and enforceability of those rights in some countries. If we seek to enforce our
intellectual property rights, we may be subject to claims that those rights are invalid or unenforceable, and others
may seek counterclaims against us, which could have a negative impact on our business. Effective protection of
intellectual property rights is expensive and difficult to maintain, both in terms of application and maintenance costs,
as well as the costs of defending and enforcing those rights. Any action against our Company relating to our
intellectual property rights, regardless of the outcome, could generate substantial costs and require significant
involvement from our management team, which could adversely impact our results of operations and financial
condition. If we are unable to enforce and protect intellectual property rights, or if they are circumvented, rendered
obsolete, invalidated by the rapid pace of technological change, or stolen or misappropriated by employees or third
parties, it could have an adverse impact on our competitive position and business. Changes in intellectual property
laws or their interpretation may impact our ability to protect and assert our intellectual property rights, increase costs
and uncertainties in the prosecution of patent applications or related enforcement actions, and diminish the value
and competitive advantage conferred by our intellectual property assets. Negative publicity generated from
intellectual property disputes could also harm our reputation and brand image.
The efforts we have taken to protect our intellectual property rights may not be sufficient or effective, or existing
agreements may be breached. It is possible that our intellectual property rights could be infringed, misappropriated,
challenged, invalidated, or circumvented, which could allow others to use our intellectual property to our competitive
detriment. Further, we routinely apply for patents to protect innovative ideas in our technology, but we may not
always be successful in obtaining patent grants from these applications. We also pursue registration of copyrights,
trademarks, and domain names in numerous jurisdictions, but doing so may not always be successful or cost-
effective. The laws of certain countries may not protect our proprietary rights to the same extent as the laws of the
United States and we may be unable to protect our proprietary technology adequately against unauthorized third-
party copying or use, which could adversely affect our competitive position. In addition, some of our products rely on
technologies developed by third parties. We may not be able to obtain or to continue to obtain licenses and
technologies from these third parties at all or on reasonable terms, or such third parties may demand cross-licenses
to our intellectual property.
If we fail to accurately anticipate and meet our customers' needs through the development of new products,
technologies, and service offerings or if we fail to adequately protect our intellectual property rights, we could lose
market share and customers to our competitors, which could materially adversely affect our results of operations
and financial condition.
Failure to meet CSR expectations or standards or achieve our CSR goals could adversely affect our
business, results of operations, financial condition, or stock price.
There has been a continued focus from regulators and stakeholders on corporate social responsibility (CSR)
matters, including greenhouse gas emissions and climate-related risks; responsible sourcing and supply chain;
human rights and social responsibility; and corporate governance and oversight. In the European Union, the
Corporate Sustainability Reporting Directive (CSRD) expands the scope of companies required to publicly report
CSR-related information and defines the CSR-related information that companies are required to report in
accordance with European Sustainability Reporting Standards (ESRS). Additionally, in October 2023, and
subsequently in 2024, California enacted a series of laws requiring companies with revenues of over $1 billion who
conduct business in California to disclose their Scope 1, 2 & 3 Greenhouse gas emissions and provide other
relevant disclosures related to carbon offsets. Other mandatory CSR-related disclosures include the Conflict
Minerals Reporting in the U.S., Transparency in Supply Chain Act in California, the Modern Slavery Act in the UK
Xerox 2024 Annual Report 17
and Canada, and the Law on Child Labour Due Diligence in The Netherlands. There are also a number of voluntary
reporting schemes that provide a framework to report CSR-related information.
In 2021, Xerox voluntarily announced its 2040 net zero goal to meet growing expectations of companies to reduce
GHG emissions. Xerox recognizes these goals are subject to risks and uncertainties depending on global climate
change, economic conditions, and other factors outside of our control. Xerox also recognizes transitional risks
associated with changes in voluntary standards and customer preferences in connection with concerns about
climate change. If Xerox is unable to offer products that are as energy efficient as our competitors, there is a risk of
reduced demand for our products and reduced market share. Inability, or a perception of inability, to achieve
progress toward our environmental goals could adversely impact our business or damage our reputation. Damage
to our reputation may reduce demand for our products and services and thus have an adverse effect on our future
financial results and our stock price, as well as require additional resources to rebuild our reputation.
Given our commitment to CSR, we actively engage external and internal stakeholders to manage these issues and
have established and publicly announced certain goals, commitments, and targets which we may refine or even
expand further in the future. These goals, commitments, and targets reflect our current plans and aspirations and
are not guarantees that we will be able to achieve them. Evolving stakeholder expectations and our efforts and
ability to manage these issues, provide updates on them, and accomplish our goals, commitments, and targets
present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside
of our control or could have a material adverse impact on our business, including on our reputation and stock price.
Further, there is uncertainty around the accounting standards, corporate social responsibility, and climate-related
disclosures associated with emerging laws and reporting requirements and the related costs to comply with the
emerging regulations.
Our failure or perceived failure to achieve our CSR goals, maintain CSR practices, or comply with emerging CSR
regulations that meet evolving regulatory or stakeholder expectations could harm our reputation, adversely impact
our ability to attract and retain customers and talent, and expose us to increased scrutiny from the investment
community and enforcement authorities. Increased focus and activism on CSR topics may hinder our access to
capital, as investors may reconsider their capital investment as a result of their assessment of our CSR practices.
Our reputation also may be harmed by the perceptions that our stakeholders have about our action or inaction with
regards to CSR-related issues. Damage to our reputation and loss of brand equity may cause customers to choose
to stop purchasing our products and services, purchase products and services from another company or a
competitor, or refuse to renew existing contracts, ultimately reducing demand for our products and services and thus
have an adverse effect on our future financial results and stock price, as well as require additional resources to
rebuild our reputation.
Regulatory Risk Factors
The international nature of our business subjects us to a number of risks, including foreign exchange and
interest rate risk and unfavorable political, regulatory, and tax conditions in foreign countries.
A significant portion of our revenue is generated from operations outside of the United States, and we manufacture
or acquire many of our products and/or their components outside the United States. As a result of the global nature
of our operations, our business performance and results of operations may be adversely affected by a number of
factors, including:
•
uncertain global economic and political developments that may impact business conditions and demands;
•
global trade issues including changes in, and uncertainties with respect to, trade and export regulatory
requirements, trade policies and sanctions restrictions, tariffs, and international trade disputes;
•
evolving positions taken by governmental agencies regarding possible national economic and/or security
issues posed by the development, sale, or export of certain products and technologies;
•
political instability, natural disasters, regional or global health epidemics, social unrest, terrorism, acts of war
or other geopolitical turmoil;
•
variations among, and weakness and/or changes in, local, regional, national or international laws and
regulations, including contract, intellectual property, data privacy, data protection and cybersecurity, labor,
tax, and import/export laws, and the interpretation and application of such laws and regulations;
•
challenges to effective management of a diverse workforce with different experience levels, languages,
cultures, customs, business practices and worker expectations, and differing employment practices and
labor issues across multiple countries around the world;
•
impacts of climate change on our operations and those of our customers and suppliers;
•
challenges in hiring, retention, and integration of workers in multiple countries around the world; and
•
the increasing need for a mobile workforce to work in or travel to different regions.
Xerox 2024 Annual Report 18
If our future revenues, costs, and results of operations are significantly affected by economic or political conditions
abroad and we are unable to effectively hedge these risks, they could materially adversely affect our results of
operations and financial condition.
Tariffs or other restrictions on foreign imports could negatively impact our financial performance.
Our business, results of operations and financial condition may be negatively impacted by a potential increase in the
cost of our products as a result of new or incremental trade protection measures, such as increased import tariffs or
import or export restrictions or the revocation or material modification of trade agreements. The new U.S.
administration has considered and announced potential tariffs on imports from Canada, Mexico and China as well
as other jurisdictions. Although the ultimate scope and timing of any such tariffs or other measures is indeterminate
they could have a significant impact on our financial condition and results of operations. Changes in U.S. and
international trade policy and resultant retaliatory countermeasures, including imposition of increased tariffs, quotas,
or duties by affected countries and trading partners are difficult to predict and may adversely affect our business.
We operate globally and changes in tax laws could adversely affect our results.
We are subject to income taxes in the United States and foreign jurisdictions. Significant judgment is required to
determine and estimate worldwide tax liabilities. Our provision for income taxes and effective tax rates could be
affected by numerous factors, including changes in applicable tax laws, interpretations of applicable tax laws,
amount and composition of pre-tax income in jurisdictions with differing tax rates, and valuation of deferred tax
assets.
We monitor U.S. and non-U.S. tax law changes that may adversely impact our overall tax costs. From time to time,
proposals have been made and/or legislation has been introduced to change tax rates, as well as related tax laws,
regulations or interpretations thereof, by various jurisdictions, or to limit tax treaty benefits which, if enacted or
implemented could materially increase our tax costs and/or our effective tax rate and could have a material adverse
impact on our financial condition and results of operations. The international tax environment continues to change
as a result of both coordinated actions by governments and unilateral measures designed by individual countries,
both intended to tackle concerns over base erosion and profit shifting (BEPS) and perceived international tax
avoidance techniques. The Organization for Economic Cooperation and Development (OECD) is issuing guidelines
that are different, in some respects, than long-standing international tax principles. This includes the development of
an inclusive framework that is based on a two-pillar approach. In December 2022, the EU Member States formally
adopted the EU’s Pillar Two Directive, which generally provides for a global minimum tax rate of at least 15%.
Various countries in which we operate in have implemented legislation, effective January 1, 2024.
Based on the currently enacted legislation, we do not expect Pillar Two to have a material impact on our financial
statements. However, we will continue to monitor any impact to Xerox as countries continue to amend their tax law
to adopt certain parts of the OECD guidelines. Taxation at the country, state, provincial or municipal level also may
be subject to review and potential override by regional, federal, national, or other government authorities. In
addition, we continue to be subject to examination of our income tax returns by the United States Internal Revenue
Service and other tax authorities around the world. We currently are, and expect to continue to be, subject to
numerous federal, state, local and foreign taxes relating to income, sales & use, value-added (VAT), and other tax
liabilities. While we have established reserves based on assumptions and estimates that we believe are reasonably
sufficient to cover such liabilities, any adverse outcome of a review or audit, or changes in tax laws, could have an
adverse impact on our financial position and results of operations if the reserves prove to be insufficient.
We are subject to breaches of our security systems, cyber-attacks, and service interruptions, which could
expose us to liability, litigation, regulatory action and damage our reputation.
We have implemented and maintain security measures and safeguards, which we believe to be reasonable, to
protect our information systems and our confidential information, including personal information, and that of our
customers, clients and suppliers that is held or processed by us, against unauthorized access or disclosure and to
prevent, detect, contain, respond to, and mitigate security-related threats and potential incidents. We undertake
ongoing improvements to ensure the security of our systems, connected devices, and information-sharing products
in order to minimize potential vulnerabilities, in accordance with industry and regulatory standards. Despite such
efforts, our safeguards may fail or we may be subject to breaches of our security resulting in unauthorized access to
our facilities or information systems and the information we are trying to protect. Moreover, our business or
operations may be affected in the event our customers, clients and suppliers experience data security incidents,
cyber-attacks or extended interruptions of their services or systems. Our operations depend on the use of various
information systems, including those that may have reached their end-of-life, and may contain unpatched
vulnerabilities. Unpatched vulnerabilities in our systems and the utilization of end-of-life systems may expose us to
increased cybersecurity risks, including unauthorized access, data breaches, and operational disruptions. The
Xerox 2024 Annual Report 19
absence of vendor support for end-of-life systems may impede our ability to promptly address and remediate
security issues, potentially leading to extended downtime, data breaches, and financial losses. Additionally, the
third-party software, or applications we utilize may possess inherent vulnerabilities or design, manufacturing, or
operational defects when implemented intentionally or unintentionally in a manner that could compromise the
security of our information systems. Increased adoption of remote work has also increased possible attack surfaces
on our information systems. The techniques used to obtain unauthorized access are constantly changing, are
becoming increasingly sophisticated and often are not recognized until after an exploitation of information has
occurred. Therefore, we may be unable to anticipate these techniques or implement sufficient preventative
measures, or to timely detect and remediate harms caused by such techniques.
Threat actors regularly attempt and, from time to time, have been successful in breaching our security controls, to
gain access to our information and infrastructure through various techniques, including phishing, ransomware,
account compromise, and other targeted attacks. The Company has retained and, in the future, may retain third-
party experts to assist with the containment of and response to security incidents and, in coordination with law
enforcement, with the investigation of such incidents. The Company has incurred, and expects to continue to incur,
costs, including to retain such third-party experts, in connection with such incidents. We may also find it necessary
to make significant further investments to protect this information and our infrastructure. These investments, and
costs we incur in connection with security incidents, could be material.
While we do not believe any cybersecurity incidents to date have resulted in any material impact on our business,
operations or financial results or our ability to service our customers or run our business, incidents resulting in
unauthorized access to our facilities or information systems, or those of our suppliers, or accidental loss or
disclosure of proprietary or confidential information about us, our clients or our customers could result in, among
other things, a total shutdown of our systems that would disrupt our ability to conduct business or pay vendors and
employees, violations of applicable privacy and other data protection laws, significant legal and financial exposure,
damage to our reputation, and a loss of investor confidence in our security measures. Additional impacts from
cybersecurity incidents could include remediation costs to our customers or business partners, such as liability for
stolen assets or information, repairs of system damage, and incentives for continued business; increased
cybersecurity protection costs, which may include the costs of making organizational changes, deploying additional
personnel, resources and security technologies, training employees, and engaging third-party experts and
consultants; lost revenue resulting from the unauthorized use of proprietary information or the failure to retain or
attract business partners following an incident; increased insurance premiums; and damage to the Company’s
competitiveness, stock price, and long-term shareholder value. In addition, cybersecurity risks and data security
incidents could lead to unfavorable publicity, governmental inquiry and oversight, regulatory actions by federal, state
and non-U.S. governmental authorities, litigation by affected parties and possible financial obligations for damages
related to the theft or misuse of such information, any of which could have a material adverse effect on our
profitability and cash flow.
We are subject to laws of the United States and foreign jurisdictions relating to the privacy and protection
of personal information, and failure to comply with those laws could subject us to legal actions and
negatively impact our operations.
We receive, process, transmit and store information relating to identifiable individuals, both in our role as a
technology provider and as an employer. As a result, we are subject to numerous privacy and data protection laws
and regulations in the United States (both federal and state) and foreign jurisdictions.
The global regulatory landscape regarding the protection of personal information is evolving and increasingly
complex, and U.S. (federal and state) and foreign governments have enacted, and are considering further enacting,
legislation and regulations related to privacy and data protection. We expect to see an increase in, or changes to,
the data protection and privacy laws, regulations and standards. For example, the California Consumer Privacy Act
of 20-18 (CCPA), regulates businesses’ processing of personal information, which is defined broadly enough to
include online identifiers provided by individuals’ devices, applications, and protocols (such as IP addresses, mobile
application identifiers and unique cookie identifiers) and individuals’ location data. The CCPA, which went into effect
on January 1, 2020, instituted a new privacy framework in the U.S. for covered businesses by, among other
requirements, establishing certain rights for consumers in California to protect their personal information (including
rights of deletion of and access to personal information), imposing special rules on the collection of consumer data
from minors, creating new notice obligations and new limits on the “sale” of personal information, and creating a
new and potentially severe statutory damages framework for violations of the CCPA and for businesses that fail to
implement reasonable security procedures and practices to prevent data breaches. The CCPA also offers the
possibility for a consumer to recover statutory damages for certain violations and could expose our company to
additional risks of individual and class-action lawsuits even though the statute’s private right of action is limited in
Xerox 2024 Annual Report 20
scope. The California Privacy Rights Act of 2020 (CPRA), which took effect on January 1, 2023, amended and
expanded upon the CCPA to impose additional notice, access, objection, limitation of use, nondiscrimination, and
other obligations and restrictions with regards to the processing of sensitive data and the disclosure (or “sharing”) of
data to third parties, which does not constitute a “sale”.
Several other U.S. states have also enacted, and more are considering enacting, their own data privacy laws.
These laws generally grant individuals a range of new privacy rights and protections relating to their personal data,
and impose obligations on businesses processing such data. The lack of harmonization among the existing and
proposed laws and regulations may create additional compliance costs for us and our industry partners, though
efforts taken toward compliance with other privacy laws will likely be applicable to many elements of the newly
enacted state statutes. Although we have attempted to mitigate certain risks posed by these laws, we cannot predict
with certainty which jurisdictions may enact new laws, or the effect of these laws and their implementing regulations
on our business.
Laws governing personal data in Europe may have a similar effect on our Company. For example, the General
Data Protection Regulation (GDPR) enhances data protection obligations for controllers of such data and for service
providers processing the personal data of individuals in the European Economic Area. It also provides certain rights,
such as access and deletion, to the individuals about whom the personal data relates. Non-compliance with the
GDPR can trigger steep fines of up to the greater of EUR 20 million or 4% of total worldwide annual revenue.
Continuing to maintain compliance with the requirements of the GDPR and other similar foreign laws, including
monitoring and adjusting to rulings and interpretations by supervisory authorities and/or courts of competent
jurisdiction, may affect our approach to compliance and requires significant ongoing time, resources and expense,
as will the effort to monitor whether additional changes to our business practices and our backend configuration are
needed, all of which may increase operating costs, or limit our ability to operate or expand our business.
Furthermore, we are also subject to similar laws related to data protection in other jurisdictions, such as the
Personal Information Protection and Electronic Documents Act (PIPEDA) in Canada, and the General Data
Protection Law (LGDP) in Brazil.
These laws and other obligations may be interpreted and applied in a manner that is inconsistent across
jurisdictions, or which do not align with our existing data management practices or features of our systems and
services. If so, we could be required to fundamentally change our business activities and practices or modify our
products, which could have an adverse effect on our business. We may be unable to make such changes and
modifications in a commercially reasonable manner or at all, and our ability to develop new products and features
could be limited. Changes to existing laws, introduction of new laws in this area, failure to comply with existing laws
that are applicable to us, or an increase in enforcement activity by governments or private parties may subject us to,
among other things, additional costs or changes to our business practices, liability for monetary damages, fines and/
or criminal prosecution, unfavorable publicity or other reputational harm, restrictions on our ability to obtain and
process information and allegations by our customers and clients that we have not performed our contractual
obligations, any of which may have a material adverse effect on our profitability and cash flow.
The use or anticipated use of artificial intelligence (AI) technologies, including generative AI, by us or third
parties, may increase or create new regulatory or operational risks.
AI technologies offer numerous potential benefits, such as creating or increasing operational efficiencies, and we
expect the use of AI and generative AI by us, third parties on our behalf, and other market actors, including our
competitors, to increase. However, the deployment of such technologies also poses certain risks, including that
they may be misused, or the models or datasets on which the models are trained may be flawed or otherwise may
function in an unexpected manner or lead to unexpected or unintended outcomes. The relative newness of the
technology, the speed at which it is being adopted, and the paucity of laws, regulations or standards expressly and
specifically governing its use increases these risks. Any such misuse or any deficiencies in, or failure of, the models
or AI systems could expose us to legal or regulatory risk, damage customer relationships or cause reputational
harm. Our competitors may also adopt AI or generative AI more quickly or more effectively than we do, which could
cause competitive harm.
We are subject to numerous environmental laws, regulations, and procurement initiatives and failure to
comply could result in substantial costs, including cleanup costs, fines, civil or criminal sanctions, third-
party damage or personal injury claims, or limited market access.
Continuing political and social attention to the issue of climate change has led to existing and proposed international
agreements, as well as national, state, local, and foreign legislative, regulatory, and procurement initiatives directed
at requiring companies to disclose and limit greenhouse gas emissions in the countries, states, and territories in
which we operate. Laws, regulatory actions, international agreements, such as the Paris Agreement, and other
Xerox 2024 Annual Report 21
initiatives to address concerns about climate change and greenhouse gas emissions could negatively impact our
business, results of operations, and financial condition, including, among other things, by limiting the availability of
our products, increasing the cost to obtain or sell those products, and increasing our reporting burden and cost of
compliance. Though the ultimate impact of these and similar initiatives is not yet fully known, compliance with such
proposed or newly adopted disclosure initiatives may incur significant costs.
Our operations and our products are subject to environmental regulations in each of the jurisdictions in which we
conduct our business and sell our products. Restrictions on the types and amounts of chemicals that may be
present in electronic equipment or other items that we use or sell continue to proliferate, requiring substantial data
gathering, analysis, and reporting throughout the supply chain. Ongoing research and review of chemicals used in
our products could lead to further restriction of common chemicals in office equipment and supplies. In the
European Union (EU), for example, we are subject to “REACH” Regulation (Registration, Evaluation, Authorization
and Restriction of Chemicals), a broad initiative that requires parties throughout the supply chain to register, assess,
and disclose information regarding many chemicals in their products. Depending on the types, applications, forms,
and uses of chemical substances in various products, REACH and similar regulatory programs in the EU and other
jurisdictions could lead to restrictions and/or bans on certain chemical usage. In the United States, the Toxics
Substances Control Act (TSCA) authorizes the U.S. Environmental Protection Agency to regulate and screen all
chemicals produced or imported into the United States. Xerox continues its efforts toward monitoring and evaluating
the applicability of these and numerous other legislative initiatives in a continuous effort to develop and enable
compliance strategies. As these and similar initiatives and programs become regulatory requirements throughout
the world and/or are adopted as public or private procurement requirements, we must comply. Failure to comply
could result in the company being subject to potential liability and facing market access limitations that could have a
material adverse effect on our operations and financial condition.
Other potentially relevant regulatory initiatives throughout the world include various efforts to limit energy use in
product manufacturing and other environment-related programs impacting products and operations, such as those
associated with climate change accords, agreements, and regulations. For example, the EU Ecodesign for
Sustainable Products Regulation (ESPR) requires specified classes of products to achieve certain design and/or
performance standards in connection with energy use and other environmental parameters and impacts. The EU
ESPR is part of the EU Circular Economy Action Plan (CEAP), which introduced legislative and non-legislative
measures focusing on how products are designed, promoting circular economy processes, encouraging sustainable
consumption, and ensuring waste is prevented. The implementation of the CEAP is expected to impact how
companies prove environmental claims and the materials used, including chemicals and plastics, in products that
are placed on the EU market. Environmentally driven procurement requirements also voluntarily adopted by
customers in the marketplace (e.g., U.S. EPA EnergyStar, EPEAT, and EU Green Public Procurement) are
constantly evolving and becoming more stringent, presenting further market access challenges if our products fail to
conform.
Various countries and jurisdictions have adopted, or are expected to adopt, requirements clarifying manufacturer
roles and responsibilities related to the recovery of products that were placed on the market and remediation of by-
products of the manufacturing process. For example, jurisdictions have adopted or are expected to adopt, programs
that make producers of certain goods (e.g., electrical goods, including computers and printers) and/or packaging
materials responsible for related reporting, fees, and end-of-life management of the products. If we are unable to
meet such “extended producer responsibility” (EPR) requirements in a cost-effective manner, it could materially
adversely affect our results of operations and financial condition. Further, Xerox is party to, or otherwise involved in,
proceedings in a limited number of locations brought by governmental authorities and other third parties under the
federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), known as
"Superfund," or state law equivalents, in which the primary relief sought is the cost of past and/or future remediation
of contamination related to such sites, including impacts attributable to third parties, as well as at third-party sites to
which we sent wastes. The nature of financial exposure depends on a variety of factors, including changes in laws,
known contamination, and discovered contamination that was previously unknown.
Regulatory requirements related to sustainability reporting have been adopted in the EU that, due to our revenues
and employee headcounts in the EU, apply or may apply to us when effective, including the EU Corporate
Sustainability Reporting Directive (CSRD), EU Taxonomy, and the EU Corporate Sustainability Due Diligence
Directive (CSDDD). The EU’s CSRD introduces new compliance requirements that may impact our operations and
financial reporting. The CSRD mandates detailed reporting on environmental, social, and governance factors, and
requires an audit (assurance) of the reported information. Potential risks include increased compliance costs,
operational challenges in data collection, reputational risk, and market access impacts.
Xerox 2024 Annual Report 22
Risks Related to our Pending Acquisition of Lexmark
The Lexmark acquisition may not be completed and the equity purchase agreement may be terminated in
accordance with its terms.
The closing of our acquisition of Lexmark remains subject to the satisfaction or waiver of certain closing conditions,
including regulatory approvals and the approval of the shareholders of Ninestar Corporation, a shareholder of the
seller. These conditions to the completion of the transaction, some of which are beyond the control of us and/or
Lexmark, may not be satisfied or waived in a timely manner or at all; accordingly, the Lexmark acquisition may be
delayed or not completed.
Additionally, either we or Lexmark may terminate the equity purchase agreement under certain circumstances,
subject to the payment of a “termination fee” in certain cases, including if the acquisition does not occur as a result
of the failure to obtain the consent of the shareholders of Ninestar Corporation. In such circumstances, and subject
to certain other conditions, Lexmark is required to reimburse us (in the case of failure to obtain consent from the
shareholders of Ninestar Corporation), and we are required to reimburse Lexmark (in the case of our failure to
obtain certain regulatory approvals) for up to $30 million of documented out-of-pocket expenses.
The Lexmark acquisition may present certain risks to our business and operations prior to the closing and,
if consummated, after the closing.
•
Our business and operations are subject to various risks related to the Lexmark acquisition prior to closing,
including:
•
our operations may be restricted by the terms of the equity purchase agreement, which may cause us to forgo
otherwise beneficial business opportunities;
•
the proposed transaction may disrupt our current business plans and operations;
•
our management’s attention may be directed toward the completion of the Lexmark acquisition and diverted
away from our day-to-day business operations;
•
legal proceedings may be instituted against us, Lexmark or others following announcement of the proposed
transaction;
•
we may incur significantly higher transaction costs than we currently anticipate, such as legal, financing and
accounting fees, and other costs, fees, expenses and charges related to the Lexmark acquisition, whether or
not the transaction is completed; and
•
the Lexmark acquisition may not be completed, which may have an adverse effect on our stock price and future
business and financial results.
In addition, in the event the Lexmark acquisition is consummated, certain risks may continue to exist after the
closing of the Lexmark acquisition, including, among other things, risks that:
•
the future results of the combined company will suffer if the combined company does not effectively manage its
operations following the closing of the transaction;
•
the parties may fail to successfully combine the businesses in a manner that permits the combined company to
realize the benefits of the proposed transaction, including operational and financial opportunities and cost
synergies;
•
Lexmark’s liabilities and/or contractual or other obligations could be greater than expected; and
•
we may not be able to successfully integrate Lexmark’s business with our business on a timely basis.
We will incur a substantial amount of indebtedness in connection with the financing of the Lexmark
Acquisition.
We expect to finance the Lexmark Acquisition by incurring third-party indebtedness and issuing notes. We face risks
associated with increases in overall indebtedness. We cannot guarantee that the combined business will be able to
generate sufficient cash flow to service and repay this indebtedness, or that we will be able to refinance such
indebtedness on favorable terms, or at all. If we are unable to service our indebtedness and fund our operations, we
may be forced to, among other things, reduce or delay capital expenditures, seek additional capital, sell assets, or
refinance our indebtedness. Any such action may not be successful, and we may be unable to service such
indebtedness. Any of the above risks could have a material adverse effect on our business, financial condition,
results of operation, cash flows and/or stock price.
Xerox 2024 Annual Report 23
General Risk Factors
Our business, results of operations and financial condition may be negatively impacted by legal and
regulatory matters.
We have various contingent liabilities that are not reflected on our balance sheet, including those arising as a result
of being involved in a variety of claims, lawsuits, investigations, and proceedings including as discussed in Note 20 -
Contingencies and Litigation in the Consolidated Financial Statements. Should developments in any of these
matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a
material accrual or materially increase an existing accrual, or should any of these matters result in a final adverse
judgment or be settled for significant amounts above any existing accruals, it could have a material adverse effect
on our results of operations, cash flows and financial position in the period or periods in which such change in
determination, judgment or settlement occurs.
Due to the international scope of our operations, we are subject to a complex system of commercial and trade
regulations around the world. With respect to the war in Ukraine, in the first quarter 2022, we halted shipments to
Russia and Belarus when sanctions were imposed, and we completed the sale of all Russian operations in 2023.
Recent years have seen an increase in the development and enforcement of laws regarding trade compliance and
anti-corruption, such as the U.S. Foreign Corrupt Practices Act and similar laws from other countries. Our numerous
foreign subsidiaries, affiliates and joint venture partners are governed by laws, rules and business practices that
differ from those of the U.S. The activities of these entities may not comply with U.S. or foreign laws or business
practices or our Code of Business Conduct. Violations of these laws may result in severe criminal or civil sanctions,
could disrupt our business, and result in an adverse effect on our reputation, business and results of operations or
financial condition. We cannot predict the nature, scope or effect of future regulatory requirements to which our
operations might be subject, our compliance with such requirements, or the manner in which existing laws might be
administered or interpreted.
Our failure to maintain an adequate system of internal control over financial reporting, could adversely
affect our ability to accurately report our results.
Management is responsible for establishing and maintaining adequate internal control over financial reporting. Our
internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements in accordance with generally accepted
accounting principles. A material weakness is a deficiency, or a combination of deficiencies, in our internal control
over financial reporting that results in a reasonable possibility that a material misstatement of the annual or interim
financial statements will not be prevented or detected on a timely basis. Effective internal controls are necessary for
us to provide reliable financial reports and deter and detect any material fraud. If we cannot provide reliable financial
reports or prevent material fraud, our reputation and operating results would be harmed. We maintained effective
internal control over financial reporting as of December 31, 2024, as further described in Part II “Item 9A—Controls
and Procedures.” Our efforts to develop and maintain our internal controls and to remediate any material
weaknesses in our controls may not be successful, and we may be unable to maintain adequate controls over our
financial processes and reporting in the future, including future compliance with the obligations under Section 404 of
the Sarbanes-Oxley Act of 2002. Any failure to develop or maintain effective controls, or difficulties encountered in
their implementation, including those related to acquired businesses, or other effective improvement of our internal
controls could harm our operating results. Ineffective internal controls could also cause investors to lose confidence
in our reported financial information.
Item 1B. Unresolved Staff Comments
None
Item 1C. Cybersecurity
Risk Management Strategy
Xerox Holdings maintains a cyber risk management program designed to identify, assess, manage, mitigate, and
respond to cybersecurity threats. This program is integrated within the Company’s enterprise risk management
system and addresses both the corporate information technology environment and customer-facing products and
services. The underlying controls of the cyber risk management program are based on recognized leading practices
and standards for cybersecurity and information technology, including the National Institute of Standards and
Technology (NIST) Cybersecurity Framework (CSF) and the International Organization for Standardization (ISO)
27001 Information Security Management System Requirements.
Xerox 2024 Annual Report 24
The risk management program is primarily focused on safeguarding the organization's digital assets, ensuring
continuous business operations, and minimizing the potential impact of cyber threats. The structured risk
management process is designed to comprehensively identify and assess risks, implement effective mitigation and
remediation strategies, enhance overall cybersecurity resilience, and provide transparent reporting. Continuous risk
assessments are conducted through internal evaluations and routine engagements with independent third-party
security services organizations to systematically identify, prioritize and manage information security risks.
Subsequently, risk mitigation strategies are developed and executed to address and remediate identified risks
effectively through new cybersecurity initiatives and ongoing enhancements to the cybersecurity program. Regular
audits and assessments, including penetration tests and attack simulations, are performed both internally and
through independent third-party consultants, and internal auditors evaluate the operational effectiveness of
cybersecurity controls and risk management measures. These inputs form the basis of a risk register that is
integrated into the overall enterprise risk management program to further inform the Company's strategy assessing
the likelihood, impact, and velocity of these risks on a forward-looking, multi-year mitigated basis. A formal process
exists grounded in the enterprise risk management program where material risks, interdependencies, and the
associated remediation plans that are tracked to completion at a minimum on a monthly basis are presented and
discussed cross-functionally. In addition to the normal discourse on emerging risks, a focused drill down into
cybersecurity risk is presented annually at the enterprise risk steering committee meeting.
All employees and contractors play an important role in protecting the organization from cyber threats. We have
implemented a formal cybersecurity training and awareness program that includes mandatory annual information
security training and continuous education through various enterprise collaboration platforms. Our Cyber Defense
team plays an important role in implementing our protection, detection, and response capabilities. Security incidents
are evaluated, ranked by severity and prioritized for response and remediation. Our incident response process
outlines actions required to triage, analyze, contain, remediate, and safely recover from cybersecurity incidents. Our
incident response program ensures management is informed and involved in monitoring and addressing security
and privacy incidents. The program uses a coordinated escalation model to engage relevant management and
Board members as needed. It includes regular training and simulations for preparedness, with periodic updates to
the Board on the program’s status and significant incidents, ensuring robust oversight and governance. Security
incidents are evaluated to determine materiality as well as operational and business impacts and are reviewed for
privacy impacts.
Xerox Holdings has established a structured third-party risk management program, with a primary focus on
assessing and mitigating potential cyber risks linked to external vendors and partners who have access to the
organization's digital assets or play a role in storing and processing data. This also extends to the software supply
chain supporting our products and services. A thorough due diligence process is conducted on all prospective third
parties to evaluate their overall security posture and alignment with Xerox Holdings' organizational standards.
Additionally, ongoing assessments are regularly conducted on selected existing vendors and partners to confirm
their continuous compliance with Xerox Holdings' cybersecurity standards and policies. Where applicable, we also
include security and data privacy addendums in our third-party contracts. Xerox Holdings also engages with
external managed security service providers to support certain day-to-day operational activities in addition to in-
house cybersecurity staff as part of the cybersecurity program.
To date, no cybersecurity incident has resulted in any material impact on our business, operations or financial
results or our ability to service our customers or run our business. We maintain insurance coverage designed to
mitigate our exposure to network security and privacy matters.
Refer to Item 1A Risk Factors for additional discussion of risks associated with cybersecurity threats to the
Company.
Governance
Xerox Holdings' Cybersecurity organization is a global organization and is dedicated to protecting its infrastructure,
information, and digital assets. It is responsible for establishing appropriate security policies, safeguards and
controls to prevent, detect and respond to cyber threats, meet regulatory and compliance requirements, secure
Xerox Holdings' intellectual property, products and services, and supply chain in collaboration with business,
product, and IT partners. The information security organization is led by the Chief Information Security Officer
(CISO) who reports to the Chief Administrative Officer and Global Head of Operations. With more than twenty years
of experience in security, the CISO began his security career serving in the United States Marine Corps (USMC),
leading physical security and executive protection for Marine One. He subsequently led cybersecurity programs for
U.S. Cyber Command and the Pentagon, advised Fortune 500 clients on cybersecurity and crisis response matters
as an Advisory Director at PwC, and has held positions as CISO or Deputy CISO for public and private companies.
The CISO is currently pursuing a Master of Business Administration (MBA), and is a Certified Information Systems
Xerox 2024 Annual Report 25
Security Professional (CISSP) and Certified Information Security Manager (CISM). He has extensive experience in
multiple security domains, including security operations, incident detection and response, security architecture,
identity and access management, cloud security, vulnerability and threat management, application/product security,
policy, and compliance.
The Audit Committee of the Board of Directors provides governance and oversight of the cybersecurity program and
approves the information security program annually. Regular updates are presented to the Audit Committee by the
CISO on the current state of the cybersecurity program, providing transparency including progress on initiatives,
operational and compliance metrics, risks, cybersecurity and data privacy incidents (if any), and appropriate
remediation actions. The outcomes of these cross-functional risk discussions noted above, are submitted quarterly
to the Audit Committee of the Board of Directors.
The Board of Directors also considers cybersecurity topics on an ad hoc basis where appropriate, including for
purposes of receiving briefings on developments in cybersecurity or cybersecurity incidents and assessing and
managing potentially material risks arising from cybersecurity threats. There are two committees comprised of
Company leadership, including the enterprise risk management steering committee, which meets monthly, and the
Xerox Holdings management audit committee, which meets at least quarterly, to discuss the current operational and
security compliance metrics, cybersecurity incidents, and risks.
Item 2. Properties
We own or lease several manufacturing, engineering and research facilities. Our principal owned manufacturing and
engineering facilities are located in New York, Oklahoma, Oregon and Ireland, and our principal owned research
facility is located in New York. Our Corporate Headquarters is a leased facility located in Norwalk, Connecticut.
In 2024, we owned or leased facilities globally which include general offices, sales offices, service locations, data
centers, call centers, manufacturing facilities, warehouses and distribution centers. The size of our property portfolio
at December 31, 2024 was approximately 9.8 million square feet, which was comprised of 242 leased facilities and
10 owned properties with 58 buildings (of which 45 are located on our Webster, New York campus). We occupied
approximately 8.1 million square feet, 1.6 million square feet were surplus, and approximately 61 thousand square
feet was sublet to third parties. It is our opinion that our properties have been well maintained, are in sound
operating condition and contain all the necessary equipment and facilities to perform their functions. Our properties
are primarily managed by, and are in support of, the Print and Other segment. The XFS segment does share in the
use of certain facilities for which they are allocated occupancy costs. We believe that our current facilities are
suitable and adequate for our current businesses.
Refer to Note 11 - Lessee in the Consolidated Financial Statements, for additional information regarding our leased
assets.
Item 3. Legal Proceedings
We are engaged in numerous legal actions arising in the ordinary course of our business (for example, proceedings
relating to employment matters or the initiation or defense of proceedings relating to intellectual property rights), and
while there can be no assurance, we believe that the ultimate outcome of these other legal actions will not have a
material adverse effect on our business, results of operations, financial condition or cash flows.
Item 4. Mine Safety Disclosures
Not applicable.
Xerox 2024 Annual Report 26
Part II
Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
Corporate Information
Stock Exchange Information
Xerox Holdings Corporation's common stock (XRX) is listed on the Nasdaq Global Select Market.
There is no established public trading market for Xerox Corporation's common stock, as all of the outstanding Xerox
common stock is held solely by Xerox Holdings.
Common Shareholders of Record
As of December 31, 2024, Xerox Holdings Corporation had approximately 17,571 shareholders of record.
Dividends
For additional information regarding dividends, refer to Item 7 - Management's Discussion and Analysis and Item 8 -
Financial Statements and Supplementary Data, Xerox Holdings Corporation Statement of Shareholders' Equity,
which is incorporated herein by reference.
Performance Graph(1)
Comparison of Cumulative Five-Year Total Return
Xerox Holdings Corporation
S&P 600 Index
S&P 600 Information Technology Index
2019
2020
2021
2022
2023
2024
$0
$50
$100
$150
$200
$250
$300
$350
Total Return to Shareholders
Year Ended December 31,
2019
2020
2021
2022
2023
2024
Xerox Holdings Corporation
$
100.00
$
66.39
$
67.70
$
46.50
$
62.22
$
31.22
S&P 600 Index
100.00
111.29
141.13
118.41
137.42
149.37
S&P 600 Information Technology Index
100.00
127.81
162.12
125.86
152.23
151.00
_____________
Source: Standard & Poor's Investment Services
(1)
Graph assumes $100 invested on December 31, 2019 in Xerox Holdings, S&P 600 Index and the S&P 600 Information Technology Index,
respectively, and assumes dividends are reinvested.
Xerox 2024 Annual Report 27
Sales Of Unregistered Securities During the Quarter Ended December 31, 2024
There were no unregistered sales of securities for the quarter ended December 31, 2024.
Issuer Purchases of Equity Securities During the Quarter Ended December 31, 2024
There were no repurchases of Xerox Holdings Corporation's Common Stock for the quarter ended December 31,
2024 pursuant to share repurchase programs authorized by Xerox Holdings' Board of Directors.
Repurchases Related to Stock Compensation Programs(1):
Total Number of
Shares Purchased
Average Price
Paid per Share(2)
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
Maximum Approximate
Dollar Value of Shares
That May Yet Be
Purchased Under the
Plans or Programs
October 1 through 31
7,073
$
10.31
n/a
n/a
November 1 through 30
38,303
8.39
n/a
n/a
December 1 through 31
—
—
n/a
n/a
Total
45,376
_____________
(1) These repurchases are made under a provision in our restricted stock compensation programs for the indirect repurchase of shares through
a net-settlement feature upon the vesting of shares in order to satisfy minimum statutory tax-withholding requirements.
(2) Exclusive of fees and expenses.
Item 6. [Reserved]
Information pertaining to Item 6 is not presented in accordance with amendments to Item 301 of Regulation S-K.
Xerox 2024 Annual Report 28
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations
Throughout the Management’s Discussion and Analysis (MD&A) that follows, references to "Xerox Holdings" refer to
Xerox Holdings Corporation and its consolidated subsidiaries, while references to "Xerox" refer to Xerox
Corporation and its consolidated subsidiaries or Xerox Holdings Corporation and its consolidated subsidiaries, as
determined by the context. References herein to “we,” "us," “our,” or the “Company,” refer collectively to both Xerox
Holdings and Xerox unless the context suggests otherwise. References to “Xerox Holdings Corporation” refer to the
stand-alone parent company and do not include its subsidiaries. References to “Xerox Corporation” refer to the
stand-alone company and do not include its subsidiaries.
Xerox Holdings' primary direct operating subsidiary is Xerox and Xerox reflects nearly all of Xerox Holdings'
operations. Accordingly, the following MD&A primarily focuses on the operations of Xerox and is intended to help the
reader understand Xerox's business and its results of operations and financial condition. Throughout this combined
Form 10-K, references are made to various notes in the Consolidated Financial Statements which appear in Part II,
Item 8 of this combined Form 10-K, and the information contained in such notes is incorporated by reference into
the MD&A in the places where such references are made.
Xerox Holdings' other direct subsidiary is Xerox Ventures LLC, which was established in 2021 solely to invest in
startups and early/mid-stage growth companies aligned with the Company’s innovation focus areas and targeted
adjacencies. The investments are primarily equity or equity-linked securities and for less than 20% ownership.
Xerox Ventures LLC had investments of approximately $40 million and $26 million at December 31, 2024 and 2023,
respectively. In January 2024, Myriad Ventures Fund I LP was established, and the investments held by Xerox
Ventures LLC were transferred to this new entity, which will continue to be fully consolidated by Xerox Holdings.
Due to its immaterial impact to earnings and the balance sheet, and for ease of discussion, Xerox Ventures LLC's
results are included within the following discussion.
Executive Overview
2024 was the second year of our Reinvention. Reinvention is a multi-year strategy designed to transform the way
Xerox operates. Its objectives are to strengthen our core business and improve financial flexibility to enable
investments in solutions, initiatives, and capabilities that will position Xerox to deliver long-term, sustainable growth
in revenue and profits. Total revenue for full year 2024 of $6.2 billion decreased 9.7% reflecting a 0.7-percentage
point benefit from acquisitions, as well as a 0.2-percentage point adverse impact from currency.
Recent Changes and Developments
In January 2024, we implemented a significant reorganization of our business, including the adoption of a business
unit-led operating model, the re-alignment of our sales organization and the establishment of a Global Business
Services (GBS) organization to centralize key business processes and enable enterprise-wide efficiencies and
productivity gains. These changes brought closer alignment between our sales, marketing and offering teams and
the economic buyers of our products and services, improved operating efficiency and positioned the Company to
acquire and integrate ITsavvy and Lexmark, two transactions we expect will accelerate our Reinvention by
diversifying our mix of revenue and further strengthening our core businesses.
The focus of our Reinvention efforts in 2024 was threefold: Geographic Simplification, Operational Simplification,
and Commercial Optimization & Growth. We made significant progress across each priority.
•
Geographic Simplification:
–
Replaced direct-to-end-customer with partner-led distribution models in Latin America and parts of Europe
•
Operational Simplification
–
Implemented business-unit led operating model
–
Established GBS
–
Achieved gross savings target of more than $200 million in 2024
–
Restructured commercial arrangements with technology and Business Process Outsourcing Partners to
create flexibility and mutually aligned incentives to reduce operating costs
•
Commercial Optimization and Growth:
–
Stopped manufacturing certain High-End production equipment to focus on Production submarkets with
higher growth and return profiles
–
Deployed A.I.-enabled pricing tools and revamped sales territory coverage
Xerox 2024 Annual Report 29
–
Closed the acquisition of ITsavvy, immediately enhancing Xerox’s IT Solutions offering and expanding Total
Addressable Market (TAM) of Xerox's offerings
–
Announced pending acquisition of Lexmark, providing greater exposure to growing Print markets
Refer to Note 6 - Acquisitions and Divestitures in the Consolidated Financial Statements for additional
information regarding our acquisitions and divestitures.
Goodwill Impairment
During the third quarter 2024, we identified events and conditions that required a quantitative assessment of
Goodwill, as operating results for the quarter, as well as updated forecasts for the full year, were below previous
forecasts. In addition, during 2024, the Company experienced a decline in its stock price and market capitalization,
which became significant and sustained during the third quarter. After completing our quantitative impairment test,
we concluded that the estimated fair value of the Print and Other reporting unit (the only reporting unit with
Goodwill) had declined below its carrying value and we recognized an after-tax, non-cash impairment charge of
$1,015 million ($1,058 million pre-tax) related to our Goodwill in the third quarter 2024.
Business Overview
With annual revenues of approximately $6.2 billion, we are a leading global provider of digital print technology and
related services, software and solutions. Our primary offerings span four main areas: Workplace Solutions,
Production Solutions, Xerox Services, and Xerox Financial Services (XFS).
•
Workplace Solutions is comprised of two strategic product groups, Entry and Mid-Range, much of which share
common solutions, apps and ConnectKey® software. Workplace Solutions revenues include the sale of
products (captured primarily as equipment sales) as well as software, supplies and the associated technical
service and financing of those products through XFS (captured as post sale revenue).
•
Production Solutions are designed for customers in the graphic communications, in-plant and production print
environments with high-volume printing requirements. Our broad portfolio of presses and solutions provides
black-and-white and full-color, as well as on-demand printing across a wide range of applications.
•
Xerox® Services includes a continuum of solutions and services that helps our customers optimize their
physical print and digital information infrastructures, apply automation and simplification to maximize
productivity, and ensure the highest levels of security. Our primary offerings in this area are Managed Print
Services1 (MPS), IT Solutions, Capture & Content Services (CCS) and Customer Engagement Services (CES).
CCS and CES encompass a range of Digital Services that leverage our software capabilities in Workflow
Automation, Personalization and Communication Software, Content Management Solutions, and Digitization
Services.
•
XFS is a global financing solutions business and currently offers financing for direct channel customer
purchases of Xerox equipment and solutions through bundled lease agreements and lease financing to end-
user customers who purchase Xerox equipment and solutions through our indirect channels.
Headquartered in Norwalk, Connecticut, with approximately 16,800 employees, Xerox serves customers globally in
North America, Latin America, Brazil, Europe, Eurasia, the Middle East, Africa and India. We have a broad and
diverse base of customers by both geography and industry, ranging from small and mid-sized clients to printing
production companies, governmental entities, educational institutions and Fortune 1000 corporations. Our business
does not depend upon a single customer, or a few customers. The loss of a single customer would not have a
material adverse effect on our business. In 2024, approximately 45% of our revenue was generated outside the
United States.
Post-sale Based Business Model
In 2024, 78% of our total revenue was post-sale-based, is comprised, in part, of managed print services1, supplies
and financing. These revenue streams generally follow equipment placements and provide stability to our revenue
and cash flows. Key indicators of future post sale revenue include installs of printers and multifunction devices, the
number and type of machines in the field (MIF), page volumes, revenue per page, and the type and nature of
related software and ancillary services provided to customers. Post sale revenue also includes revenues from IT
Solutions, comprised of IT hardware and associated services revenues, Digital services, as well as gains,
commissions, and servicing revenue associated with the sale of finance receivables.
_____________
(1)
Previously known as contractual print services, and includes revenues from service, maintenance and rentals. IT solutions and digital
services are not included in managed print services.
Xerox 2024 Annual Report 30
Financial Overview
Total revenue of $6.2 billion in 2024 decreased 9.7% and included a 0.7-percentage point benefit from acquisitions,
as well as a 0.2-percentage point adverse impact from currency. 2024 total revenue reflected a decrease in Post
sale revenue of 7.4%, which included a 0.9-percentage point benefit from acquisitions, as well as a 0.1-percentage
point adverse impact from currency. Equipment sales revenue decreased 16.7% and included a 0.2-percentage
point adverse impact from currency.
Net (loss) income was as follows:
Year Ended December 31,
B/(W)
(in millions)
2024
2023
2022
2024
2023
Net (loss) income
$
(1,321) $
1
$
(322) $
(1,322) $
323
Adjusted(1) Net income
135
287
189
(152)
98
Net loss for 2024 of $(1,321) million declined by $1,322 million as compared to Net income of $1 million in 2023.
The decrease in Net income primarily reflects the after-tax Goodwill impairment charge of $1,015 million ($1,058
million pre-tax) in 2024, as well as lower revenue and gross profit, higher Income tax expense, higher Other
expenses, net, which includes the impacts of higher non-service retirement-related costs, the impact of Divestitures,
and higher Amortization of intangible assets. These negative impacts were partially offset by lower Selling,
administrative and general expenses, Restructuring and related expenses, net, and Research, development and
engineering expenses, as well as the favorable impact to the current year resulting from the after-tax PARC
donation charge of $92 million ($132 million pre-tax) during 2023.
Adjusted1 net income for 2024 of $135 million decreased $152 million as compared to 2023 primarily reflecting
lower revenue and gross profit, as well as higher Other expenses, net. These negative impacts were partially offset
by lower Selling, administrative and general expenses, and lower Research, development and engineering
expenses.
_____________
(1)
Refer to the "Non-GAAP Financial Measures" section for an explanation of this non-GAAP financial measure.
A summary of our segment information is as follows:
Year Ended December 31,
% Change
% of Total
(in millions)
2024
2023
2022
2024
2023
2024
2023
Revenue
Print and Other
$
5,935
$
6,571
$
6,804
(9.7) %
(3.4) %
95 %
95 %
XFS
357
401
393
(11.0) %
2.0 %
6 %
6 %
Intersegment Elimination(1)
(71)
(86)
(90)
(17.4) %
(4.4) %
(1) %
(1) %
Total Revenue
$
6,221
$
6,886
$
7,107
(9.7) %
(3.1) %
100 %
100 %
Expenses
Print and Other
$
5,667
$
6,211
$
6,546
(8.8) %
(5.1) %
96 %
95 %
XFS
323
372
376
(13.2) %
(1.1) %
5 %
6 %
Intersegment Elimination(1)
(71)
(86)
(90)
(17.4) %
(4.4) %
(1) %
(1) %
Segment Expenses
$
5,919
$
6,497
$
6,832
(8.9) %
(4.9) %
100 %
100 %
Profit
Print and Other
$
268
$
360
$
258
(25.6) %
39.5 %
89 %
93 %
XFS
34
29
17
17.2 %
70.6 %
11 %
7 %
Total Profit
$
302
$
389
$
275
(22.4) %
41.5 %
100 %
100 %
_____________
(1)
Intersegment revenue primarily reflect commissions and other payments, made by the XFS segment to the Print and Other segment for the
lease of Xerox equipment placements, while Intersegment expense primarily reflect origination fees and commissions made by the Print and
Other Segment to the XFS Segment who lease Xerox equipment to 3rd parties.
Cash from operating activities was $511 million in 2024 as compared to $686 million in 2023. The decrease of $175
million was primarily related to lower net income as well as higher payments for accrued compensation, pension
contributions, and restructuring, partially offset by net proceeds of approximately $752 million from the on-going
sales of finance receivables under the finance receivables funding agreement, as well as lower finance receivable
originations, and improvements in cash for working capital1.
Xerox 2024 Annual Report 31
Cash used in investing activities was $198 million in 2024 as compared to $5 million in 2023. 2024 primarily
reflected the acquisition of ITsavvy, as well as capital expenditures of $44 million, $11 million related to the impact of
the deconsolidation of an entity that is now accounted for using the equity method of accounting, and $16 million for
investments in noncontrolling interests, all of which was partially offset by net cash proceeds of approximately $20
million from the sale of assets, and $7 million from the sales of our business operations in Argentina and Chile.
Cash used in financing activities was $271 million in 2024 as compared to $1,202 million in 2023. 2024 primarily
reflected net payments of approximately $658 million on Senior Notes due in 2024 and 2025, $282 million on
secured financing arrangements, $18 million for debt issuance costs, and $28 million on the Term Loan B facility.
Partially offsetting payments on debt were proceeds from the issuance of Senior Notes during first quarter 2024 of
approximately $900 million. Dividend payments were $141 million and purchases of capped calls were $23 million in
connection with the issuance of Convertible Senior Notes.
_____________
(1)
Working capital, net reflects Accounts receivable, net, Inventories and Accounts payable.
2025 Outlook
In 2025, we expect total Revenue to grow low single-digits in constant currency1, inclusive of a full year of revenue
associated with the recent ITsavvy acquisition. Revenue guidance includes approximately 400 basis points of
headwinds associated with ongoing Reinvention actions, including the flow through of geographic simplification
actions, reductions in High End equipment sales associated with our decision to stop manufacturing High End
Production print equipment, the sale of our European paper business and the continued reduction of XFS revenue
associated with a declining finance receivable portfolio. Core, organic revenue is expected to decline, but at a lower
rate than we experienced in 2024. An improved core, organic revenue trajectory is expected to be driven primarily
by market share gains in equipment, and growth in Digital Services and legacy IT Solutions.
In 2025, adjusted1 operating income margin is expected to be at least 5.0%. The slight year-over-year improvement
reflects incremental gross cost savings, partially offset by higher product costs.
We expect Operating cash flows to be between $420 million and $470 million in 2025. The year-over-year decline in
operating cash is primarily due to lower finance receivables forward flow benefits, partially offset by improved
adjusted1 operating income and working capital. Capital expenditures are expected to be approximately $70 million.
_____________
(1)
Refer to the "Non-GAAP Financial Measures" section for an explanation of this non-GAAP financial measure.
Currency Impact
To understand the trends in the business, we believe that it is helpful to analyze the impact of changes in the
translation of foreign currencies into U.S. Dollars on revenue and expenses. We refer to this analysis as "constant
currency", “currency impact” or “the impact from currency.” This impact is calculated by translating current period
activity in local currency using the comparable prior year period's currency translation rate. This impact is calculated
for all countries where the functional currency is the local country currency. We do not hedge the translation effect of
revenues or expenses denominated in currencies where the local currency is the functional currency. Management
believes the constant currency measure provides investors an additional perspective on revenue trends. Currency
impact can be determined as the difference between actual growth rates and constant currency growth rates.
Approximately 45% of our consolidated revenues during 2024 and 2023, respectively, are derived from operations
outside of the U.S. where the U.S. Dollar is normally not the functional currency. As a result, foreign currency
translation had a 0.2-percentage point adverse impact on revenue in 2024 and a 0.2-percentage point favorable
impact on revenue in 2023.
Xerox 2024 Annual Report 32
Critical Accounting Estimates
In preparing our Consolidated Financial Statements and accounting for the underlying transactions and balances,
we apply various accounting policies. Senior management has discussed the development and selection of the
critical accounting policies, estimates and related disclosures included herein with the Audit Committee of the Xerox
Holdings Board of Directors. We consider the policies discussed below as critical to understanding our Consolidated
Financial Statements, as their application places the most significant demands on management's judgment, since
financial reporting results rely on estimates of the effects of matters that are inherently uncertain. In instances where
different estimates could have reasonably been used, we disclosed the impact of these different estimates on our
operations. In certain instances, such as revenue recognition for leases, the accounting rules are prescriptive;
therefore, it would not have been possible to reasonably use different estimates. Changes in assumptions and
estimates are reflected in the period in which they occur. The impact of such changes could be material to our
results of operations and financial condition in any quarterly or annual period.
Specific risks associated with these critical accounting estimates are discussed throughout the MD&A, where such
policies affect our reported and expected financial results. For a detailed discussion of the application of these and
other accounting policies, refer to Note 2 - Recent Accounting Pronouncements and Summary of Significant
Accounting Policies in the Consolidated Financial Statements.
Revenue Recognition
Application of the various accounting principles in GAAP related to the measurement and recognition of revenue
requires us to make judgments and estimates including ASC Topic 606 - Revenue from Contracts with Customers
and ASC Topic 842 Leases. Refer to Note 2 - Recent Accounting Pronouncements and Summary of Significant
Accounting Policies in the Consolidated Financial Statements for additional information regarding our revenue
recognition and lease revenue recognition policies. Complex arrangements with nonstandard terms and conditions
may require significant contract interpretation to determine the appropriate accounting. Specifically, the revenue
related to the following areas involves significant judgments and estimates:
Bundled Lease Arrangements: We sell our equipment direct to end customers under bundled lease arrangements,
which typically include the equipment, service, supplies and a financing component for which the customer pays a
single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These
arrangements also typically include an incremental, variable component for page volumes in excess of the
contractual page volume minimums, which are often expressed in terms of price-per-image or page. Lease
deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services,
which include supplies. Sales made under bundled lease arrangements directly to end customers comprise 51% or
$706 million of our equipment sales revenue. Revenues under these bundled lease arrangements are allocated
considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled
arrangement. The allocation of revenue among the elements – equipment versus post sale (service, supplies and
financing) – has remained fairly consistent.
Sales to Distributors and Resellers: We utilize distributors and resellers to sell many of our products, supplies and
parts to end-user customers. Sales to distributors and resellers are generally recognized as revenue when products
are shipped to such distributors and resellers. Distributors and resellers participate in various discount, rebate,
price-support, cooperative marketing and other programs, and we record provisions and allowances for these
programs as a reduction to revenue when the sales occur. Similarly, we also record estimates for sales returns and
other discounts and allowances when the sales occur. We consider various factors, including a review of specific
transactions and programs, historical experience and market and economic conditions when calculating these
provisions and allowances. Total sales of equipment, supplies and parts to distributors and resellers were $973
million for the year ended December 31, 2024 and provisions, and allowances recorded on these sales were
approximately 26% of the associated gross revenues.
Allowance for Doubtful Accounts and Credit Losses
The allowance for doubtful accounts and credit losses is based on an assessment of historical collection experience
as well as consideration of current and future economic conditions and changes in our customer-specific collection
trends. Our methodology includes an expected loss model that incorporates an assessment of current and future
economic conditions.
We recorded bad debt provisions of $42 million, $28 million and $43 million in Selling, administrative and general
(SAG) expenses in our Consolidated Statements of (Loss) Income for the three years ended December 31, 2024,
2023 and 2022, respectively. The reserves, as a percentage of trade and finance receivables, were 4.7% at
Xerox 2024 Annual Report 33
December 31, 2024, as compared to 4.4% and 4.1% at December 31, 2023 and 2022, respectively. We continue to
assess our receivables portfolio in light of the current macroeconomic environment and its impact on our estimation
of the adequacy of the allowance for doubtful accounts.
In 2024, we recorded approximately $8 million of reserve reversals related to our finance receivable provision,
primarily due to the additional write-offs of two large customer receivable balances in Canada.
In 2023, we recorded approximately $12 million of reserve reversals related to our finance receivable provision,
primarily related to a reserve release in the U.S. due to the favorable reassessment of the credit exposure on a
large customer receivable balance after a contract amendment, which improved our credit position.
During the five-year period ended December 31, 2024, our reserve for doubtful accounts ranged from 4.1% to 4.8%
of gross receivables. Holding all assumptions constant, a 0.5-percentage point increase or decrease in the reserve
from the December 31, 2024 rate of 4.7% would change the 2024 provision by approximately $13 million.
Refer to Note 2 - Recent Accounting Pronouncements and Summary of Significant Accounting Policies, Note 7 -
Accounts Receivable, Net and Note 8 - Finance Receivables, Net in the Consolidated Financial Statements for
additional information regarding our policy with respect to the Allowance for Doubtful Accounts and Credit Losses.
Pension Plan Assumptions
We sponsor defined benefit pension plans in various forms in several countries covering employees who meet
eligibility requirements. Where legally possible, we have amended our major defined benefit pension plans to freeze
current benefits and eliminate benefit accruals for future service, including our U.S. defined benefit plans, the
Canadian Salary Pension Plan and the U.K. Final Salary Pension Plan. In certain non-U.S. plans, we are required to
continue to consider salary increases and inflation in determining the benefit obligation related to past service. Our
pension plan in the Netherlands for past service is a Collective Defined Contribution (CDC) plan with future service
benefits provided in a defined contribution plan for 2023 and later years. From a Company risk perspective, this
CDC plan operates just like a defined contribution plan as the Company was only responsible for a contribution for
annual benefit accruals under 5-year agreements through 2022. Although the Company risk has been mitigated,
under U.S. GAAP this CDC plan does not meet the definition of a defined contribution plan and therefore is
accounted for as a defined benefit plan. In December 2023, the Trustees for the U.K. pension plan entered a
second insurance buy-in contract, in accordance with U.K. pension regulations. The insurance buy-in contract is a
group annuity contract that is expected to provide an income stream to cover a significant majority of the cash flows
arising for the plan population with future contracted payments. However, the benefit obligation remains with the
plan and the Company. This arrangement further mitigates the Company's risk associated with these obligations.
Several statistical and other factors that attempt to anticipate future events are used in calculating the expense,
liability and to project asset values related to our defined benefit pension plans. These factors include assumptions
we make about the expected return on plan assets, discount rate, lump-sum settlement rates, the rate of future
compensation increases and mortality. Differences between these assumptions and actual experiences are reported
as net actuarial gains and losses and are subject to amortization to net periodic benefit cost over future periods.
Cumulative net actuarial losses for our defined benefit pension plans of $2.1 billion as of December 31, 2024
decreased by $177 million from December 31, 2023, primarily due to the impact of higher discount rates and the
resultant decrease of the Projected Benefit Obligation (PBO), the amortization of actuarial losses, and U.S.
settlement losses, as well as the impact of favorable currency, partially offset by the loss from actual returns. The
total actuarial loss at December 31, 2024 is subject to offsetting gains or losses in the future due to both changes in
actuarial assumptions and future experience and will be recognized in future periods through amortization or
settlement losses.
We used a consolidated weighted average expected rate of return on plan assets of 5.2% for 2024, 5.2% for 2023
and 3.9% for 2022, on a worldwide basis. During 2024, the actual return on plan assets was a loss of $98 million as
compared to an expected return of $264 million, with the difference primarily due to lower returns than expected for
fixed income holdings, most notably in the U.S. Plans, and for the group annuity contracts held in our U.K. Plan due
to rising interest rates. When estimating the 2025 expected rate of return, in addition to assessing recent
performance, we considered the historical returns earned on plan assets, the rates of return expected in the future,
particularly in light of current economic conditions, and our investment strategy and mix with respect to the plans'
assets. The weighted average expected rate of return on plan assets we will use in 2025 is 5.6% which is 0.4%
higher as compared to 2024, as a result of the increase in yields on fixed income investments.
Xerox 2024 Annual Report 34
Another significant assumption affecting our defined benefit pension obligations and the net periodic benefit cost is
the rate that we use to discount our future anticipated benefit obligations. In the U.S. and the U.K., which comprise
approximately 75% of our PBO, we consider yield curves derived from Moody's Aa or better rated Corporate Bonds
and U.K. Corporate bonds rated AA by at least one of the main ratings agencies, respectively, in the determination
of the appropriate discount rate assumptions. The consolidated weighted average discount rate we used to
measure our pension obligations as of December 31, 2024 and to calculate our 2025 expense was 4.9%; the rate
used to calculate our obligations as of December 31, 2023 and our 2024 expense was 4.4%. The increase reflects
higher interest rates in both the U.S. and non-U.S. regions.
Holding all other assumptions constant, the following table summarizes the estimated impacts of a 0.25% change in
the discount rate and a 0.25% change in the expected return on plan assets:
Discount Rate
Expected Return
(in millions)
0.25%
Increase
0.25%
Decrease
0.25%
Increase
0.25%
Decrease
(Decrease)/Increase
2025 Projected net periodic pension cost
$
(2) $
3
$
(14) $
14
Projected benefit obligation as of December 31, 2024
(75)
80
N/A
N/A
One of the most significant elements of our net periodic defined benefit pension plan expense was settlement
losses. Our primary domestic plans allow participants the option of settling their vested benefits through the receipt
of a lump-sum payment. We recognize the losses associated with these settlements immediately upon the
settlement of the vested benefits. Settlement accounting requires us to recognize a pro-rata portion of the aggregate
unamortized net actuarial losses upon settlement. The pro-rata factor is computed as the percentage reduction in
the projected benefit obligation due to the settlement of a participants' vested benefits. Settlement accounting is only
applied when the event of settlement occurs - i.e., the lump-sum payment is made. Since settlement is dependent
on an employee's decision and election, the level of settlements and the associated losses can fluctuate
significantly from period to period. During 2024, lump-sums under the U.S. primary domestic plans became limited
to less than the full benefit obligation, and as a result, settlement expense for 2024 was less than historic levels.
During the three years ended December 31, 2024, 2023 and 2022, U.S. plan settlements were approximately $20
million, $70 million and $240 million, respectively, and the associated settlement losses on those plan settlements
were $5 million, $19 million and $56 million, respectively.
The following is a summary of our benefit plan expenses for the three years ended December 31, 2024, 2023 and
2022, as well as estimated amounts for 2025:
Estimated
Actual
(in millions)
2025
2024
2023
2022
Defined benefit pension plans(1)(2)
$
85
$
104
$
41
$
9
Defined contribution plans
35
40
40
37
Retiree health benefit plans
(20)
(18)
(16)
(3)
Total Benefit Plan Expense
$
100
$
126
$
65
$
43
____________
(1) The increase in 2024 expense is primarily due to an increase in actuarial losses subject to amortization and the resultant increase in the
amortization of these prior period losses.
(2) Includes settlement expense of $5 million, $19 million and $56 million for the three years ended December 31, 2024, 2023 and 2022,
respectively.
The following is a summary of our benefit plan funding for the three years ended December 31, 2024, 2023 and
2022, as well as estimated amounts for 2025:
Estimated
Actual
(in millions)
2025
2024
2023
2022
U.S. Defined benefit pension plans
$
110
$
100
$
53
$
24
Non-U.S. Defined benefit pension plans
30
27
28
81
Defined contribution plans(1)
35
40
40
17
Retiree health benefit plans
20
18
21
19
Total Benefit Plan Funding
$
195
$
185
$
142
$
141
____________
(1) The difference of $20 million between the 2022 funded amount of $17 million and the 2022 expense of $37 million is due to employer
matching contributions for our U.S. based 401(k) savings plans for salaried employees being expensed in 2022 as earned and contributed in
January of 2023.
Xerox 2024 Annual Report 35
Approximately $77 million of the U.S. pension contributions in 2024 were for our tax-qualified defined benefit plans.
Approximately $85 million of estimated U.S. pension contributions for 2025 are for our tax-qualified defined benefit
plans. However, once the next actuarial valuations and projected results are available, actual contributions required
to meet minimum funding requirements will be determined and finalized and may change from the current estimate.
The decrease in non-U.S. Defined benefit pension plan contributions in 2023 is due to no further contributions to our
U.K. defined benefit pension plan being required after October 2022 following agreement of the triennial valuation of
the Plan with the Plan Trustees.
Refer to Note 18 - Employee Benefit Plans in the Consolidated Financial Statements for additional information
regarding defined benefit pension plan assumptions, expense and funding.
Income Taxes
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgments are required in
determining the consolidated provision for income taxes. Our provision is based on nonrecurring events as well as
recurring factors, including the taxation of foreign income. In addition, our provision will change based on discrete or
other nonrecurring events such as audit settlements, tax law changes, changes in valuation allowances, etc., that
may not be predictable.
We record the estimated future tax effects of temporary differences between the tax bases of assets and liabilities
and the amounts reported in our Consolidated Balance Sheets, as well as operating loss and tax credit
carryforwards. Deferred tax assets are assessed for realizability and, where applicable, a valuation allowance is
recorded to reduce the total deferred tax asset to an amount that will, more-likely-than-not, be realized in the future.
We apply judgment in assessing the realizability of these deferred tax assets and the need for any valuation
allowances. In determining the amount of deferred tax assets that are more-likely-than-not to be realized, we
consider historical profitability, projected future taxable income, the expected timing of the reversals of existing
temporary differences and tax planning strategies. Refer to Note 19 - Income and Other Taxes in the Consolidated
Financial Statements for additional information regarding the valuation allowance against our deferred tax assets.
Due to the lower-than-expected actual results for the third quarter 2024 combined with the lower-than-expected
forecast for full-year results, a valuation allowance of approximately $161 million was recorded, primarily related to
certain deferred tax assets in a non-U.S. tax jurisdiction, as we concluded that it is more-likely-than-not that those
deferred tax assets will not be realized in the ordinary course of operations. This assessment was based on the
available positive and negative evidence at September 30, 2024, including scheduling of deferred tax liabilities and
projected income from operating activities. The amount of the net deferred tax assets considered realizable,
however, could change in the near term if additional objective information becomes available in the future including
if income or income tax rates are higher or lower than currently estimated, or if there are differences in the timing or
amount of future reversals of existing taxable or deductible temporary differences.
In the event we were to determine that there is a change in the realizability of our deferred tax assets in the future,
an adjustment to the valuation allowance would be recorded to income in the period such determination was made.
Our valuation allowance changed through income tax expense by approximately $195 million, $(4) million and $7
million for the years ended December 31, 2024, 2023 and 2022, respectively. There were other changes to our
valuation allowance, including the effects of currency, of $(59) million, $13 million and $2 million for the years ended
December 31, 2024, 2023 and 2022, respectively. These did not affect income tax expense in total as there was a
corresponding adjustment to Deferred tax assets or Other comprehensive loss.
The following is a summary of gross deferred tax assets and the related valuation allowances for the years ended
December 31, 2024, 2023 and 2022:
Year Ended December 31,
(in millions)
2024
2023
2022
Gross deferred tax assets
$
1,213
$
1,267
$
1,138
Valuation allowance
(511)
(375)
(366)
Net deferred tax assets
$
702
$
892
$
772
We are subject to ongoing tax examinations and assessments in various jurisdictions. Accordingly, we may incur
additional tax expense based upon our assessment of the more-likely-than-not outcomes of such matters. In
addition, when applicable, we adjust the previously recorded tax expense to reflect examination results. Our
ongoing assessments of the more-likely-than-not outcomes of the examinations and related tax positions require
judgment and can materially increase or decrease our effective tax rate, as well as impact our operating results.
Xerox 2024 Annual Report 36
Unrecognized tax benefits were $95 million, $140 million and $110 million at December 31, 2024, 2023 and 2022,
respectively.
Refer to Note 19 - Income and Other Taxes in the Consolidated Financial Statements for additional information
regarding deferred income taxes and unrecognized tax benefits.
Business Combinations and Goodwill
We allocate the fair value of purchase consideration to tangible assets, liabilities assumed, and intangible assets
acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair
values of these identifiable assets and liabilities is allocated to Goodwill. The allocation of the purchase
consideration requires management to make significant estimates and assumptions, especially with respect to
intangible assets. These estimates can include, but are not limited to, future expected cash flows of acquired
customers, development of new offerings, acquired technology and trade names from a market participant
perspective, as well as estimates of useful lives and discount rates. Management’s estimates of fair value are based
upon assumptions believed to be reasonable and when appropriate, include assistance from independent third-
party valuation firms. During the measurement period, which is up to one year from the acquisition date, we may
record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to Goodwill. Upon
the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Refer to Note 6 -
Acquisitions and Divestitures in the Consolidated Financial Statements for additional information regarding the
allocation of the purchase price consideration for our acquisitions.
Our Goodwill, net balance was $1.9 billion at December 31, 2024. We assess Goodwill for impairment at least
annually, or more frequently on an interim basis if we believe indicators of an impairment exist. The application of an
interim or the annual Goodwill impairment test begins with the identification of reporting units, which requires
judgment. A reporting unit is the same as, or one level below, an operating segment. The Company has two
operating/reportable segments - Print and Other, and XFS. We determined that the Print and Other, and XFS
operating segments were also our reporting units for Goodwill assessment purposes. The Goodwill, net balance is
fully allocated to the Print and Other reporting unit and no Goodwill has been allocated to the XFS reporting unit.
The process of evaluating the potential impairment of Goodwill is highly subjective and requires significant
judgment. Our review of impairment starts with an assessment of qualitative factors to determine whether events or
circumstances lead to a determination that it is more-likely-than-not that the fair value of the Company is less than
the net book value. Our qualitative assessment of the recoverability of Goodwill, whether performed annually or
based on specific events or circumstances, considers various macroeconomic, industry-specific and company-
specific factors. These factors include: (i) severe adverse industry or economic trends; (ii) significant company-
specific actions, including exiting an activity in conjunction with restructuring of operations; (iii) current, historical or
projected deterioration of our financial performance; or (iv) a sustained decrease in our market capitalization below
our net book value. After assessing the totality of events and circumstances, if we determine that it is not more-
likely-than-not that the fair value of the Company is less than its net book value, no further assessment is
performed. If we determine that it is more-likely-than-not that the fair value of the Company is less than net book
value or if we elect to bypass the qualitative assessment, we proceed to a quantitative assessment or test of
Goodwill.
If a quantitative assessment of Goodwill is required, the determination of the fair value of the Company will involve
the use of significant estimates and assumptions. Our quantitative Goodwill impairment test uses both the income
approach and the market approach to estimate fair value. The income approach is based on the discounted cash
flow method that uses the Company's estimates of forecasted future financial performance including revenues,
gross margins, operating expenses, and taxes, as well as working capital and capital asset requirements. These
estimates are developed as part of our long-term planning process based on assumed market segment growth
rates and our assumed market segment share, estimated costs based on historical data and various internal
estimates. Projected cash flows are then discounted to a present value employing a discount rate that properly
accounts for the estimated market weighted-average cost of capital, as well as any risks unique to the subject cash
flows. When performing our market approach, we rely specifically on the guideline public company method. Our
guideline public company method incorporates revenues and earnings multiples from publicly traded companies
with operations and other characteristics similar to our reporting units. The selected multiples consider our reporting
units' growth, profitability, size and risk relative to those of the selected publicly traded companies.
Xerox 2024 Annual Report 37
Goodwill Impairment and Annual Assessment
During the third quarter 2024, we identified events and conditions that required a quantitative assessment of
Goodwill, as operating results for the quarter, as well as updated forecasts for the full year, were below previous
forecasts. In addition, during 2024, the Company experienced a decline in its stock price and market capitalization,
which became significant and sustained during the third quarter. After completing our quantitative impairment test,
we concluded that the estimated fair value of the Print and Other reporting unit (the only reporting unit with
Goodwill) had declined below its carrying value and we recognized an after-tax, non-cash impairment charge of
$1,015 million ($1,058 million pre-tax) related to our Goodwill in the third quarter 2024.
In estimating the fair value of the Print and Other reporting unit, we reconciled the fair value of the Company to the
Company's market capitalization, and our analysis reflected a 75/25 allocation between the income and market
approach, respectively, and the application of a discount rate applied to our projected cash flows of approximately
12.00%. The weighting between the income and market approach was consistent with our assessment in the third
quarter 2022 (the last time a quantitative assessment was completed), and reflects the inherent limitation of a
market comparison. The applied discount rate was 125 basis points higher than the rate applied in the third quarter
2022 assessment primarily due to higher market interest rates. We believe that the discount rate applied was
reasonable based on the estimated capital costs of applicable market participants and an appropriate company-
specific risk premium that reflected current market and industry conditions.
In performing our quantitative assessment for the third quarter 2024, the Company believes it made reasonable
estimates based on the facts and circumstances that were available as of the reporting date. However, the
assessment of fair value includes assumptions that are subject to risk and uncertainty. Estimated forecasts are
dependent on subjective factors including the timing and amount of future cash flows and the discount rate. If the
Company's future performance varies from current expectations, assumptions, or estimates, including those
assumptions relating to interest rates, inflationary pressure on product and labor costs, execution of Reinvention,
and geopolitical uncertainty, this may impact the impairment analysis and could reduce the underlying cash flows
used to estimate fair values and result in a decline in fair value that may trigger future impairment charges.
Refer to Note 12 - Goodwill, Net and Intangible Assets, Net in the Consolidated Financial Statements for additional
information regarding Goodwill.
Xerox 2024 Annual Report 38
Revenue Results Summary
Total Revenue
Revenue for the three years ended December 31, 2024, 2023 and 2022 was as follows:
Revenue
% Change
CC % Change
% of Total Revenue
(in millions)
2024
2023
2022
2024
2023
2024
2023
2024
2023
2022
Equipment sales
$ 1,378
$ 1,655
$ 1,624
(16.7) %
1.9 %
(16.5) %
1.7 %
22 %
24 %
23 %
Post sale revenue
4,843
5,231
5,483
(7.4) %
(4.6) %
(7.3) %
(4.8) %
78 %
76 %
77 %
Total Revenue
$ 6,221
$ 6,886
$ 7,107
(9.7) %
(3.1) %
(9.5) %
(3.3) %
100 %
100 %
100 %
Reconciliation to Consolidated Statements of (Loss) Income:
Sales
$ 2,378
$ 2,720
$ 2,800
(12.6) %
(2.9) %
(12.3) %
(3.4) %
Less: Supplies, paper and other sales
(1,000) (1,065) (1,176)
(6.1) %
(9.4) %
(5.7) %
(10.5) %
Equipment sales
$ 1,378
$ 1,655
$ 1,624
(16.7) %
1.9 %
(16.5) %
1.7 %
Services, maintenance and rentals
$ 3,692
$ 3,975
$ 4,100
(7.1) %
(3.0) %
(7.1) %
(3.0) %
Add: Supplies, paper and other sales
1,000
1,065
1,176
(6.1) %
(9.4) %
(5.7) %
(10.5) %
Add: Financing
151
191
207
(20.9) %
(7.7) %
(20.9) %
(8.0) %
Post sale revenue
$ 4,843
$ 5,231
$ 5,483
(7.4) %
(4.6) %
(7.3) %
(4.8) %
Segments
Print and Other
$ 5,935
$ 6,571
$ 6,804
(9.7) %
(3.4) %
95 %
95 %
96 %
XFS
357
401
393
(11.0) %
2.0 %
6 %
6 %
5 %
Intersegment elimination(1)
(71)
(86)
(90)
(17.4) %
(4.4) %
(1) %
(1) %
(1) %
Total Revenue(2)
$ 6,221
$ 6,886
$ 7,107
(9.7) %
(3.1) %
100 %
100 %
100 %
_____________
CC - See "Currency Impact" section for description of constant currency.
(1)
Reflects revenue, primarily commissions and other payments, made by the XFS segment to the Print and Other segment for the lease of
Xerox equipment placements.
(2)
Refer to the "Reportable Segments" section.
Revenue
Total revenue decreased 9.7% for the year ended December 31, 2024 reflecting a 0.7-percentage point benefit from
acquisitions, as well as a 0.2-percentage point adverse impact from currency. The decrease in total revenue was
primarily due to lower post sale revenue, reflecting lower page volumes associated with our managed print services1
contracts, intentional reductions in non-core revenue, including lower margin IT endpoint device placements, Fuji
royalty income, paper sales, and Finance income, as well as the effects of Reinvention actions, including
geographic and offering simplification, and lower PARC revenue. These negative impacts to post sale revenue were
in part offset by the benefits of a partial quarter of ITsavvy, as well as higher supplies and digital and legacy
managed IT services revenue. The decrease in total revenue also reflects lower equipment sales, resulting from an
unfavorable mix, the effects of backlog fluctuations in the current and prior year, the decision to stop manufacturing
certain high-end equipment, the effects of geographic simplification, and the impacts from the implementation of
organizational model changes in the first half of 2024. Equipment revenue declined across all product groups, and
was most pronounced in Mid-range.
Total revenue decreased 3.1% for the year ended December 31, 2023 and included a 0.8-percentage point benefit
from acquisitions and a 0.2-percentage point benefit from currency. The decrease in revenue was attributable to
lower post sale revenue, reflecting the intentional reduction of non-strategic revenue - paper and IT endpoint device
placement sales, as well as the termination of Fuji royalty income and the donation of PARC. Contractual print
services declined modestly, due to lower production print activity, our exit from Russia and a shift in distribution
strategy for one of our European markets, partially offset by Digital and Managed IT Services revenue growth, which
includes the benefits from an acquisition. The decrease in Post sale revenue was partially offset by growth in
equipment sales revenue, reflecting stable demand, higher pricing, and favorable mix, as well as improved product
supply availability and the associated year-over-year reduction in backlog.
_____________
(1)
Previously known as contractual print services, and includes revenues from service, maintenance and rentals. IT solutions and digital
services are not included in managed print services.
Xerox 2024 Annual Report 39
Total revenues included the following:
Post sale revenue
Post sale revenue reflects revenues from managed print services1, supplies and financing. These revenues are
associated not only with the population of devices in the field, which is affected by installs and removals, but also by
the page volumes generated from the usage of such devices and the revenue per printed page. Post sale revenue
also includes revenues from IT Solutions, comprised of IT hardware and associated services, Digital services, as
well as gains, commissions, and servicing revenue associated with the sale of finance receivables.
For the year ended December 31, 2024, Post sale revenue decreased 7.4% as compared to the prior year, which
included a 0.9-percentage point benefit from the recent acquisition of ITsavvy, partially offset by a 0.1-percentage
point adverse impact from currency. For the year ended December 31, 2023, Post sale revenue decreased 4.6% as
compared to the prior year and included a 1.1-percentage point benefit from an acquisition, as well as a 0.2-
percentage point benefit from currency.
Post sale revenue is comprised of the following:
Services, maintenance and rentals revenue includes maintenance revenue (including bundled supplies), the
services portion of our IT Solutions offering, digital services revenue and rentals, and other revenues.
•
For the year ended December 31, 2024, these revenues decreased 7.1% as compared to the prior year period
and included no impact from currency. Managed print services1 revenue declined year-over year driven by lower
outsourcing and print service revenue, including the effects of geographic simplification, as well as lower rental
revenue, the termination of Fuji royalty income and the donation of PARC. These impacts were partially offset
by higher organic and inorganic managed IT Solutions revenue, including the benefits of a partial quarter of
ITsavvy results, as well as higher digital services revenue, and gains, commission and servicing revenue
associated with the sale of finance receivables.
•
For the year ended December 31, 2023, these revenues decreased 3.0% as compared to the prior year period
and included no impact from currency. The decline in revenues was due in part to the termination of Fuji royalty
income and the donation of PARC. Contractual print services revenue decreased modestly as compared to the
prior year period, primarily reflecting declines in production print activity, our exit from Russia and the shift in
distribution strategy for one of our European markets. These declines were partially offset by revenue growth in
Digital and Managed IT Services, which includes the benefits of a recent acquisition, and price increases, as
well as gains and commissions, and servicing revenue on sales of finance receivables.
Supplies, paper and other sales includes unbundled supplies, IT hardware and other sales.
•
For the year ended December 31, 2024, these revenues decreased 6.1% as compared to the prior year,
including a 2.1-percentage point benefit from the recent acquisition of ITsavvy, as well as a 0.4-percentage point
adverse impact from currency. The decline at constant currency2 primarily reflecting lower sales of non-
strategic, lower margin IT endpoint device placements and paper sales, as well as the effects of geographic
simplification. These declines were partially offset by the benefit of revenue from the ITsavvy acquisitions, and
higher supplies revenue.
•
For the year ended December 31, 2023, these revenues decreased 9.4% as compared to the prior year,
including a 1.1-percentage point benefit from currency, primarily reflecting lower paper sales, as well as IT
hardware, particularly endpoint devices, and unbundled supplies revenue. Paper and IT endpoint sales are low
margin and non-strategic, and are expected to be reduced further over time.
Financing revenue is generated from direct and indirect financing of Xerox equipment.
•
For the year ended December 31, 2024, Financing revenue decreased 20.9% as compared to the prior year,
including no impact from currency. The decline reflects a continued reduction of the average finance receivables
balance in 2024, resulting from the sales of finance receivables during 2023 and 2024 to HPS Investment
Partners (HPS) and De Lage Landen Financial Services Canada Inc. (DLL), as well as lower originations.
Finance receivables are approximately $800 million lower at December 31, 2024 as compared to December 31,
2023.
•
For the year ended December 31, 2023, Financing revenue decreased 7.7% as compared to the prior year,
including a 0.3-percentage point benefit from currency. The decline at constant currency2 reflects a reduction of
the average finance receivables balance during 2023 as a result of the sales of finance receivables to HPS
Investment Partners (HPS). Finance receivables were approximately $600 million lower in December of 2023 as
compared to December of 2022.
_____________
(1)
Previously known as contractual print services, and includes revenues from service, maintenance and rentals. IT solutions and digital
services are not included in managed print services.
(2)
See "Currency Impact" section for description of constant currency.
Xerox 2024 Annual Report 40
Equipment sales revenue
Equipment sales revenue decreased 16.7% for the year ended December 31, 2024 as compared to the prior year,
including a 0.2-percentage point adverse impact from currency. The decrease in constant currency1 was primarily
impacted by unfavorable mix, as well as the effects of backlog fluctuations in the current and prior year, the decision
to stop manufacturing certain high-end equipment, the effects of geographic simplification, and the impacts from the
organizational changes implemented in the first half of 2024. Revenue declined across all product groups, and was
most pronounced in Mid-range, reflecting declines in both black-and-white and color installations, with a mix toward
lower-priced A3 color multi-function printers.
For the year ended December 31, 2023, Equipment sales revenue increased 1.9% as compared to the prior year,
including a 0.2-percentage point benefit from currency. The increase in constant currency1 reflects improvement in
product availability for higher-margin mid-range and high-end devices, in the Americas region, as well as recent
pricing actions and stable demand conditions. These increases were partially offset by lower revenue from the Entry
product group, primarily in EMEA, as compared to the prior year period.
See Segment Review - Print and Other below for additional discussion on Equipment sales revenue.
_____________
(1)
See "Currency Impact" section for description of constant currency.
Xerox 2024 Annual Report 41
Costs, Expenses and Other Income
Summary of Key Financial Ratios
The following is a summary of our key financial ratios used to assess our performance:
Year Ended December 31,
(in millions)
2024
2023
2022
2024 B/(W)
2023 B/(W)
Gross Profit
$
1,960
$
2,314
$
2,318
$
(354)
$
(4)
RD&E
191
229
304
38
75
SAG
1,537
1,696
1,760
159
64
Equipment Gross Margin
30.2 %
33.7 %
25.1 %
(3.5) pts.
8.6 pts.
Post sale Gross Margin
31.9 %
33.6 %
34.9 %
(1.7) pts.
(1.3) pts.
Total Gross Margin
31.5 %
33.6 %
32.6 %
(2.1) pts.
1.0 pts.
RD&E as a % of Revenue
3.1 %
3.3 %
4.3 %
0.2 pts.
1.0 pts.
SAG as a % of Revenue
24.7 %
24.6 %
24.8 %
(0.1) pts.
0.2 pts.
Pre-tax Loss(1)
$
(1,216)
$
(28)
$
(325)
$
(1,188)
$
297
Pre-tax Loss Margin(1)
(19.5) %
(0.4) %
(4.6) %
(19.1) pts.
4.2 pts.
Adjusted(2) Operating Profit
$
302
$
389
$
275
$
(87)
$
114
Adjusted(2) Operating Margin
4.9 %
5.6 %
3.9 %
(0.7) pts.
1.7 pts.
_____________
(1)
2024 includes a pre-tax non-cash Goodwill impairment charge of $1,058 million, 2023 includes the pre-tax PARC donation charge of $132
million, and 2022 includes a pre-tax non-cash Goodwill impairment charge of $412 million.
(2)
Refer to the "Non-GAAP Financial Measures" section for an explanation of the non-GAAP financial measure.
Gross Margin
Total gross margin for the year ended December 31, 2024 of 31.5% decreased 2.1-percentage points compared to
2023, primarily reflecting lower revenue and gross profit, primarily due to charges associated with the exit of certain
production print manufacturing operations, which had a 0.8-percentage point unfavorable impact on gross margin,
as well as higher transportation and product costs, an unfavorable equipment mix and lower print volumes. These
impacts were partially offset by the benefits associated with recent Reinvention-related cost and productivity actions
and currency.
Total gross margin for the year ended December 31, 2023 of 33.6% increased 1.0-percentage points compared to
2022, primarily reflecting lower supply chain-related costs, favorable equipment mix, and the benefits associated
with recent pricing and cost and productivity actions, as well as financing gains and commissions, and servicing
revenues on sales of finance receivables. These favorable impacts were partially offset by lower revenue, which
includes the termination of Fuji royalty income, and price increases from a product supplier, as well as lower
financing margin.
Equipment gross margin for the year ended December 31, 2024 of 30.2% decreased 3.5-percentage points
compared to 2023, primarily reflecting lower revenue and gross profit, as well as higher product and transportation
costs, the exit of certain production print manufacturing operations, and unfavorable product and channel mix.
These impacts were partially offset by currency.
Equipment gross margin for the year ended December 31, 2023 of 33.7% increased 8.6-percentage points as
compared to 2022, reflecting higher revenue, a favorable product and channel mix, lower supply chain-related
costs, and the benefits associated with recent pricing actions. These favorable impacts were partially offset by price
increases from a product supplier.
Post sale gross margin for the year ended December 31, 2024 of 31.9% decreased 1.7-percentage points
compared to 2023, reflecting lower revenue, including lower page volumes, lower gross profit, and charges
associated with the Company's Reinvention, primarily related to the exit of certain production print manufacturing
operations, which had a 1.0-percentage point unfavorable impact on gross margin. These impacts were partially
offset by the benefits associated with recent Reinvention-related cost and productivity actions and favorable
currency.
Post sale gross margin for the year ended December 31, 2023 of 33.6% decreased 1.3-percentage points
compared to 2022, reflecting lower revenue due to the termination of Fuji royalty income, and lost revenues as a
result of the donation of PARC, as well as a lower financing margin. Financing margin decreased primarily due to
higher interest costs. These impacts were partially offset by the benefits of associated cost and productivity actions
and lower supply chain-related costs, as well as gains, commissions, and servicing revenues on sales of finance
receivables.
Xerox 2024 Annual Report 42
Research, Development and Engineering Expenses (RD&E)
Year Ended December 31,
Change
(in millions)
2024
2023
2022
2024
2023
R&D
$
142
$
174
$
246
$
(32) $
(72)
Sustaining engineering
49
55
58
(6)
(3)
Total RD&E Expenses
$
191
$
229
$
304
$
(38) $
(75)
RD&E as a percentage of revenue for the year ended December 31, 2024 of 3.1% decreased 0.2-percentage points
as compared to 2023, and RD&E of $191 million for the year ended December 31, 2024 decreased $38 million as
compared to 2023. The decrease was primarily due to productivity and cost savings related to the Company's
Reinvention, the spin-off, exit, or shutdown of certain other RD&E related activities or businesses, and the
corresponding reduction in real estate. The lower spending in innovation reflects decisions which provide greater
focus and financial flexibility to pursue growth opportunities adjacent to our core operations. The decrease also
reflected the strategic decision to donate PARC in 2023.
RD&E as a percentage of revenue for the year ended December 31, 2023 of 3.3% decreased 1.0-percentage point
as compared to 2022, and RD&E of $229 million for the year ended December 31, 2023, decreased $75 million as
compared to 2022. The decrease was primarily due to the strategic decision to donate PARC and the spin-off, exit,
or shutdown of certain other RD&E related activities or businesses. The lower spending in innovation reflects
decisions which provide greater focus and financial flexibility to pursue growth opportunities adjacent to our core
operations within Print, Digital and Managed IT services.
Selling, Administrative and General Expenses (SAG)
SAG as a percentage of revenue of 24.7% increased 0.1-percentage points for the year ended December 31, 2024
as compared to 2023, primarily due to lower revenue, as well as higher bad debt expense, which were partially
offset by lower selling and other administrative and general expenses. SAG expenses of $1,537 million for the year
ended December 31, 2024 were $159 million lower than 2023, primarily reflecting productivity and cost savings
related to the Company's Reinvention, as well as, lower incentive compensation expense, IT expenses, outsourcing
costs, commission payments, litigation expense, and advertising costs, as well as the strategic decision to donate
PARC in the prior year. These favorable impacts were partially offset by higher bad debt expense, the inclusion of a
partial quarter of ITsavvy results and transaction-related expenses related to the recent acquisition of ITsavvy and
expected acquisition of Lexmark, as well as other Reinvention-related investments, and unfavorable currency.
Bad debt expense for the year ended December 31, 2024 of $42 million increased $14 million as compared to 2023.
The increase reflects a reserve release in 2023 of approximately $12 million due to a favorable reassessment of the
credit exposure on a large customer receivable balance, as well as an increased provision for aged accounts
receivables in the current year. The adverse impacts were offset by a lower finance receivable balance, as a result
of sales of finance receivables in recent quarters to HPS Investment Partners and De Lage Landen Financial
Services Canada Inc.
SAG as a percentage of revenue of 24.6% decreased 0.2-percentage points for the year ended December 31, 2023
compared to 2022. SAG expenses of $1,696 million for the year ended December 31, 2023 were $64 million lower
than 2022 primarily reflecting the prior year stock compensation expense of $21 million associated with the
accelerated vesting of all outstanding equity awards in connection with the passing of Xerox Holding's former CEO.
SAG also benefited from productivity and cost savings, including savings related to restructuring actions, the
strategic decision to donate PARC and other dispositions as well as a reduced investment in new businesses.
Additionally, the decrease in SAG reflected lower bad debt expense, lower supply chain-related costs, and the
favorable true-up of prior year shared services contract costs. These benefits were partially offset by higher
incentive compensation expense and marketing expenses, and the impact of an acquisition.
Bad debt expense for the year ended December 31, 2023 of $28 million decreased $15 million as compared to the
prior year, primarily due a lower finance receivable provision of $20 million partially offset by higher provision for
trade receivables of $5 million. The decrease in the 2023 finance receivable provision reflected a reserve release of
approximately $12 million as a result of a favorable reassessment of the credit exposure on a large customer
receivable balance as well as the benefits related to the sale of finance receivables on a non-recourse basis as part
of our on-going finance receivables funding agreement. The increase in the trade receivable provisions is partly due
to an increase in aged receivables in the U.S.
We continue to monitor developments in future economic conditions, and as a result, our reserves may need to be
updated in future periods. As of December 31, 2024, on a trailing twelve-month basis, bad debt expense (excluding
Xerox 2024 Annual Report 43
the reserve release in 2024) was approximately 1.9% of total receivables, as compared to approximately 1.3% for
the prior year comparable period (excluding the reserve release of approximately $12 million in 2023), primarily due
to a lower finance receivables balance of approximately $800 million at December 31, 2024.
Refer to Note 7 - Accounts Receivable, Net and Note 8 - Finance Receivables, Net in the Consolidated Financial
Statements for additional information regarding our bad debt provision and related reserves.
Restructuring and Related Costs, Net
We incurred restructuring and related costs, net of $112 million, $167 million and $65 million for the three years
ended December 31, 2024, 2023 and 2022, respectively. These costs were primarily related to the implementation
of initiatives under our business transformation projects to reduce and realign our cost structure to the changing
nature of our business.
Restructuring and related costs, net reflect the following components:
Year Ended December 31,
2024
2023
2022
Restructuring charges, net(1)
$
62
$
114
$
68
Asset impairment charges, net
25
32
(6)
Related costs, net
25
21
3
Total Restructuring and related costs, net
$
112
$
167
$
65
____________
(1) Reflects net headcount reductions of approximately 1,100, 2,125, and 1,940 for the three years ended December 31, 2024, 2023 and 2022,
respectively.
2024 Restructuring and related costs, net are associated with strategic actions taken as a result of the Company's
Reinvention, primarily related to optimizing operations, the exit of certain production print manufacturing operations,
and geographic simplification, as well as consulting and other costs associated with our initiatives.
2024 actions impacted several functional areas, with approximately 55% focused on gross margin improvements,
approximately 35% focused on SAG reductions, and the remainder focused on RD&E enhancements. We expect
2025 pre-tax savings of approximately $98 million from our 2024 restructuring actions.
Refer to Note 13 - Restructuring Programs in the Consolidated Financial Statements for additional information
regarding our restructuring programs. The restructuring reserve balance as of December 31, 2024, for all programs,
was $113 million, of which $90 million is expected to be paid over the next twelve months.
Amortization of Intangible Assets
Amortization of intangible assets for the three years ended December 31, 2024, 2023 and 2022 was $73 million,
$43 million and $42 million, respectively. The increased level of amortization of intangible assets in 2024, as
compared to 2023, was primarily related to the strategic write-off of approximately $37 million of certain trade
names in 2024, partially offset by the amortization expense associated with the intangible assets from the recent
acquisition of ITsavvy.
Refer to Note 6 - Acquisitions and Divestitures, and Note 12 - Goodwill, Net and Intangible Assets, Net in the
Consolidated Financial Statements for additional information regarding our intangible assets.
Worldwide Employment
Worldwide employment was approximately 16,800 as of December 31, 2024, a decrease of approximately 3,300
from December 31, 2023. The decrease primarily relates to the Company's Reinvention, which includes the effects
of workforce reduction decisions announced in January 2024, as well as net attrition (attrition net of gross hires).
Xerox 2024 Annual Report 44
Other Expenses, Net
Year Ended December 31,
(in millions)
2024
2023
2022
Non-financing interest expense
$
119
$
68
$
91
Interest income
(14)
(16)
(11)
Non-service retirement-related costs
80
19
(12)
Gains on sales of businesses and assets
(8)
(39)
(56)
Currency losses, net
15
28
13
(Gain) Loss on early extinguishment of debt
(2)
10
5
Transaction and related costs, net
(38)
—
—
Contract termination costs - product supply
—
—
33
Excess contribution refund
—
(6)
(16)
Tax indemnification from Conduent
—
(7)
—
All other expenses, net(1)
6
18
13
Other expenses, net
$
158
$
75
$
60
_____________
(1) Includes Equity income of $(7) million, $(4) million and $(3) million and Noncontrolling interest charge of $2 million, $3 million and $0 million
for the three years ended December 31, 2024, 2023 and 2022, respectively.
Non-Financing Interest Expense
Non-financing interest expense for the year ended December 31, 2024 of $119 million was $51 million higher than
2023. The increase was primarily due to higher interest rates on new Senior Notes issued in 2024, lower financing
debt, as well as a slightly higher average debt balance as a result of issuance of Senior Notes and promissory notes
in 2024. When non-financing interest expense is combined with financing interest expense (Cost of financing), total
interest expense of $225 million increased by $27 million from the prior year period, primarily reflecting the impact of
higher average interest rates.
Non-financing interest expense for the year ended December 31, 2023 of $68 million was $23 million lower than
2022. The decrease was related to lower average non-financing debt as a result of the repayment of Senior Notes
in 2022 and the first quarter 2023, partially offset by higher interest rates on new debt. When non-financing interest
expense is combined with financing interest expense (Cost of financing), total interest expense of $198 million
decreased by $1 million from the prior year period primarily reflecting a lower average debt balance, mostly offset by
the impact of higher average interest rates.
For the years ended December 31, 2024, 2023 and 2022, both Xerox Holdings and Xerox reported total interest
expense of $225 million, $198 million and $199 million, respectively, however, the amount reported by Xerox
includes interest expense of $111 million, $80 million and $80 million for the three years ended December 31, 2024,
2023 and 2022, respectively, paid to Xerox Holdings on an Intercompany Loan. The Intercompany Loan represents
a loan to Xerox of the net proceeds Xerox Holdings Corporation received from its Senior Notes, which was used to
repay existing debt of Xerox Corporation. Xerox's interest expense on the Intercompany Loan matches the interest
expense recognized by Xerox Holdings on its Senior Notes.
Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding the Xerox
Holdings Corporation/Xerox Corporation Intercompany Loan, our debt activity and information regarding the
allocation of interest expense.
Interest Income
Interest income for the year ended December 31, 2024 was $2 million lower than 2023, and for the year ended
December 31, 2023 was $5 million higher than 2022. The increase in interest income 2023 as compared to 2022
was due to higher interest rates, partially offset by a lower cash balance.
Non-Service Retirement-Related Costs
Non-service retirement-related costs increased $61 million for the year ended December 31, 2024 as compared to
2023. The increase primarily reflects higher interest cost associated with an increase in actuarial losses subject to
amortization, higher discount rates and a decrease in the expected return on plan assets, all of which were partially
offset by lower settlement losses.
Non-service retirement-related costs increased $31 million for the year ended December 31, 2023 as compared to
2022.The increase primarily reflects higher interest cost associated with higher discount rates as well as a decrease
in the expected return on plan assets, partially offset by lower settlement losses.
Xerox 2024 Annual Report 45
Service retirement-related costs, which are included in operating expenses, were $6 million, $6 million and $18
million for the years December 31, 2024, 2023 and 2022, respectively. The decrease in service-related costs for the
year ended December 31, 2023 as compared to 2022 was primarily due to the transition of our pension plan in the
Netherlands to a Defined Contribution Plan for future service at the end of 2022.
Refer to Note 18 - Employee Benefit Plans in the Consolidated Financial Statements for additional information
regarding service and non-service retirement-related costs.
Gains on Sales of Businesses and Assets
Gains on sales of businesses and assets for the year ended December 31, 2024 was $31 million lower than 2023,
and for the year ended December 31, 2023 was $17 million lower than 2022. The decrease in both years primarily
relates to lower sales of non-core surplus business assets in the current year, as compared to the prior year.
Currency Losses, Net
Currency losses, net of $15 million for the year ended December 31, 2024 were $13 million lower as compared to
2023 primarily due to the sale of our direct business operations in Argentina in 2024, as well as of the sale our
Russian subsidiary in 2023.
Currency losses, net of $28 million for the year ended December 31, 2023 were $15 million higher than 2022 due to
continued volatility in the global exchange rates, particularly in the Middle East and Argentina, which could not be
fully hedged, as well as an increase in the cost of hedging.
Refer to Note 16 - Financial Instruments in the Consolidated Financial Statements for additional information
regarding our foreign currency derivatives.
(Gain) Loss on Early Extinguishment of Debt
During 2024, we recorded a $(4) million (gain) on the repayment of Senior Notes (through a tender offer) in the first
quarter of 2024, partially offset by a loss of approximately $2 million on the write-off of deferred debt issuance costs.
During 2023, we recorded losses of $10 million on the extinguishment of debt related to the early repayment on
secured borrowings, the termination of our $250 million Credit Facility prior to entering into the new 5-year Asset
Based Lending Facility (ABL), and the write-off of deferred debt issuance costs associated with the early
extinguishment of the $555 million Bridge Loan Facility, that was replaced with the Term Loan B facility.
Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our Senior
Notes and Credit Facilities.
Transaction and related costs, net
2024 activity reflects the insurance proceeds related to a legal settlement, for the reimbursement of certain legal
and other professional costs, associated with a past potential merger.
Contract Termination Costs
For the year ended December 31, 2022, we recorded contract termination costs of $33 million ($25 million after-tax)
associated with the early termination of a product supply agreement. The charge primarily reflects the payment of
the contractual cancellation fee plus interest and related legal fees.
Excess Contribution Refund
During 2023 and 2022, we received a refund of $6 million and $16 million, respectively, reflecting the return of
excess employer contributions to a defined contribution plan for one of our Latin American subsidiaries as a result of
employee forfeitures. The excess contributions had accumulated over the past 20 plus years.
Refer to Note 18 - Employee Benefit Plans in the Consolidated Financial Statements for additional information
regarding our defined contribution plans.
Tax Indemnification - Conduent
The credit of $7 million for the year ended December 31, 2023 represents the reversal of a payable to Conduent of
an IRS refund Xerox was expected to receive with the settlement of a pre-separation unrecognized tax position. The
matter was resolved during the third quarter 2023 and both the receivable from the IRS and the payable to
Conduent were no longer required. The reversal of the offsetting IRS refund receivable is recorded as a charge in
Income tax benefit.
Xerox 2024 Annual Report 46
Pre-tax (Loss) Margin
Pre-tax (loss) margin for the year ended December 31, 2024 of (19.5)% increased 19.1-percentage points from the
pre-tax (loss) margin of (0.4)% in 2023. The increase in pre-tax (loss) margin was primarily due to the pre-tax non-
cash Goodwill impairment charge of $1,058 million, which was recorded during third quarter 2024. In addition, the
pre-tax (loss) margin also reflects lower revenues and associated gross profit, including the intentional reduction of
non-strategic revenue, the divestitures of certain direct business operations in Latin America, the exit of certain
production print manufacturing operations, as well as higher Amortization of intangible assets, and higher Other
expense, net. These impacts were partially offset by the PARC donation charge in 2023, as well as lower Selling,
administrative and general expenses, lower Restructuring and related costs, net, and lower RD&E expenses.
Pre-tax (loss) margin for the year ended December 31, 2023 of (0.4)% was a 4.2-percentage point improvement
from the pre-tax (loss) margin of (4.6)% in 2022. The improvement is primarily due to the Goodwill impairment
charge of $412 million in 2022. In addition, the improvement also reflects the impacts of lower supply chain-related
costs and the benefits of price increases and favorable mix as well as lower RD&E expenses and Selling,
administrative and general expenses. These favorable impacts were partially offset by lower revenue, which
includes the termination of Fuji royalty income, lost revenue associated with the donation of PARC and the
intentional reduction in non-strategic revenue. Pre-tax margin was also negatively impacted by the PARC donation
charge of $132 million in the second quarter 2023, which had a 1.9-percentage point adverse impact on pre-tax
margin, as well as higher Restructuring and related costs, net, which includes the workforce reduction announced in
connection with Reinvention, and Other expenses, net.
Adjusted1 operating margin for the year ended December 31, 2024 of 4.9% decreased 0.7-percentage points as
compared to 2023. The decrease primarily reflects lower revenue and lower gross profit, which reflected reductions
in non-strategic revenue and the effects of Reinvention actions, higher transportation and product costs, an
unfavorable equipment mix, and lower print volumes, as well as the termination of Fuji royalty income, and higher
bad debt expense. These impacts were partially offset by lower Selling, administrative and general expenses,
including lower incentive compensation expenses, and the benefits from Reinvention related cost and productivity
actions, benefits from the strategic decision to donate PARC in 2023, and the spin-off, exit, or shutdown of certain
other RD&E related activities or businesses.
Adjusted1 operating margin for the year ended December 31, 2023 of 5.6% increased 1.7-percentage points as
compared to 2022. The increase primarily reflects higher gross margin, which includes the impacts of lower supply
chain-related costs, the benefits of price increases and favorable mix. The increase also reflects lower RD&E
expense, and Selling, administrative and general expenses, which includes benefits associated with structural cost
reductions and ongoing operating efficiencies. Partially offsetting these benefits was lower revenue, which includes
the termination of Fuji royalty income, lost revenue associated with the donation of PARC, and the intentional
reduction in non-strategic revenue, as well as price increases from a product supplier, and higher Other expenses,
net.
_____________
(1) Refer to the Adjusted Operating Income and Margin reconciliation table in the "Non-GAAP Financial Measures" section.
Xerox 2024 Annual Report 47
Income Taxes
The 2024 effective tax rate was (8.6)%. Excluding the tax impacts for the goodwill impairment charge and the
establishment of a valuation allowance on certain deferred tax assets, the rate was 13.3%. This rate was lower than
the U.S. federal statutory tax rate of 21% primarily due to the geographical mix of earnings, partially offset by the tax
benefit associated with the redetermination of certain unrecognized tax positions. On an adjusted1 basis, the 2024
effective tax rate was 26.6%, which was higher than the U.S. federal statutory tax rate of 21% primarily due to the
geographical mix of adjusted earnings, partially offset by the redetermination of certain unrecognized tax positions.
The 2023 effective tax rate was 103.6% and includes the loss on the PARC donation as well as the associated tax
benefits. Excluding this impact, the effective tax rate was 10.6%. On an adjusted1 basis, the 2023 effective tax rate
was 14.6%. Both rates were lower than the U.S. federal statutory tax rate of 21% primarily due to the tax benefits
related to the redetermination of certain unrecognized tax positions upon the conclusion of several audits, as well as
the remeasurement of deferred tax assets and change in tax filing positions, partially offset by the geographical mix
of earnings.
The 2022 effective tax rate was 0.9% and was lower than the U.S. federal statutory tax rate of 21% primarily due to
the non-deductibility of the Goodwill impairment charge and the tax expense associated with changes in elections
made to certain tax positions for recently filed returns, which were only partially offset by benefits from additional tax
incentives and the geographical mix of earnings. On an adjusted1 basis, the 2022 effective tax rate was 21.6%.and
was higher than the U.S. federal statutory tax rate of 21% primarily due to tax expense associated with changes in
elections made to certain tax positions for recently filed returns, offset by benefits from additional tax incentives.
Xerox operations are widely dispersed. However, no one country outside of the U.S. is a significant factor in
determining our overall effective tax rate. Refer to Note 19 - Income and Other Taxes in the Consolidated Financial
Statements for additional information regarding the geographic mix of income before taxes and the related impacts
on our effective tax rate.
Our effective tax rate is based on nonrecurring events as well as recurring factors, including the taxation of foreign
income. In addition, our effective tax rate will change based on discrete or other nonrecurring events that may not
be predictable.
_____________
(1)
Refer to the Adjusted Effective Tax Rate reconciliation table in the "Non-GAAP Financial Measures" section.
Net (Loss) Income
Net (loss) for the year ended December 31, 2024 was $(1,321) million, or $(10.75) per diluted share, which included
the following:
•
After-tax Reinvention-related charge of $100 million ($129 million pre-tax), or $0.81 per diluted share, in first
quarter 2024, primarily related to the exit of certain production print manufacturing operations and geographic
simplification
•
After-tax non-cash goodwill impairment charge of $1,015 million ($1,058 million pre-tax), or $8.17 per share, in
third quarter 2024.
•
After-tax write-off of intangibles of $28 million ($37 million pre-tax), or $0.22 per share, in fourth quarter 2024.
•
After-tax Reinvention and transaction-related costs, net of $15 million ($19 million pre-tax), or $0.12 per share,
in fourth quarter 2024.
•
Tax expense charge of $161 million, or $1.30 per share, in third quarter 2024, related to the establishment of a
valuation allowance against certain deferred tax assets to reflect their realizability
On an adjusted1 basis, Net Income for the year ended December 31, 2024 was $135 million, or $0.97 per diluted
share.
Net income for the year ended December 31, 2023 was $1 million, or $(0.09) per diluted share, which included the
after-tax PARC donation charge of $92 million (pre-tax charge of $132 million) or $0.58 per diluted share, and after-
tax Restructuring and related costs, net charge of $78 million ($104 million pre-tax), or $0.52 per share, related to
the Reinvention-related workforce reduction. On an adjusted1 basis, Net income was $287 million, or $1.82 per
diluted share.
Net (loss) for the year ended December 31, 2022 was $(322) million, or $(2.15) per diluted share, which included an
after-tax Goodwill impairment charge of $395 million (pre-tax charge of $412 million) or $(2.54) per share. On an
adjusted1 basis, Net income was $189 million, or $1.12 per diluted share.
Refer to Note 25 - Loss per Share in the Consolidated Financial Statements, for additional information regarding the
calculation of basic and diluted loss per share.
_____________
(1)
Refer to the Adjusted Net Income and EPS reconciliation table in the "Non-GAAP Financial Measures" section.
Xerox 2024 Annual Report 48
Other Comprehensive Loss, Net
Other comprehensive loss, net was $23 million in 2024 and included the following: i) $120 million of net translation
adjustment losses reflecting the weakening of our major foreign currencies against the U.S. Dollar during 2024; ii)
$88 million of net gains from the changes in defined benefit plans primarily due to actuarial gains as a result of an
increase in discount rates, the amortization of actuarial losses partially offset by lower settlement expense as a
result of a change during 2024 to pension plans in the U.S. restricting the lump-sum election to 50% of a
participant's benefit obligation, as well as the positive impact of currency; and iii) $9 million in unrealized gains, net.
Other comprehensive loss, net was $139 million in 2023 and included the following: i) $331 million of net losses
from the changes in defined benefit plans primarily due to actuarial losses as a result of a decrease in discount
rates and lower asset returns as compared to expected returns, as well as the negative impact of currency, partially
offset by the amortization of actuarial losses and settlement losses; ii) $191 million of net translation adjustment
gains reflecting the strengthening of most of our major foreign currencies against the U.S. Dollar during 2023; and
iii) $1 million in unrealized gains, net.
Other comprehensive loss, net was $549 million in 2022 and included the following: i) $376 million of net translation
adjustment losses reflecting the weakening of our major foreign currencies against the U.S. Dollar during 2022; ii)
$171 million of net losses from the changes in defined benefit plans primarily due to actuarial losses as a result of
negative asset returns, partially offset by the positive impact of currency and the amortization of actuarial losses and
settlement losses; and iii) $2 million in unrealized losses, net.
Refer to our discussion of Pension Plan Assumptions in the Application of Critical Accounting Estimates section
of the MD&A as well as Note 18 - Employee Benefit Plans in the Consolidated Financial Statements for additional
information regarding changes in our defined benefit plans. Refer to Note 16 - Financial Instruments in the
Consolidated Financial Statements for additional information regarding our foreign currency derivatives and
associated unrealized gains and losses.
Recent Accounting Pronouncements
Refer to Note 2 - Recent Accounting Pronouncements and Summary of Significant Accounting Policies in the
Consolidated Financial Statements for a description of recent accounting pronouncements including the respective
dates of adoption and the effects on results of operations and financial conditions.
Xerox 2024 Annual Report 49
Reportable Segments
Our business is organized to ensure we focus on efficiently managing operations while serving our customers and
the markets in which we operate. We have two operating and reportable segments – Print and Other and Xerox
Financial Services (XFS).
Refer to Note 4 - Segment and Geographic Area Reporting in the Consolidated Financial Statements for additional
information regarding our reportable segments.
Segment Review
Year Ended December 31,
(in millions)
External
Revenue
Intersegment
Revenue(1)
Total Segment
Revenue
% of Total
Revenue
Segment
Costs and
Expenses
Segment
Profit
Segment
Margin(2)
2024
Print and Other
$
5,864
$
71
$
5,935
94 %
$
5,667
$
268
4.6 %
XFS
357
—
357
6 %
323
34
9.5 %
Total
$
6,221
$
71
$
6,292
100 %
$
5,990
$
302
4.9 %
2023
Print and Other
$
6,485
$
86
$
6,571
94 %
$
6,211
$
360
5.6 %
XFS
401
—
401
6 %
372
29
7.2 %
Total
$
6,886
$
86
$
6,972
100 %
$
6,583
$
389
5.6 %
2022
Print and Other
$
6,714
$
90
$
6,804
95 %
$
6,546
$
258
3.8 %
XFS
393
—
393
5 %
376
17
4.3 %
Total
$
7,107
$
90
$
7,197
100 %
$
6,922
$
275
3.9 %
_____________
(1)
Reflects revenue, primarily commissions and other payments, made by the XFS Segment to the Print and Other Segment for the lease of
Xerox equipment placements.
(2)
Segment margin based on external revenue only.
Print and Other
Print and Other includes the design, development and sale of document management systems, solutions and
services as well as associated technology offerings including Digital and IT services and software.
Revenue
Year Ended December 31,
% Change
(in millions)
2024
2023
2022
2024
2023
Equipment sales
$
1,360
$
1,634
$
1,602
(16.8)%
2.0%
Post sale revenue
4,504
4,851
5,112
(7.2)%
(5.1)%
Intersegment revenue (1)
71
86
90
(17.4)%
(4.4)%
Total Print and Other Revenue
$
5,935
$
6,571
$
6,804
(9.7)%
(3.4)%
_____________
(1)
Reflects revenue, primarily commissions and other payments, made by the XFS segment to the Print and Other segment for the lease of
Xerox equipment placements.
For the year ended December 31, 2024 Print and Other segment revenue decreased 9.7% as compared to 2023,
and for the year ended December 31, 2023 Print and Other segment revenue decreased 3.4% as compared to
2022.
Print and Other segment revenue results included the following:
Equipment Sales Revenue
•
For the year ended December 31, 2024, Equipment sales revenue decreased 16.8% as compared to 2023,
primarily impacted by unfavorable mix, as well as the effects of backlog fluctuations in the current and prior
year, the decision to stop certain manufacturing of high-end equipment, the effects of geographic simplification,
and the impacts of organizational changes implemented in the first half of 2024. Revenue declined across all
product groups, and was most pronounced in Mid-range, reflecting declines in both black-and-white and color
installations, with a mix toward lower-priced A3 color multi-function printers.
Xerox 2024 Annual Report 50
•
For the year ended December 31, 2023, Equipment sales revenue increased 2.0% as compared to 2022,
driven by improvement in product availability for higher-margin mid-range and high-end devices in the
Americas, as well as recent pricing actions and stable demand conditions, both of which were partially offset by
lower revenue from the Entry product group, primarily in EMEA, due to backlog reductions in the prior year.
Post Sale Revenue
•
For the year ended December 31, 2024, Post sale revenue decreased by 7.2% as compared to 2023.
Managed print services1 declined as compared to 2023, driven by lower outsourcing and print service revenue,
which includes the effects of geographic simplification. Post sales declines also resulted from lower sales of
non-strategic, lower margin IT endpoint device placements, rental revenue, and paper sales. These impacts
were partially offset by higher organic and inorganic IT Solutions revenue, including a partial quarter of ITsavvy
results, as well as higher digital services and supplies revenue.
•
For the year ended December 31, 2023, Post sale revenue decreased 5.1% as compared to 2022 due
primarily to lower sales of lower-margin, non-strategic paper and IT endpoint devices, as well as the
termination of Fuji royalty income and PARC revenue. Supplies, paper and other, and Contractual print
services revenue declined modestly as compared to the prior year period. The decline in Contractual print
services is mainly driven by lower production print activity, the exit from Russia and a shift in distribution
strategy for one of our European markets, partially offset by Digital and Managed IT Services revenue growth,
which includes the benefits of a recent acquisition. These declines were partially offset by price increases, as
well as gains and commissions, and servicing revenue on sales of finance receivables.
_____________
(1)
Previously known as contractual print services, and includes revenues from service, maintenance and rentals. IT solutions and digital
services are not included in managed print services.
Detail by product group is shown below:
Revenue
% Change
CC % Change
% of Equipment Revenue
(in millions)
2024
2023
2022
2024
2023
2024
2023
2024
2023
2022
Entry
$
214
$
237
$
280
(9.7)%
(15.4)%
(9.3)%
(15.9)%
16%
14%
17%
Mid-range
912
1,084
1,030
(15.9)%
5.2%
(15.7)%
5.1%
66%
66%
64%
High-end
232
316
295
(26.6)%
7.1%
(26.4)%
6.8%
17%
19%
18%
Other
20
18
19
11.1%
(5.3)%
11.1%
(5.3)%
1%
1%
1%
Equipment sales(1)(2)
$ 1,378
$ 1,655
$ 1,624
(16.7)%
1.9%
(16.5)%
1.7%
100%
100%
100%
_____________
CC - See "Currency Impact" section for description of constant currency.
(1)
Refer to the Products and Offerings Definitions section.
(2)
Includes equipment sales related to the XFS segment of $18 million, $21 million and $22 million for the three years ended December 31,
2024, 2023 and 2022, respectively.
The change at constant currency1 reflected the following:
Entry
•
For the year ended December 31, 2024, the decrease, as compared to 2023, primarily reflects higher backlog
reductions and installations of Entry printer, and Entry A4 color devices in the prior year, partially offset by
higher installations of Entry A4 black-and-white devices in the current year.
•
For the year ended December 31, 2023, the decrease, as compared to 2022, primarily reflects backlog
reductions in the prior year, and the normalization of work-from-home demand, offset by price increases.
Mid-range
•
For the year ended December 31, 2024, the decrease, as compared to 2023, reflects higher backlog
reductions in the prior year, as well as declines in both black-and-white and color installations, and higher mix
of lower-priced A3 color multi-function printers.
•
For the year ended December 31, 2023, the increase, as compared to 2022, reflects improved product
availability primarily in the Americas and price increases, partially offset by declines in EMEA due to backlog
reductions in the prior year.
High-end
•
For the year ended December 31, 2024, the decrease, as compared to 2023, was primarily due to higher
backlog reductions in the prior year, as well as an unfavorable mix toward black-and-white devices, as well as
lower High-end color installations, reflecting the evolution of our Production Print portfolio.
Xerox 2024 Annual Report 51
•
For the year ended December 31, 2023, the increase, as compared to 2022, was driven by revenue growth in
the Americas, as well as higher revenue and higher installs of both Entry Production Color devices and iGens,
due to improved product availability and benefits from price increases.
_____________
(1)
See "Currency Impact" section for description of constant currency.
Total Installs
Installs reflect new placements of devices only (i.e., measure does not take into account removal of devices which
may occur as a result of contract renewals or cancellations). Revenue associated with equipment installations may
be reflected up-front in Equipment sales or over time either through rental income or as part of our services
revenues (which are both reported within our Post sale revenues), depending on the terms and conditions of our
agreements with customers. Installs include activity for Xerox and non-Xerox branded products installed by our
XBS sales unit. Detail by product group (see Products and Offerings Definitions) is shown below.
Installs for the year ended December 31, 2024 were:
Entry
•
11% decrease in entry color installs driven by declines in entry color printers, as well as declines in A4 Color
MFPs.
•
2% decrease in entry black-and-white installs driven by declines in entry mono printers, partially offset by
higher installs of A4 mono MFPs.
Mid-Range
•
5% decrease in mid-range color installs, primarily reflecting declines in A3 color MFPs, as well as Entry
Production Color devices.
•
19% decrease in mid-range black-and-white installs, primarily driven by A3 mono MFPs, as well as light
production devices.
High-End
•
25% decrease in high-end color installs, primarily reflecting declines in Entry Production Color products.
•
15% decrease in high-end black-and-white installs, reflecting declines in Higher End Cut Sheet products.
Installs for the year ended December 31, 2023 were:
Entry1
•
37% decrease in entry color installs driven by declines in entry color printers and A4 Color MFPs, reflecting
backlog reductions in the prior year.
•
16% decrease in entry black-and-white installs driven by declines in A4 mono MFPs, primarily in EMEA, which
was partially offset by higher entry mono printer installs.
Mid-Range
•
Mid-range color installs were flat, reflecting higher light production installations offset by a slight decline in A3
color MFPs.
•
7% increase in mid-range black-and-white installs, driven by A3 mono MFPs, reflecting increased product
availability primarily in the Americas.
High-End
•
25% increase in high-end color installs reflecting higher demand for iGen and Versant products, primarily in the
Americas.
•
16% decrease in high-end black-and-white installs reflecting a market shift toward color production equipment.
_____________
(1)
Reflects install activity for total Entry product group.
Product and Offerings Definitions
Our product groups range from:
•
“Entry”, which include A4 devices and desktop printers and multifunction devices that primarily serve small
and medium workgroups/work teams.
•
“Mid-Range”, which include A3 devices that generally serve large workgroup/work teams environments as
well as products in the Light Production product groups serving centralized print centers, print for pay and
lower volume production print establishments.
•
“High-End”, which include production printing and publishing systems that generally serve the graphic
communications marketplace and print centers in large enterprises.
Xerox 2024 Annual Report 52
Segment Expenses
Print and Other Segment expenses included the following:
Research, Development and Engineering Expenses (RD&E)
•
RD&E of $191 million for the year ended December 31, 2024 decreased $38 million as compared to 2023. The
decrease was primarily due to productivity and cost savings related to the Company's Reinvention, the spin-off,
exit, or shutdown of certain other RD&E related activities or businesses, and the corresponding reduction in
real estate. The lower spending in innovation reflects decisions which provide greater focus and financial
flexibility to pursue growth opportunities adjacent to our core operations. The decrease also reflected the
strategic decision to donate PARC in 2023.
•
RD&E of $229 million for the year ended December 31, 2023, decreased $75 million as compared to 2022.
The decrease was primarily due to the strategic decision to donate PARC and the spin-off, exit, or shutdown of
certain other RD&E related activities or businesses. The lower spending in innovation reflects decisions which
provide greater focus and financial flexibility to pursue growth opportunities adjacent to our core operations
within Print, Digital and Managed IT services.
Selling, Administrative and General Expenses (SAG)
•
SAG expenses of $1,392 million for the year ended December 31, 2024 were $171 million lower than 2023,
primarily reflecting productivity and cost savings related to the Company's Reinvention, as well as lower
incentive compensation expense, IT expenses, outsourcing costs, commission payments, litigation expense,
and advertising costs, and the strategic decision to donate PARC in the prior year. These favorable impacts
were partially offset by higher bad debt expense, the inclusion of a partial quarter of ITsavvy results, and
unfavorable currency.
•
SAG expenses of $1,563 million for the year ended December 31, 2023 were $21 million lower than 2022
primarily reflecting the benefits from productivity and cost savings, including savings related to restructuring
actions, the strategic decision to donate PARC and other dispositions as well as a reduced investment in new
businesses. Additionally, the decrease in SAG also reflected lower supply chain-related costs, and the
favorable true-up of prior year shared services contract costs. These benefits were partially offset by higher
bad debt expense, incentive compensation expense and marketing expenses, and the impact of an
acquisition.
Segment Margin
Print and Other segment margin of 4.6% for the year ended December 31, 2024 decreased 1.0-percentage point
as compared to 2023. The decrease is primarily due to lower revenue, lower gross margin, and higher bad debt
expense. These adverse impacts were partially offset by lower Selling and other administrative and general
expenses, and lower RD&E expense, reflecting the benefits of cost and productivity savings.
Print and Other segment margin of 5.6% for the year ended December 31, 2023 increased 1.8-percentage points
as compared to 2022. The increase is primarily due to higher segment gross profit, which includes reduced RD&E,
lower selling expense, lower freight costs, as well as the benefits from pricing and cost and productivity actions.
These benefits were partially offset by lower revenue.
Xerox 2024 Annual Report 53
Xerox Financial Services (XFS)
XFS represents a global financing solutions business, primarily enabling the sale of our equipment and services.
Revenue
Year Ended December 31,
% Change
(in millions)
2024
2023
2022
2024
2023
Equipment sales
$
18
$
21
$
22
(14.3)%
(4.5)%
Financing
151
191
207
(20.9)%
(7.7)%
Other Post sale revenue(1)
188
189
164
(0.5)%
15.2%
Total XFS Revenue
$
357
$
401
$
393
(11.0)%
2.0%
_____________
(1)
Other Post sale revenue includes lease renewal and fee income as well as gains, commissions and servicing revenue associated with sold
finance receivables.
For the year ended December 31, 2024 XFS segment revenue decreased 11.0%, as compared to 2023, and for
the year ended December 31, 2023 increased 2.0%, as compared to 2022.
XFS Segment revenues included the following:
Financing Revenue is generated from direct and indirectly financed Xerox equipment sale transactions.
•
For the year ended December 31, 2024, Financing revenue decreased 20.9% as compared to 2023, including
no impact from currency. The decline reflects a continued reduction of the average finance receivables balance
in 2024, resulting from the sales to third parties during 2023 and 2024 to HPS Investment Partners (HPS) and
De Lage Landen Financial Services Canada Inc., as well as lower originations. Finance receivables are
approximately $800 million lower at December 31, 2024 as compared to December 31, 2023.
•
For the year ended December 31, 2023, Financing revenue decreased 7.7% as compared to 2022 as
compared to the prior year, including a 0.3-percentage point benefit from currency. The decline at constant
currency1 reflects a reduction of the average finance receivables balance during 2023 as a result of the sales
of finance receivables to HPS Investment Partners (HPS). Finance receivables were approximately $600
million lower in December of 2023 as compared to December of 2022.
Other Post sale revenue
•
For the year ended December 31, 2024, Other Post sale revenue decreased 0.5% as compared to 2023, as a
result of the continued reduction of our average finance receivables balance. Other Post sale revenue includes
gains, commissions and servicing revenue on sales of finance receivables under our finance receivables
funding agreement, which was $47 million for the year ended December 31, 2024, as compared to $34 million
for the year ended December 31, 2023.
•
For the year ended December 31, 2023, Other Post sale revenue increased 15.2% as compared to 2022,
primarily due to higher commissions and servicing revenue on increased sales of finance receivables under
our finance receivables funding agreement.
_____________
(1)
See "Currency Impact" section for description of constant currency.
Segment Expenses
XFS segment expenses included the following:
Selling, Administrative and General Expenses (SAG)
•
SAG expenses of $126 million for the year ended December 31, 2024 were $7 million lower than 2023,
primarily reflecting productivity and cost savings related to the Company's Reinvention, partially offset by
higher bad debt expense, which included an increased provision for aged accounts receivables in the current
year. Bad debt expense in 2024 included a credit of approximately $(8) million due to a reserve release
resulting in part from a lower finance receivables balance.
•
SAG expenses of $133 million for the year ended December 31, 2023 were $22 million lower than 2022,
primarily reflecting lower bad debt expense which included a credit of $(12) million related to a reserve release
in the U.S. as the result of a favorable reassessment of the credit exposure on a large customer receivable
balance after a contract amendment. SAG also benefited from productivity and cost savings, including savings
related to restructuring actions.
Xerox 2024 Annual Report 54
Segment Margin
XFS segment margin of 9.5% for the year ended December 31, 2024 increased 2.3-percentage points as
compared to 2023. Segment profit for XFS was $5 million higher as compared to the prior year period, primarily
due to lower Selling, administrative and general expenses, as well as higher servicing revenues. These positive
impacts were partially offset by lower financing revenue from reduced assets and a reserve release of $12 million
in the prior year.
XFS segment margin of 7.2% for the year ended December 31, 2023 increased 2.9-percentage points, as
compared to 2022. Segment profit for XFS was $12 million higher as compared to the prior year period primarily
due to higher revenues, lower bad debt expense, and a reduction in commissions paid to equipment suppliers
(primarily the Print and Other segment), partially offset by higher funding costs.
2025 Segment Reporting Update
In January 2025 we announced the creation of our IT Solutions business, which comprises our recent acquisition
of ITsavvy, as well as our Canadian IT Services business Powerland, and our legacy XBS IT sales businesses. We
expect to begin to provide additional information related to IT Solutions beginning with the first quarter 2025.
Accordingly, we will be reassessing our operating and reportable segments in the first quarter of 2025 and we
expect to provide a revision of our segment reporting then.
2024, 2023 and 2022 Segment Review
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable
Segment Disclosures, which requires among other things, the requirement to provide enhanced disclosures related
to significant segment expenses. Refer to Note 2 - Recent Accounting Pronouncements and Summary of
Significant Accounting Policies in our Consolidated Financial Statements for additional information regarding the
adoption of this ASU. The following table reflects the incremental disclosure requirements related to our adoption of
ASU 2023-07 for the following periods:
Three Months Ended
March 31, 2024
June 30, 2024
September 30, 2024
December 30, 2024
(in millions)
Print
and
Other
XFS
Total
Print
and
Other
XFS
Total
Print
and
Other
XFS
Total
Print
and
Other
XFS
Total
External revenue
$ 1,411
$ 91
$ 1,502
$ 1,489
$ 89
$ 1,578
$ 1,440
$ 88
$ 1,528
$ 1,524
$ 89
$ 1,613
Intersegment revenue(1)
19
—
19
19
—
19
17
—
17
16
—
16
Total Segment net
revenue
$ 1,430
$ 91
$ 1,521
$ 1,508
$ 89
$ 1,597
$ 1,457
$ 88
$ 1,545
$ 1,540
$ 89
$ 1,629
Reconciliation to Segment Profit
Cost of sales(2)
$ 319
$ 21
$ 340
$ 366
$ 19
$ 385
$ 371
$ 19
$ 390
$ 421
$ 18
$ 439
Cost of services,
maintenance and
rentals(2)
652
4
656
634
2
636
613
4
617
637
4
641
Cost of financing(3)
—
27
27
—
29
29
—
26
26
—
24
24
Research, development
and engineering
49
—
49
50
—
50
45
—
45
47
—
47
Selling, administrative
and general
expenses(4)(5)
358
39
397
358
35
393
344
26
370
332
26
358
Intersegment
expense(6)
19
—
19
19
—
19
17
—
17
16
—
16
Segment profit
$ 33
$ —
$ 33
$ 81
$
4
$ 85
$ 67
$ 13
$ 80
$ 87
$ 17
$ 104
Segment margin(7)
2.3 %
— %
2.2 %
5.4 %
4.5 %
5.4 %
4.7 %
14.8 %
5.2 %
5.7 %
19.1 %
6.4 %
Xerox 2024 Annual Report 55
Year Ended December 31,
2024
2023
2022
(in millions)
Print
and
Other
XFS
Total
Print
and
Other
XFS
Total
Print
and
Other
XFS
Total
External revenue
$ 5,864
$ 357
$ 6,221
$ 6,485
$ 401
$ 6,886
$ 6,714
$ 393
$ 7,107
Intersegment revenue(1)
71
—
71
86
—
86
90
—
90
Total Segment net revenue
$ 5,935
$ 357
$ 6,292
$ 6,571
$ 401
$ 6,972
$ 6,804
$ 393
$ 7,197
Reconciliation to Segment Profit
Cost of sales(2)
$ 1,477
$ 77
$ 1,554
$ 1,686
$ 92
$ 1,778
$ 1,906
$ 96
$ 2,002
Cost of services, maintenance and rentals(2)
2,536
14
2,550
2,647
17
2,664
2,662
17
2,679
Cost of financing(3)
—
106
106
—
130
130
—
108
108
Research, development and engineering expenses
191
—
191
229
—
229
304
—
304
Selling, administrative and general expenses(4)(5)
1,392
126
1,518
1,563
133
1,696
1,584
155
1,739
Intersegment expense(6)
71
—
71
86
—
86
$ 90
$ —
$ 90
Segment profit
$ 268
$ 34
$ 302
$ 360
$ 29
$ 389
$ 258
$ 17
$ 275
Segment margin(7)
4.6 %
9.5 %
4.9 %
5.6 %
7.2 %
5.6 %
3.8 %
4.3 %
3.9 %
_____________
(1)
Intersegment revenue is primarily commissions and other payments made by the XFS Segment to the Print and Other Segment for the
lease of Xerox equipment placements.
(2)
Cost of sales and Cost of services, maintenance and rentals for the Print and Other Segment excludes $8 and $43 from the reduction of
inventory and the cancellation of related purchase contracts as a result of the exit of certain production print manufacturing operations
during the year ended December 31, 2024.
(3)
Cost of financing is Interest expense associated with allocated debt of the Company, and is fully allocated to the XFS segment in support
of its Finance assets, while no interest expense is allocated to the Print and Other segment.
(4)
Includes bad debt expense for the Print and Other segment of $7 (Q124), $4 (Q224), $9 (Q324), and $5 (Q424), and bad debt expense for
the XFS segment of $8 (Q124), $6 (Q224), $1 (Q324), and $2 (Q424). For the three years ended December 31, 2024, 2023 and 2022 bad
debt expense for the Print and Other segment was $25, $22, and $17 respectively, and bad debt expense for the XFS segment was $17,
$6 and $26, respectively.
(5)
The Print and Other segment excludes $12 of Reinvention costs and $7 of Transaction and related costs, net for the year ended
December 31, 2024.
(6)
Intersegment expense is primarily origination fees and commissions made by the Print and Other Segment to the XFS Segment which
leases Xerox equipment to third parties.
(7)
Segment margin based on External revenue only.
Capital Resources and Liquidity
Our liquidity is primarily dependent on our ability to generate positive cash flows from operations. Additional
liquidity is also provided through access to the financial capital markets and a committed asset-based revolving
credit agreement (the ABL Facility), as well as through secured borrowings on our finance receivable balances and
the sales and assignment of finance lease receivables. Accordingly, we believe we have sufficient liquidity to
manage the business and settle obligations as they come due.
The following is a summary of our liquidity position:
•
As of December 31, 2024, total cash, cash equivalents and restricted cash were $631 million, and apart from
restricted cash of $55 million, were readily accessible for use.
•
Total debt at December 31, 2024 was $3,399 million of which $1,741 million is internally allocated to and
supports the Company's finance assets. The remaining debt of $1,658 million is attributable to the core
business. Debt consists of senior unsecured notes, secured borrowings through the securitization of finance
assets, and borrowings of $523 million under a Term Loan B credit facility (the TLB). Refer to Note 15 - Debt in
the Consolidated Financial Statements for additional details regarding our debt.
•
In March 2024, Xerox Holdings Corporation issued $500 million of 8.875% Senior Notes due in 2029, as well
as an aggregate $400 million of 3.75% Convertible Senior Notes due in 2030. In connection with the issuance
of the 2030 Notes, the Company entered into privately negotiated capped call transactions, with the option
counterparties, including certain of the initial purchasers of the 2030 Notes or their respective affiliates, at a
cost of approximately $23 million. A portion of the aggregate net proceeds was used to repay, through a tender
offer, approximately $84 million of the 3.80% Xerox Corporation Senior Notes due in 2024 and approximately
$362 million of the 5.00% Xerox Holdings Corporation Senior Notes due in 2025. The remaining outstanding
Xerox 2024 Annual Report 56
3.80% Senior Notes that were not redeemed as part of the Senior Notes tender offer were repaid in May 2024.
Approximately $388 million, which is the remaining portion of our 5.00% Senior Notes, is due in August 2025.
In November 2024, the Company issued two non-interest bearing, secured promissory notes (the 2025 Note
and the 2026 Note, or the Notes). Each of the Notes has a principal amount of $110 million. The total amount
recorded was $210 million, and was net of unamortized debt discount of $10 million. The 2025 Note has a
maturity date of October 8, 2025, and the 2026 Note has a maturity date of January 30, 2026.
•
In June 2024 we amended our ABL facility dated as of May 22, 2023, to (i) increase the commitments of the
lenders under the ABL Credit Agreement from $300 million to $425 million and (ii) amend the excess
availability used to trigger the fixed charge coverage ratio springing covenant from an amount equal to the
greater of (A) $22.5 and (B) 10% of the Line Cap (the lesser of the aggregate amount of Revolving
Commitments and the then-applicable Borrowing Base), to an amount equal to the greater of (x) $31.875
million and (y) 10% of the Line Cap. As of December 31, 2024, there were no borrowings under the ABL
Facility, and $2 million of letters of credits were issued under the facility. During 2024, maximum borrowings
under the ABL Facility were $130 million.
•
In January 2024, the Company entered into a new agreement with HPS Investment Partners (HPS) to transfer
servicing of the majority of funding activity to HPS as well as extend the existing term to five years. In October
2024, the Company entered into a finance receivables funding agreement with De Lage Landen Financial
Services Canada Inc. (DLL), pursuant to which the Company can offer for sale, and DLL may purchase, certain
eligible pools of finance receivables. We received proceeds of $752 million related to finance receivables sold
during 2024, which included sales of leases originated in prior years.
•
In December 2024, in connection with the Company's pending acquisition of Lexmark International II, LLC
(Lexmark), Xerox Corporation and Xerox Holdings Corporation obtained commitments for new debt financing
pursuant to (i) a commitment letter with certain Incremental Commitment Parties for approximately $357 million
in senior secured incremental term loan facility (the Incremental Facility), (ii) a commitment letter with senior
unsecured commitment parties to provide debt financing in the form of $250 million principal amount of senior
unsecured notes, and (iii) a debt commitment letter with Jefferies Finance LLC and Jefferies LLC (collectively,
Jefferies), pursuant to which Jefferies agreed to provide debt financing in the form of $250 million senior
unsecured notes (the SUNs), and a committed $550 million senior secured term loan facility. Xerox
Corporation and Xerox Holdings Corporation intend to use the majority of the proceeds from these
commitments (and/or an equivalent amount of debt securities issued in lieu thereof), together with cash on
hand and drawings under Xerox Corporation’s asset-backed revolving credit facility (as needed) to fund the
purchase price of Lexmark, and to refinance $388 million of Xerox Holdings Corporation’s 5.00% Senior Notes
due 2025.
•
We expect Operating cash flows to be between $420 million and $470 million in 2025. Capital expenditures are
expected to be approximately $70 million.
Refer to Note 6 – Acquisitions and Divestitures in the Consolidated Financial Statements for additional information
regarding our acquisition of ITsavvy and our pending acquisition of Lexmark, Note 8 – Finance Receivables, Net in
the Consolidated Financial Statements for additional information regarding the sale of finance receivables and
Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our debt activity.
Cash Flow Analysis
The following summarizes our cash flows for the three years ended December 31, 2024, 2023 and 2022, as
reported in our Consolidated Statements of Cash Flows in the accompanying Consolidated Financial Statements:
Year Ended December 31,
Change
(in millions)
2024
2023
2022
2024
2023
Net cash provided by operating activities
$
511
$
686
$
159
$
(175) $
527
Net cash used in investing activities
(198)
(5)
(78)
(193)
73
Net cash used in financing activities
(271)
(1,202)
(822)
931
(380)
Effect of exchange rate changes on cash, cash equivalents and
restricted cash
(28)
(1)
(29)
(27)
28
Increase (decrease) in cash, cash equivalents and restricted cash
14
(522)
(770)
536
248
Cash, cash equivalents and restricted cash at beginning of year
617
1,139
1,909
(522)
(770)
Cash, Cash Equivalents and Restricted Cash at End of Year
$
631
$
617
$
1,139
$
14
$
(522)
Xerox 2024 Annual Report 57
Cash Flows from Operating Activities
Net cash provided by operating activities was $511 million for the year ended December 31, 2024. The $175 million
decrease in operating cash from 2023 was primarily due to the following:
•
$101 million decrease in pre-tax income before depreciation and amortization, provisions, gains on sales of
businesses and assets, divestitures, PARC donation, stock-based compensation, goodwill impairment,
restructuring and related costs, net and non-service retirement-related costs.
•
$245 million decrease from inventory primarily due to higher purchases related to a change in contractual
terms with a large OEM vendor and decreased sales of equipment and supplies.
•
$126 million decrease from accrued compensation due to payments of higher year-end accruals.
•
$53 million decrease from higher restructuring and related payments.
•
$43 million decrease from higher pension contributions.
•
$242 million increase from accounts payable primarily due the timing of supplier and vendor payments.
•
$76 million increase from accounts receivable primarily due to lower revenues partially offset by timing of
collections.
•
$49 million increase from finance receivables primarily due to a higher level of run-off as a result of lower
originations, partially offset by lower sales of finance receivables under the finance receivables funding
agreement. Refer to Note 8 – Finance Receivables, Net in the Consolidated Financial Statements for additional
information regarding the sale of finance receivables.
•
$34 million increase due to lower placements of equipment on operating leases.
Net cash provided by operating activities was $686 million for the year ended December 31, 2023. The $527
million increase in operating cash from 2022 was primarily due to the following:
•
$116 million increase in pre-tax income before depreciation and amortization, provisions, gains on sales of
businesses and assets, PARC donation, stock-based compensation, goodwill impairment, restructuring and
related costs, net and non-service retirement-related costs.
•
$755 million increase from finance receivables reflecting the sale of approximately $1,100 million of finance
receivables under the finance receivables funding agreement in the current year as well as lower indirect
originations due to the change in XFS’s strategy to focus on leasing of Xerox equipment. These impacts were
partially offset by higher originations from increased equipment sales. Refer to Note 8 – Finance Receivables,
Net in the Consolidated Financial Statements for additional information regarding the sale of finance
receivables.
•
$266 million increase from inventory primarily due to the prior year increase in inventory as compared to
reductions in inventory in the current year reflecting increased sales of equipment and supplies.
•
$43 million increase from accounts receivable due to the lower quarterly revenues partially offset by the timing
of collections.
•
$22 million increase from lower contributions to our retirement plans mainly due to additional contributions to
our U.K. defined benefit pension plan not required in 2023.
•
$14 million increase from accrued compensation related to the year-over-year timing of payments.
•
$568 million decrease from accounts payable primarily due to the timing of supplier and vendor payments and
lower year-over-year spending.
•
$141 million decrease from other current and long-term liabilities mainly attributable to the timing of payments
of higher year-end accruals.
•
$29 million decrease from higher installs of equipment on operating leases.
Cash Flows from Investing Activities
Net cash used in investing activities for Xerox Holdings was $198 million for the year ended December 31, 2024.
The $193 million increase in the use of cash from 2023 was primarily due to the following:
•
$154 million increase from acquisitions.
•
Other investing, net of Xerox Holdings includes $19 million of noncontrolling investments as part of our
corporate venture capital fund for 2024 as compared to $5 million in the prior year.
Net cash used in investing activities was $5 million for the year ended December 31, 2023. The $73 million
decrease in the use of cash from 2022 was primarily due to lower acquisitions, capital expenditures and corporate
venture capital investments, partially offset by lower proceeds from the sale of surplus buildings and other assets.
Cash Flows from Financing Activities
Net cash used in financing activities for Xerox Holdings was $271 million for the year ended December 31, 2024.
The $931 million decrease in the use of cash from 2023 was due to the following:
Xerox 2024 Annual Report 58
•
$536 million decrease primarily due to the share repurchase from Icahn and Affiliated Parties in 2023.
•
$393 million decrease from net debt activity. 2024 reflects proceeds of $500 million on Senior Notes and $400
million on Convertible Senior Notes offset by net payments of $658 million on Senior Notes, deferred debt
issuance costs of $18 million from Senior Notes issuances, $282 million on secured financing arrangements
and $28 million on the Term Loan B facility. The $658 million of net payments on Senior Notes includes $300
million on Senior Notes that matured in May 2024 and $362 million for the early redemption of 2025 Senior
Notes offset by a gain on the extinguishment of debt of $4 million. 2023 reflects net proceeds of $524 million
from the Term Loan B facility, which is net of an original issue discount of $17 million and debt issuance costs
payments of $9 million, and net proceeds of $107 million and $52 million from the refinance of our French and
Canadian secured loans, respectively. These borrowings were offset by payments of $846 million on secured
financing arrangements, $300 million on Senior Notes and deferred debt issuance costs payments of $14
million on the ABL Facility and the bridge Loan Facility used to initially fund the Icahn share repurchase, which
was repaid in the 2023. The $846 million of payments on secured financing arrangements includes the early
repayments of $270 million for U.S. secured borrowings.
•
$24 million decrease from common stock dividends due to lower outstanding shares.
•
$23 million increase from purchases of capped calls.
Net cash used in financing activities for Xerox was $291 million for the year ended December 31, 2024. 2024
reflects proceeds of $500 million on Senior Notes and $400 million on Convertible Senior Notes offset by net
payments of $658 million on Senior Notes, deferred debt issuance costs of $18 million from Senior Notes
issuances, $282 million on secured financing arrangements and $28 million on the Term Loan B facility. The $658
million of net payments on Senior Notes includes $300 million on Senior Notes that matured in May 2024 and $362
million for the early redemption of 2025 Senior Notes offset by a gain on the extinguishment of debt of $4 million.
2023 reflects net proceeds of $524 million from the Term Loan B facility, which is net of an original issue discount of
$17 million and debt issuance costs payments of $9 million, and net proceeds of $107 million and $52 million from
the refinance of our French and Canadian secured loans, respectively. These borrowings were offset by payments
of $846 million on secured financing arrangements, $300 million on Senior Notes and deferred debt issuance costs
payments of $14 million on the ABL Facility and the bridge Loan Facility used to initially fund the Icahn share
repurchase, which was repaid in the fourth quarter 2023. The $846 million of payments on secured financing
arrangements includes the early repayments of $270 million for U.S. secured borrowings. Distributions to Xerox
Holdings were $202 million and were primarily used to fund Xerox Holdings continuing dividends to shareholders
and share repurchases. Xerox's distributions to the parent are expected to continue with those distributions
primarily being used by Xerox Holdings to fund dividends and share repurchases.
Net cash used in financing activities for Xerox Holdings was $1,202 million for the year ended December 31, 2023.
The $380 million increase in the use of cash from 2022 was primarily due to the following:
•
$431 million increase due to the share repurchase from Icahn and Affiliated Parties for $544 million in 2023
compared to $113 million of share repurchases in the prior year under the Company’s open-market share
repurchase program.
•
$51 million decrease from net debt activity. 2023 reflects net proceeds of $524 million from the Term Loan B
facility, which is net of an original issue discount of $17 million and debt issuance costs payments of $9 million,
and net proceeds of $107 million and $52 million from the refinance of our French and Canadian secured
loans, respectively. These borrowings were offset by payments of $846 million on secured financing
arrangements, $300 million on Senior Notes and deferred debt issuance costs payments of $14 million on the
ABL Facility and the bridge Loan Facility used to initially fund the Icahn share repurchase, which was repaid in
the fourth quarter 2023. The $846 million of payments on secured financing arrangements includes the early
repayments of $270 million for U.S. secured borrowings. 2022 reflects proceeds of $1,193 million on secured
financing arrangements offset by payments of $714 million, $300 million on maturing 2022 Senior Notes and
$703 million for the early partial redemption of 2023 Senior Notes, which includes a premium payment of $3
million.
Net cash used in financing activities for Xerox was $1,207 million for the year ended December 31, 2023. 2023
reflects net proceeds of $524 million from the Term Loan B facility, which is net of an original issue discount of $17
million and debt issuance costs payments of $9 million, and net proceeds of $107 million and $52 million from the
refinance of our French and Canadian secured loans, respectively. These borrowings were offset by payments of
$846 million on secured financing arrangements, $300 million on Senior Notes and deferred debt issuance costs
payments of $14 million on the ABL Facility and the bridge Loan Facility used to initially fund the Icahn share
repurchase, which was repaid in the fourth quarter 2023. The $846 million of payments on secured financing
arrangements includes the early repayments of $270 million for U.S. secured borrowings. 2022 reflects proceeds
Xerox 2024 Annual Report 59
of $1,193 million on secured financing arrangements offset by payments of $714 million, $300 million on maturing
2022 Senior Notes and $703 million for the early partial redemption of 2023 Senior Notes, which includes a
premium payment of $3 million. Distributions to Xerox Holdings were $722 million and were primarily used to fund
Xerox Holdings continuing dividends to shareholders and share repurchases. Xerox's distributions to the parent
are expected to continue with those distributions primarily being used by Xerox Holdings to fund dividends and
share repurchases.
Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding debt activity
and Note 22 – Shareholders’ Equity in the Consolidated Financial Statements for additional information regarding
the Icahn share repurchase.
Cash, Cash Equivalents and Restricted Cash
Refer to Note 14 - Supplementary Financial Information in the Consolidated Financial Statements for additional
information regarding restricted cash.
Operating Leases
We have operating leases for real estate and vehicles in our domestic and international operations and for certain
equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain
supply chain contracts for warehouses, primarily within our domestic operations. Our leases have remaining terms
of up to ten years and a variety of renewal and/or termination options. As of December 31, 2024 and 2023, total
operating lease liabilities were $188 million and $182 million, respectively.
Finance Leases
Xerox has finance leases for equipment in the U.S. and Europe, as well as for vehicles and related infrastructure,
within outsourced warehouse supply arrangements, in the U.S. These leases have remaining maturities up to five
years. As of December 31, 2024 and 2023, total finance lease liabilities were $53 million and $17 million,
respectively. The increase in finance leases since December 31, 2023 is primarily related to an agreement entered
into during the second half of 2024 to lease vehicles in the U.S.
Refer to Note 11 - Lessee in the Consolidated Financial Statements for additional information regarding our right-
of-use (ROU) assets and lease obligations associated with our operating and finance leases.
Debt and Customer Financing Activities
The following summarizes our total debt:
December 31,
(in millions)
2024
2023
Xerox Holdings Corporation
$
2,038
$
1,500
Xerox Corporation
1,343
1,450
Xerox - Other Subsidiaries(1)
70
361
Subtotal - Principal debt balance
3,451
3,311
Debt issuance costs
Xerox Holdings Corporation
(19)
(6)
Xerox Corporation
(11)
(12)
Xerox - Other Subsidiaries(1)
—
(1)
Subtotal - Debt issuance costs
(30)
(19)
Net unamortized (discount) premium
(22)
(15)
Total Debt
$
3,399
$
3,277
_____________
(1)
Represents secured debt issued by subsidiaries of Xerox Corporation as part of the securitization of finance receivables.
Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our debt
activity.
Xerox 2024 Annual Report 60
Finance Assets and Related Debt
We provide lease equipment financing to our customers. Our lease contracts permit customers to pay for
equipment over time rather than at the date of installation. Our investment in these contracts is reflected in total
finance assets, net. We primarily fund our customer financing activity through cash generated from operations,
cash on hand, sales and securitizations of finance receivables and proceeds from capital markets offerings.
We have arrangements, in certain international countries where third-party leasing companies or financial
institutions independently provide lease financing directly to our customers, on a non-recourse basis to Xerox. In
these arrangements, we sell and transfer title of the equipment to these entities. Generally, we have no continuing
ownership rights in the equipment subsequent to its sale; therefore, the unrelated third-party finance receivable
and debt are not included in our Consolidated Financial Statements.
The following represents our total finance assets, net associated with our lease and finance operations:
December 31,
(in millions)
2024
2023
Total finance receivables, net(1)
$
1,745
$
2,510
Equipment on operating leases, net
245
265
Total Finance assets, net (2)
$
1,990
$
2,775
____________
(1)
Includes (i) Billed portion of finance receivables, net, (ii) Finance receivables, net and (iii) Finance receivables due after one year, net as
included in our Consolidated Balance Sheets.
(2)
The change from December 31, 2023 includes an increase of $70 million due to currency.
Our lease contracts permit customers to pay for equipment over time rather than at the date of installation;
therefore, we maintain a certain level of debt (that we refer to as financing debt) to support our investment in these
lease contracts, which are reflected in Total finance receivables, net. For this financing aspect of our business, we
maintain an assumed 7:1 leverage ratio of debt to equity as compared to our finance assets. Approximately 45% of
our Total Finance assets, net balance at December 31, 2024 includes indirect lease financing primarily provided to
end-user customers who purchased Xerox and non-Xerox equipment sold through distributors, resellers and
dealers.
Based on this leverage, the following represents the breakdown of total debt between financing debt and core debt:
December 31,
(in millions)
2024
2023
Finance receivables debt(1)
$
1,527
$
2,196
Equipment on operating leases debt
214
232
Financing debt
1,741
2,428
Core debt
1,658
849
Total Debt
$
3,399
$
3,277
_____________
(1)
Finance receivables debt is the basis for our calculation of “Cost of financing” expense in the Consolidated Statements of (Loss) Income.
At December 31, 2024, leverage was assessed against the total debt of Xerox Holdings Corporation and Xerox
Corporation since the debt held by Xerox Holdings Corporation is guaranteed by Xerox Corporation and the funds
from that borrowing were contributed in full by Xerox Holdings Corporation to Xerox Corporation. In 2025, we
expect to continue leveraging our finance assets on a total debt basis at an assumed 7:1 ratio of debt to equity.
Sales of Finance Receivables
The Company has expanded the finance receivables funding agreement with an affiliate of HPS Investment
Partners (HPS) pursuant to which the Company agreed to offer for sale, and HPS agreed to purchase, certain
eligible pools of finance receivables, on a monthly basis, in transactions structured as "true sales at law," and
bankruptcy remote transfers. We have received an opinion to that effect from outside legal counsel. Accordingly,
the receivables sold are derecognized from our financial statements and HPS does not have recourse back to the
Company for uncollectible receivables. In addition, the agreement provides for the sale of the underlying leased
equipment to HPS, with a commission paid by HPS covering the value associated with the underlying equipment
being sold to HPS. The Company retains a first right of refusal to repurchase the underlying equipment at the end
of the lease term, to the extent offered for sale by HPS, at its then fair value.
In January 2024, we entered into a new agreement with HPS to transfer the servicing of the majority of funding
activity to HPS as well as extend the existing term to five years. This agreement automatically renews for a one-
year period unless terminated by either the Company or HPS. Xerox will be required to pay a specified fee to
Xerox 2024 Annual Report 61
service the Company’s retained receivables. Xerox will continue to service the lease receivables from prior
arrangements with HPS for a specified fee.
In October 2024, the Company entered into a finance receivables funding agreement with De Lage Landen
Financial Services Canada Inc. (DLL), pursuant to which the Company can offer for sale, and DLL may purchase,
certain eligible pools of finance receivables structured as “true sales at law” and bankruptcy remote transfers and
we have received an opinion to that effect from outside counsel.
This finance receivables funding agreement has an initial term of five years, with automatic one-year extensions
thereafter, unless terminated by either the Company or DLL. The Company will be paid a commission on lease
receivables sold and will continue to service the lease receivables under the finance receivables funding
agreement. If the portfolio performs above a certain level of incremental service, a fee can be earned annually.
Refer to Note 8 - Finance Receivables, Net in the Consolidated Financial Statements for additional information
regarding our sales of finance receivables.
Third Party Leasing Programs
In 2023, the Company entered into an agreement with PEAC Solutions (a subsidiary of HPS) that named PEAC as
the provider of certain leasing and financial services programs for Xerox and non-Xerox equipment sold through
our U.S. network of independent dealers and resellers. Our partnership with PEAC Solutions was further expanded
to include the transition of some XFS U.S. employees in risk, IT, and operations to PEAC Solutions. PEAC
Solutions is Xerox's preferred financing partner, primary funder, and service provider for XBS leases in the U.S.
Capital Market/Debt Activity
During 2024, we received proceeds of $900 million from the issuance of Senior Notes and Convertible Senior
Notes. We made net payments of $658 million on Senior Notes, including $300 million on Senior Notes that
matured in May 2024 and $362 million for the early redemption of 2025 Senior Notes offset by early redemption
premium of $4 million. In addition, we made payments of $18 million on deferred debt issuance costs from Senior
Notes issuances, $282 million on secured financing arrangements and $28 million on the Term Loan B facility.
Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our debt
activity, as well as our secured financing arrangements.
Financial Instruments
In September 2024, we entered into two floating-to-fixed interest rate swaps for $300 million to hedge against
interest rate volatility associated with any of our floating rate debt which was primarily under our Term Loan B
Credit Agreement (TLB). The TLB had an outstanding principal balance of $523 million as of December 31, 2024.
The remaining portion of the TLB of $223 million is not hedged, and is subject to interest rate fluctuations.
Refer to Note 16 - Financial Instruments in the Consolidated Financial Statements for additional information.
Share Repurchase Programs - Treasury Stock
There were no repurchases of Xerox Holdings Corporation's Common Stock for the year ended December 31,
2024.
On September 28, 2023, Xerox Holdings Corporation entered into a share purchase agreement with Carl C. Icahn
and certain of his affiliates pursuant to which the Company agreed to purchase an aggregate of approximately 34
million shares of the Company’s common stock for an aggregate purchase price of approximately $542 million,
exclusive of fees and expenses.
Refer to Note 22 - Shareholders' Equity in the Consolidated Financial Statements for additional information
regarding our share repurchases.
Dividends
Aggregate dividends of $128 million, $146 million, and $159 million were declared on common stock in 2024, 2023
and 2022, respectively. The decrease in dividends since 2022 primarily reflects lower shares of common stock
outstanding as a result of our share repurchase programs.
Aggregate dividends of $14 million were declared on preferred stock in 2024, 2023 and 2022, respectively.
In conjunction with this financing, the Xerox Board of Directors approved a change in the dividend policy to reduce
the Xerox annual dividend from $1 per share to 50 cents per share starting with the dividend expected to be
declared in the first quarter of 2025.
Xerox 2024 Annual Report 62
Liquidity and Financial Flexibility
We manage our worldwide liquidity using internal cash management practices, which are subject to (i) the statutes,
regulations and practices of each of the local jurisdictions in which we operate, (ii) the legal requirements of the
agreements to which we are a party and (iii) the policies and cooperation of the financial institutions we utilize to
maintain and provide cash management services. Our principal debt maturities are in line with historical and
projected cash flows and are spread over the next five years as follows:
(in millions)
Xerox Holdings
Corporation
Xerox Corporation
Xerox - Other
Subsidiaries(1)
Total
2025 - Q1
$
—
$
34
$
18
$
52
2025 - Q2
—
35
17
52
2025 - Q3
388
34
17
439
2025 - Q4
—
35
15
50
2026
—
151
3
154
2027
—
55
—
55
2028
750
55
—
805
2029
500
344
—
844
2030 and thereafter
400
600
—
1,000
Total
$
2,038
$
1,343
$
70
$
3,451
_____________
(1)
Represents subsidiaries of Xerox Corporation.
Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our debt.
Pension and Retiree Health Benefit Plans
We sponsor defined benefit pension plans and retiree health plans that require periodic cash contributions. Our
2024 cash contributions for these plans were $127 million for our defined benefit pension plans and $18 million for
our retiree health plans.
In 2025, based on current actuarial calculations, we expect to make contributions of approximately $140 million to
our worldwide defined benefit pension plans and $20 million to our retiree health benefit plans. Approximately $85
million of estimated contributions for 2024 are for our U.S. tax-qualified defined benefit plans. However, once the
next actuarial valuations and projected results are available, actual contributions required to meet minimum funding
requirements will be determined and finalized and may change from the current estimate. Contributions to our
defined benefit pension plans in subsequent years will depend on multiple factors, including the investment
performance of plan assets and discount rates as well as potential legislative and plan changes.
Although all of our major defined benefit plans have been amended to freeze current benefits and eliminate benefit
accruals for future service, several plans remain under-funded or unfunded by design. The projected benefit
obligations for these benefit plans at December 31, 2024 exceeded the fair value of the assets of those plans by
$1,067 million, which is a decrease of $123 million from the balance at December 31, 2023, of $1,190 million. The
decrease is largely due to increased discount rates and the resultant decrease in projected benefit obligations.
Cash contributions to our retiree health plans are made each year to cover medical premiums and claim costs
incurred during the year. Our retiree health benefit plans are unfunded and are primarily related to our U.S. and
Canada operations. The unfunded balance of our retiree health plans of $173 million at December 31, 2024
decreased by $20 million from the balance at December 31, 2023, primarily due to benefit payments as well as
increased discount rates.
Refer to Note 18 - Employee Benefit Plans in the Consolidated Financial Statements for additional information
regarding contributions to our defined benefit pension and retiree health plans.
FUJIFILM Business Innovation Corp.
We purchased products, including parts and supplies, from FUJIFILM Business Innovation Corp. totaling $886
million, $933 million, and $1,175 million in 2024, 2023 and 2022, respectively. Our product supply agreements with
FUJIFILM Business Innovation Corp. are designed to support the entire product lifecycle, end-to-end, including the
availability of spare parts, consumables and technical support throughout the time such products are with our
customers. Our purchase orders under such agreements are made in the normal course of business and typically
have a lead time of three months.
Xerox 2024 Annual Report 63
Shared Services and Technology Arrangements
In the third quarter 2024, Xerox entered into an agreement with HCL Technologies Limited (HCL), to renew and
extend the original shared services arrangement contract, entered into in 2019, in which HCL provides certain
global administrative and support functions to Xerox. In addition to the existing shared services arrangement, HCL
will support Xerox's Global Business Services (GBS) organization with professional services support, sales
efficiency, and remote problem-solving. Xerox can terminate the arrangement at any time starting in July 2025,
subject to payment of termination fees that decline over the term, or for cause.
In the second quarter 2024, Xerox entered into a seven year agreement with Tata Consulting Services (TCS), for
the purpose of consolidating Xerox’s technology services to improve business outcomes, migrate legacy data
centers to the cloud, deploy a cloud-based digital ERP platform to transform business processes, and incorporate
generative artificial intelligence (GenAI) into operations to help drive sustainable growth. The agreement expanded
Xerox's previous partnership entered into with TCS in 2021, under which TCS will continue to provide business
processing outsourcing services in support of our global finance and accounting organization; there were no
changes to the terms of the business processing outsourcing services agreement. Xerox can terminate the
arrangement with 90 days' notice, subject to payment of a termination fee.
In connection with the technology agreement with TCS, Xerox also entered into seven-year agreements with both
SAP Limited (SAP), who will provide Xerox with a cloud-based digital ERP platform, and Microsoft, who will provide
their Azure cloud platform services.
In the second quarter 2024, Xerox entered into a five-year agreement with Verizon Business Services (Verizon) to
provide their Network as a Service (NaaS) solutions framework as part of Xerox's Reinvention. Under the terms of
the agreement, Verizon will provide a secure network platform solution delivering network services to Xerox
business locations globally.
The approximate aggregate spending commitments related to these shared services and technology arrangements
are as follows:
(in millions)
December 31, 2024
Agreement Term
HCL(1)
$
550
5 Years
TCS(1)
460
7 Years
Microsoft
118
7 Years
SAP
51
7 Years
Verizon
97
5 Years
_____________
(1)
Represents all contractual arrangements between Xerox and the vendor.
We incurred net charges for these shared service and technology agreements of $259 million, $227 million and
$220 million for the three years ended December 31, 2024, 2023, and 2022, respectively. The costs have been
allocated to the various functional expense lines in the Consolidated Statements of (Loss) Income based on an
estimate of the nature and amount of the costs incurred for the various transferred functions.
Other Contingencies and Commitments
Refer to Note 20 - Contingencies and Litigation in the Consolidated Financial Statements for additional information
regarding our other contingencies and commitments.
Xerox 2024 Annual Report 64
Off-Balance Sheet Arrangements
We may occasionally utilize off-balance sheet arrangements in our operations (as defined by the SEC Financial
Reporting Release 67 (FRR-67), “Disclosure in Management’s Discussion and Analysis about Off-Balance Sheet
Arrangements and Aggregate Contractual Obligations”). We enter into the following arrangements that have off-
balance sheet elements:
•
We have a facility in Europe where we sell certain accounts receivables on a recurring basis. Refer to Note 7 -
Accounts Receivable, Net in the Consolidated Financial Statements for further information regarding accounts
receivable sales.
•
Since 2022, the Company has entered into Master Agreements for the sale and assignment of lease receivables
with two counterparties that establishes a committed sale and purchase facility pursuant to which the Company
agreed to offer for sale certain eligible pools of finance receivables relating to equipment leases on a monthly
basis in transactions intended to be true sales. For the three years ended December 31, 2024, 2023, and 2022,
the Company sold finance leases under these agreements, and received proceeds of $752 million, $1,102
million, and $60 million, respectively. We will continue to service a portion of those lease receivables, and we will
earn a servicing fee on a portion of those lease receivables serviced. Refer to Note 8 - Finance Receivables, Net
in the Consolidated Financial Statements for further information regarding this arrangement.
As of December 31, 2024, we do not believe we have any off-balance sheet arrangements that have, or are
reasonably likely to have, a material current or future effect on financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
In addition, refer to Note 20 - Contingencies and Litigation in the Consolidated Financial Statements for additional
information regarding contingencies, guarantees, indemnifications and warranty liabilities.
Xerox 2024 Annual Report 65
Non-GAAP Financial Measures
We have reported our financial results in accordance with generally accepted accounting principles (GAAP). In
addition, we have discussed our financial results using the non-GAAP measures described below. We believe these
non-GAAP measures allow investors to better understand the trends in our business and to better understand and
compare our results. Management regularly uses our supplemental non-GAAP financial measures internally to
understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are
among the primary factors management uses in planning for and forecasting future periods. Compensation of our
executives is based in part on the performance of our business based on these non-GAAP measures. Accordingly,
we believe it is necessary to adjust several reported amounts, determined in accordance with GAAP, to exclude the
effects of certain items as well as their related income tax effects.
However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the
Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant to
be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction
with our Consolidated Financial Statements prepared in accordance with GAAP.
Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures
calculated and presented in accordance with GAAP are set forth below.
Adjusted Earnings Measures
•
Adjusted Net Income and Earnings per share (Adjusted EPS)
•
Adjusted Effective Tax Rate
The above measures were adjusted for the following items:
Restructuring and related costs, net: Restructuring and related costs, net include restructuring and asset impairment
charges as well as costs associated with our transformation programs beyond those normally included in
restructuring and asset impairment charges. Restructuring consists of costs primarily related to severance and
benefits paid to employees pursuant to formal restructuring and workforce reduction plans. Asset impairment
includes costs incurred for those assets sold, abandoned or made obsolete as a result of our restructuring actions,
exiting from a business or other strategic business changes. Additional costs for our transformation programs are
primarily related to the implementation of strategic actions and initiatives and include third-party professional service
costs as well as one-time incremental costs. All of these costs can vary significantly in terms of amount and
frequency based on the nature of the actions as well as the changing needs of the business. Accordingly, due to that
significant variability, we will exclude these charges since we do not believe they provide meaningful insight into our
current or past operating performance nor do we believe they are reflective of our expected future operating
expenses as such charges are expected to yield future benefits and savings with respect to our operational
performance.
Amortization of intangible assets: The amortization of intangible assets is driven by our acquisition activity which can
vary in size, nature and timing as compared to other companies within our industry and from period to period. The
use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our
future period revenues as well. Amortization of intangible assets will recur in future periods.
Non-service retirement-related costs: Our defined benefit pension and retiree health costs include several elements
impacted by changes in plan assets and obligations that are primarily driven by changes in the debt and equity
markets as well as those that are predominantly legacy in nature and related to employees who are no longer
providing current service to the Company (e.g., retirees and ex-employees). These elements include (i) interest cost,
(ii) expected return on plan assets, (iii) amortization of prior plan amendments, (iv) amortized actuarial gains/losses
and (v) the impacts of any plan settlements/curtailments. Accordingly, we consider these elements of our periodic
retirement plan costs to be outside the operational performance of the business or legacy costs and not necessarily
indicative of current or future cash flow requirements. This approach is consistent with the classification of these
costs as non-operating in Other expenses, net. Adjusted earnings will continue to include the service cost elements
of our retirement costs, which is related to current employee service as well as the cost of our defined contribution
plans.
Transaction and related costs, net: Transaction and related costs, net are costs and expenses primarily associated
with certain major or significant strategic M&A projects. These costs are primarily for third-party legal, accounting,
consulting and other similar type professional services as well as potential legal settlements that may arise in
connection with those M&A transactions. These costs are considered incremental to our normal operating charges
and were incurred or are expected to be incurred solely as a result of the planned transactions. Accordingly, we are
Xerox 2024 Annual Report 66
excluding these expenses from our Adjusted Earnings Measures in order to evaluate our performance on a
comparable basis.
Discrete, unusual or infrequent items: We excluded the following items, when applicable, given their discrete,
unusual or infrequent nature and their impact on the comparability of our results for the current period to prior
periods:
•
Inventory impact related to the exit of certain production print manufacturing operations
•
Stock compensation expense associated with the accelerated vesting of all outstanding equity awards, according
to the terms of the award agreement, in connection with the passing of Xerox Holding's former CEO
•
Goodwill impairment loss
•
Divestitures
•
PARC donation
•
Reinvention-related costs
•
Contract termination costs - product supply
•
Tax Indemnification - Conduent
•
Gains and Losses on early extinguishment of debt
•
Deferred tax asset valuation allowance
Adjusted Operating Income and Margin
We calculate and utilize adjusted operating income and margin measures by adjusting our reported pre-tax (loss)
income and margin amounts. In addition to the costs and expenses noted above as adjustments for our adjusted
earnings measures, adjusted operating income and margin also exclude the remaining amounts included in Other
expenses, net, which are primarily non-financing interest expense and certain other non-operating costs and
expenses. We exclude these amounts in order to evaluate our current and past operating performance and to better
understand the expected future trends in our business.
Constant Currency (CC)
Refer to the Currency Impact section in the MD&A for a discussion of this measure and its use in our analysis of
revenue growth.
Xerox 2024 Annual Report 67
Adjusted Net Income and EPS Reconciliation
Year Ended December 31,
2024
2023
2022
(in millions, except per share amounts)
Net (Loss)
Income
EPS
Net (Loss)
Income
EPS
Net (Loss)
Income
EPS
Reported(1) (2)
$
(1,321) $
(10.75) $
1
$
(0.09) $
(322) $
(2.15)
Adjustments:
Inventory-related impact - exit of certain production
print manufacturing operations(3)
51
—
—
Accelerated share vesting
—
—
21
Goodwill impairment
1,058
—
412
Restructuring and related costs, net
112
167
65
Amortization of intangible assets
73
43
42
Divestitures
47
—
—
PARC donation
—
132
—
Non-service retirement-related costs
80
19
(12)
Reinvention-related costs
12
—
—
Transaction and related costs, net
(31)
—
—
Contract termination costs - product supply
—
—
33
Tax indemnification - Conduent
—
(7)
—
(Gain) Loss on early extinguishment of debt
(2)
10
5
Income tax on Goodwill impairment(4)
(43)
—
—
Income tax on PARC donation(4)
—
(40)
—
Deferred tax asset valuation allowance(4)
169
—
—
Income tax on adjustments(4)
(70)
(38)
(55)
Adjusted
$
135
$
0.97
$
287
$
1.82
$
189
$
1.12
Dividends on preferred stock used in adjusted EPS
calculation(3)
$
14
$
14
$
14
Weighted average shares for adjusted EPS(5)
126
151
157
Estimated fully diluted shares at December 31, 2024(6)
127
_____________
(1)
Net (Loss) income and EPS.
(2)
Full-year 2024 Pre-Tax (Loss) and Margin, and Diluted (Loss) per Share, include the following: Q1-24 $129 million pre-tax ($100 million after-
tax) Reinvention-related charge, or $0.81 per share, primarily related to the exit of certain Production Print manufacturing operations and
geographic simplification; Q3-24 pre-tax non-cash goodwill impairment charge of $1,058 million ($1,015 million after-tax), or $8.17 per share;
Q4-24 $37 million pre-tax ($28 million after-tax) write-off of intangibles, or $0.22 per share, and $19 million of pre-tax ($15 million after-tax)
Reinvention-related and acquisition charges, or $0.12 per share. Full year 2024 EPS also includes a Q3-24 tax expense charge of $161
million, or $1.30 per share, related to the establishment of a valuation allowance against certain deferred tax assets to reflect their
realizability. This adjustment was excluded due to its unique nature and significant impact which is not considered part of our core operations.
Full year 2023 includes a Q2-23 net pre-tax PARC donation charge of $132 million ($92 million after-tax), or $0.58 per share, and a Q4-23
$104 million pre-tax Restructuring and related costs, net charge ($78 million after-tax), or $0.52 per share, related to the Reinvention-related
workforce reduction.
(3)
Reflects the reduction of inventory of approximately $45 million and the cancellation of related purchase contracts of approximately $6 million,
as a result of the exit of certain production print manufacturing operations during the year ended December 31, 2024.
(4)
Refer to Adjusted Effective Tax Rate reconciliation.
(5)
For those periods that include the preferred stock dividend, the average shares for the calculations of diluted EPS exclude 7 million shares
associated with our Series A Convertible preferred stock.
(6)
Represents common shares outstanding at December 31, 2024, plus potential dilutive common shares used for the calculation of adjusted
diluted earnings per share for the year ended December 31, 2024. Excludes shares associated with our Series A convertible preferred stock,
which were anti-dilutive for the year ended December 31, 2024.
Xerox 2024 Annual Report 68
Adjusted Effective Tax Rate Reconciliation
Year Ended December 31,
2024
2023
2022
(in millions)
Pre-Tax
(Loss)
Income
Income Tax
Expense
Effective
Tax Rate
Pre-Tax
(Loss)
Income
Income Tax
(Benefit)
Expense
Effective
Tax Rate
Pre-Tax
(Loss)
Income
Income Tax
(Benefit)
Expense
Effective
Tax Rate
Reported(1)
$ (1,216) $
105
(8.6) %
$
(28) $
(29)
103.6 %
$
(325) $
(3)
0.9 %
Goodwill impairment(2)
1,058
43
—
—
412
17
PARC donation(2)
—
—
132
40
—
—
Deferred tax asset valuation
allowance
—
(169)
—
—
—
—
Non-GAAP Adjustments(2)
342
70
232
38
154
38
Adjusted(3)
$
184
$
49
26.6 %
$
336
$
49
14.6 %
$
241
$
52
21.6 %
_____________
(1)
Pre-tax Loss and Income tax expense (benefit).
(2)
Refer to Adjusted Net Income and EPS reconciliation for details.
(3)
The tax impact on Adjusted Pre-Tax Income is calculated under the same accounting principles applied to the Reported Pre-Tax Loss under
ASC 740, which employs an annual effective tax rate method to the results.
Adjusted Operating Income and Margin Reconciliation
Year Ended December 31,
2024
2023
2022
(in millions)
(Loss)
Profit
Revenue
Margin
Profit
(Loss)
Revenue
Margin
(Loss)
Profit
Revenue
Margin
Net (Loss) Income
$ (1,321) $ 6,221
$
1
$ 6,886
$
(322) $ 7,107
Adjustments:
Income tax expense (benefit)
105
$
—
(29) $
—
(3) $
—
Pre-tax (loss)
$ (1,216) $ 6,221
(19.5) %
$
(28) $ 6,886
(0.4) %
$
(325) $ 7,107
(4.6) %
Adjustments:
Inventory impact related to the exit
of certain Production Print
manufacturing operations(1)
51
—
—
Reinvention Costs
12
—
—
Accelerated share vesting
—
—
21
Goodwill impairment
1,058
—
412
Restructuring and related costs, net
112
167
65
Amortization of intangible assets
73
43
42
Divestitures
47
—
—
PARC donation
—
132
—
Transaction and related costs, net
7
—
—
Other expenses, net(2)(3)
158
75
60
Adjusted
$
302
$ 6,221
4.9 %
$
389
$ 6,886
5.6 %
$
275
$ 7,107
3.9 %
_____________
(1)
Reflects the reduction of inventory of approximately $45 million and the cancellation of related purchase contracts of approximately $6 million,
as a result of the exit of certain production print manufacturing operations during the year ended December 31, 2024.
(2)
Includes $38 million of insurance proceeds related to a legal settlement for the reimbursement of certain legal and other professional costs,
associated with a past potential merger, for the year ended December 31, 2024.
(3)
Includes non-service retirement-related costs.
Xerox 2024 Annual Report 69
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Financial Risk Management
We are exposed to market risk from changes in foreign currency exchange rates and interest rates, which could
affect operating results, financial position and cash flows. We manage our exposure to these market risks through
our regular operating and financing activities and, when appropriate, through the use of derivative financial
instruments. We utilized derivative financial instruments to hedge economic exposures, as well as reduce earnings
and cash flow volatility resulting from shifts in market rates.
Recent market events have not caused us to materially modify or change our financial risk management strategies
with respect to our exposures to interest rate and foreign currency risk. Refer to Note 16 - Financial Instruments in
the Consolidated Financial Statements for additional discussion on our financial risk management.
Foreign Exchange Risk Management
Assuming a 10% appreciation or depreciation in foreign currency exchange rates from the quoted foreign currency
exchange rates at December 31, 2024, it would not significantly change the value of foreign currency-denominated
assets and liabilities as all material currency asset and liability exposures were economically hedged as of
December 31, 2024. A 10% appreciation or depreciation of the U.S. Dollar against all currencies from the quoted
foreign currency exchange rates at December 31, 2024 would have an impact on our cumulative translation
adjustment portion of equity of approximately $233 million. The net amount invested in foreign subsidiaries and
affiliates, primarily Xerox Limited and Xerox Canada Inc. and translated into U.S. Dollars using the year-end
exchange rates, was approximately $2.3 billion at December 31, 2024.
Interest Rate Risk Management
The consolidated average interest rate associated with our total debt for 2024, 2023 and 2022 approximated 6.5%,
6.0%, and 5.3%, respectively. Interest expense includes the impact of our interest rate derivatives.
Nearly all of our customer-financing assets earn fixed rates of interest. The interest rates on a significant portion of
the Company's term debt are fixed.
As of December 31, 2024, of our total principal debt of $3,451 million, a total of $593 million of secured borrowings
carried variable interest rates, of which $523 million Term Loan B (TLB) has a variable interest rate based on SOFR
plus a spread, and the remaining $70 million, related to our securitizations, has a variable interest rate based on the
financial institution's cost of funds plus a spread.
The fair market values of our fixed-rate financial instruments are sensitive to changes in interest rates. At
December 31, 2024, a 10% increase in market interest rates would reduce the fair values of such financial
instruments by approximately $86 million.
The principal balance of our secured borrowings with a variable rate was $593 million as of December 31, 2024.
These variable rate secured borrowings have fixed interest rate caps and swaps with notional amounts of $377
million. As of December 31, 2024, $300 million include derivatives which were designated as cash flow hedges. Our
securitizations, which have a notional amount of $77 million, have associated interest rate caps that were
dedesignated as cash flow hedges during 2024.
A 10% change in the yield curve, representing approximately 50 basis points, will increase the derivative mark-to-
market by approximately $4 million.
Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our interest
expense and our secured borrowings and Note 16 - Financial Instruments in the Consolidated Financial Statements
for additional information regarding our interest rate caps and swaps.
Item 8. Financial Statements and Supplementary Data
Xerox 2024 Annual Report 70
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Xerox Holdings Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Xerox Holdings Corporation and its
subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of
(loss) income, of comprehensive loss, of shareholders' equity and of cash flows for each of the three years in the
period ended December 31, 2024, including the related notes and financial statement schedule listed in the index
appearing under Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). We also have
audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting
principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.
Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's
internal control over financial reporting based on our audits. We are a public accounting firm registered with the
Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
As described in Management’s Report on Internal Control over Financial Reporting, management has excluded
ITsavvy Acquisition Company, Inc. ("ITsavvy") from its assessment of internal control over financial reporting as of
December 31, 2024 because it was acquired by the Company in a purchase business combination during 2024. We
have also excluded ITsavvy from our audit of internal control over financial reporting. ITsavvy is a wholly-owned
subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal
control over financial reporting represented less than 1%, respectively, of the related consolidated financial
statement amounts as of and for the year ended December 31, 2024.
Xerox 2024 Annual Report 71
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i)
relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Goodwill Impairment Assessment - Print and Other Reporting Unit
As described in Notes 2 and 12 to the consolidated financial statements, the Company’s consolidated goodwill, net
balance was $1,937 million as of December 31, 2024, which is fully allocated to the Print and Other reporting unit.
Management assesses goodwill for impairment at least annually, and more frequently if indicators of impairment
exist. If the fair value exceeds the carrying value, goodwill is not considered impaired. If the carrying value exceeds
the fair value, goodwill is considered impaired, and management would recognize an impairment loss for the
excess. In a quantitative impairment test, management assesses goodwill by comparing the carrying amount of the
reporting unit to its fair value, and the fair value of the reporting unit is determined by using a weighted combination
of an income approach and a market approach. In the third quarter of 2024, management concluded that a
quantitative impairment test of goodwill was required. Based on that test, management determined that the
estimated fair value of the Print and Other reporting unit had declined below its carrying value and recognized an
after-tax non-cash impairment charge of $1,015 million ($1,058 million pre-tax) related to the Company’s goodwill.
As disclosed by management, the income approach is based on the discounted cash flow method that uses
management’s estimates of forecasted future financial performance including revenues, gross margins, operating
expenses, and taxes. Projected cash flows are then discounted to a present value employing a discount rate that
properly accounts for the estimated market weighted-average cost of capital, as well as any risks unique to the
subject cash flows.
The principal considerations for our determination that performing procedures relating to the goodwill impairment
assessment of the Print and Other reporting unit is a critical audit matter are (i) the significant judgment by
management when developing the fair value estimate of the Print and Other reporting unit; (ii) a high degree of
auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant
assumptions related to estimates of forecasted revenues, gross margins, operating expenses, and taxes, and the
discount rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to management’s goodwill impairment assessment, including controls over the fair value estimate
of the Print and Other reporting unit. These procedures also included, among others (i) testing management’s
process for developing the fair value estimate of the Print and Other reporting unit; (ii) evaluating the
appropriateness of the discounted cash flow method used by management; (iii) testing the completeness and
Xerox 2024 Annual Report 72
accuracy of underlying data used in the discounted cash flow method; and (iv) evaluating the reasonableness of the
significant assumptions used by management related to estimates of forecasted revenues, gross margins, operating
expenses, and taxes, and the discount rate. Evaluating management’s assumptions related to estimates of
forecasted revenues, gross margins, operating expenses, and taxes involved evaluating whether the assumptions
used by management were reasonable considering (i) the current and past performance of the Print and Other
reporting unit; (ii) the consistency with external market and industry data; and (iii) whether these assumptions were
consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge
were used to assist in evaluating (i) the appropriateness of the discounted cash flow method and (ii) the
reasonableness of the discount rate assumption.
/s/ PricewaterhouseCoopers LLP
Stamford, Connecticut
February 24, 2025
We have served as the Company’s or its predecessor's auditor since 2001.
Xerox 2024 Annual Report 73
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholder of Xerox Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Xerox Corporation and its subsidiaries (the
"Company") as of December 31, 2024 and 2023, and the related consolidated statements of (loss) income, of
comprehensive loss, of shareholder’s equity and of cash flows for each of the three years in the period ended
December 31, 2024, including the related notes and financial statement schedule listed in the index appearing
under Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). We also have audited the
Company's internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting
principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.
Our responsibility is to express opinions on the Company’s consolidated financial statements and on the
Company's internal control over financial reporting based on our audits. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are
free of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
As described in Management’s Report on Internal Control over Financial Reporting, management has excluded
ITsavvy Acquisition Company, Inc. ("ITsavvy") from its assessment of internal control over financial reporting as of
December 31, 2024 because it was acquired by the Company in a purchase business combination during 2024.
We have also excluded ITsavvy from our audit of internal control over financial reporting. ITsavvy is a wholly-owned
subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of
internal control over financial reporting represented less than 1%, respectively, of the related consolidated financial
statement amounts as of and for the year ended December 31, 2024.
Xerox 2024 Annual Report 74
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i)
relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Goodwill Impairment Assessment - Print and Other Reporting Unit
As described in Notes 2 and 12 to the consolidated financial statements, the Company’s consolidated goodwill, net
balance was $1,937 million as of December 31, 2024, which is fully allocated to the Print and Other reporting unit.
Management assesses goodwill for impairment at least annually, and more frequently if indicators of impairment
exist. If the fair value exceeds the carrying value, goodwill is not considered impaired. If the carrying value exceeds
the fair value, goodwill is considered impaired, and management would recognize an impairment loss for the
excess. In a quantitative impairment test, management assesses goodwill by comparing the carrying amount of the
reporting unit to its fair value, and the fair value of the reporting unit is determined by using a weighted combination
of an income approach and a market approach. In the third quarter of 2024, management concluded that a
quantitative impairment test of goodwill was required. Based on that test, management determined that the
estimated fair value of the Print and Other reporting unit had declined below its carrying value and recognized an
after-tax non-cash impairment charge of $1,015 million ($1,058 million pre-tax) related to the Company’s goodwill.
As disclosed by management, the income approach is based on the discounted cash flow method that uses
management’s estimates of forecasted future financial performance including revenues, gross margins, operating
expenses, and taxes. Projected cash flows are then discounted to a present value employing a discount rate that
properly accounts for the estimated market weighted-average cost of capital, as well as any risks unique to the
subject cash flows.
The principal considerations for our determination that performing procedures relating to the goodwill impairment
assessment of the Print and Other reporting unit is a critical audit matter are (i) the significant judgment by
management when developing the fair value estimate of the Print and Other reporting unit; (ii) a high degree of
auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant
assumptions related to estimates of forecasted revenues, gross margins, operating expenses, and taxes, and the
discount rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming
our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness
of controls relating to management’s goodwill impairment assessment, including controls over the fair value
estimate of the Print and Other reporting unit. These procedures also included, among others (i) testing
management’s process for developing the fair value estimate of the Print and Other reporting unit; (ii) evaluating
the appropriateness of the discounted cash flow method used by management; (iii) testing the completeness and
Xerox 2024 Annual Report 75
accuracy of underlying data used in the discounted cash flow method; and (iv) evaluating the reasonableness of
the significant assumptions used by management related to estimates of forecasted revenues, gross margins,
operating expenses, and taxes, and the discount rate. Evaluating management’s assumptions related to estimates
of forecasted revenues, gross margins, operating expenses, and taxes involved evaluating whether the
assumptions used by management were reasonable considering (i) the current and past performance of the Print
and Other reporting unit; (ii) the consistency with external market and industry data; and (iii) whether these
assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill
and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow method and
(ii) the reasonableness of the discount rate assumption.
/s/ PricewaterhouseCoopers LLP
Stamford, Connecticut
February 24, 2025
We have served as the Company’s auditor since 2001.
Xerox 2024 Annual Report 76
Xerox Holdings Corporation
Reports of Management
Management's Responsibility for Financial Statements
The management of Xerox Holdings Corporation is responsible for the integrity and objectivity of all information
presented in this annual report. The Consolidated Financial Statements were prepared in conformity with
accounting principles generally accepted in the United States of America and include amounts based on
management's best estimates and judgments. Management believes the Consolidated Financial Statements fairly
reflect the form and substance of transactions and that the financial statements fairly represent Xerox Holdings
Corporation's financial position and results of operations.
The Audit Committee of the Xerox Holdings Corporation Board of Directors, which is composed solely of
independent directors, meets regularly with the independent auditors, PricewaterhouseCoopers LLP, the internal
auditors and representatives of management to review accounting, financial reporting, internal control and audit
matters, as well as the nature and extent of the audit effort. The Audit Committee is responsible for the engagement
of the independent auditors. The independent auditors and internal auditors have free access to the Audit
Committee.
Management's Report on Internal Control Over Financial Reporting
The management of Xerox Holdings Corporation is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in the rules promulgated under the Securities Exchange Act
of 1934. Under the supervision and with the participation of our management, including our principal executive,
financial and accounting officers, we have conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework in “Internal Control - Integrated Framework (2013)” issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
Based on the above evaluation, management has concluded that our internal control over financial reporting was
effective as of December 31, 2024. The effectiveness of our internal control over financial reporting as of
December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public
accounting firm, as stated in their report, which is included herein.
/s/ STEVEN J. BANDROWCZAK
/s/ MIRLANDA GECAJ
/s/ WILLIAM TWOMEY
Chief Executive Officer
Chief Financial Officer
Chief Accounting Officer
Xerox 2024 Annual Report 77
Xerox Corporation
Reports of Management
Management's Responsibility for Financial Statements
The management of Xerox Corporation is responsible for the integrity and objectivity of all information presented in
this annual report. The Consolidated Financial Statements were prepared in conformity with accounting principles
generally accepted in the United States of America and include amounts based on management's best estimates
and judgments. Management believes the Consolidated Financial Statements fairly reflect the form and substance
of transactions and that the financial statements fairly represent Xerox Corporation's financial position and results of
operations.
The Audit Committee of the Xerox Holdings Corporation Board of Directors, which is composed solely of
independent directors, meets regularly with the independent auditors, PricewaterhouseCoopers LLP, the internal
auditors and representatives of management to review accounting, financial reporting, internal control and audit
matters, as well as the nature and extent of the audit effort. The Audit Committee is responsible for the engagement
of the independent auditors. The independent auditors and internal auditors have free access to the Audit
Committee.
Management's Report on Internal Control Over Financial Reporting
The management of Xerox Corporation is responsible for establishing and maintaining adequate internal control
over financial reporting, as such term is defined in the rules promulgated under the Securities Exchange Act of
1934. Under the supervision and with the participation of our management, including our principal executive,
financial and accounting officers, we have conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework in “Internal Control - Integrated Framework (2013)” issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
Based on the above evaluation, management has concluded that our internal control over financial reporting was
effective as of December 31, 2024. The effectiveness of our internal control over financial reporting as of
December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public
accounting firm, as stated in their report, which is included herein.
/s/ STEVEN J. BANDROWCZAK
/s/ MIRLANDA GECAJ
/s/ WILLIAM TWOMEY
Chief Executive Officer
Chief Financial Officer
Chief Accounting Officer
Xerox 2024 Annual Report 78
Xerox Holdings Corporation
Consolidated Statements of (Loss) Income
Year Ended December 31,
(in millions, except per-share data)
2024
2023
2022
Revenues
Sales
$
2,378
$
2,720
$
2,800
Services, maintenance and rentals
3,692
3,975
4,100
Financing
151
191
207
Total Revenues
6,221
6,886
7,107
Costs and Expenses
Cost of sales
1,562
1,778
2,002
Cost of services, maintenance and rentals
2,593
2,664
2,679
Cost of financing
106
130
108
Research, development and engineering expenses
191
229
304
Selling, administrative and general expenses
1,537
1,696
1,760
Goodwill impairment
1,058
—
412
Restructuring and related costs, net
112
167
65
Amortization of intangible assets
73
43
42
Divestitures
47
—
—
PARC donation
—
132
—
Other expenses, net
158
75
60
Total Costs and Expenses
7,437
6,914
7,432
Loss before Income Taxes
(1,216)
(28)
(325)
Income tax expense (benefit)
105
(29)
(3)
Net (Loss) Income
(1,321)
1
(322)
Less: Preferred stock dividends, net
(14)
(14)
(14)
Net Loss Attributable to Common Shareholders
$
(1,335) $
(13) $
(336)
Basic Loss per Share
$
(10.75) $
(0.09) $
(2.15)
Diluted Loss per Share
$
(10.75) $
(0.09) $
(2.15)
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 79
Xerox Holdings Corporation
Consolidated Statements of Comprehensive Loss
Year Ended December 31,
(in millions)
2024
2023
2022
Net (Loss) Income
$
(1,321) $
1
$
(322)
Other Comprehensive (Loss) Income, Net(1)
Translation adjustments, net
(120)
191
(376)
Unrealized gains (losses), net
9
1
(2)
Changes in defined benefit plans, net
88
(331)
(171)
Other Comprehensive Loss, Net
(23)
(139)
(549)
Comprehensive Loss, Net
$
(1,344) $
(138) $
(871)
_____________
(1)
Refer to Note 24 - Other Comprehensive Loss for gross components of Other Comprehensive Loss, reclassification adjustments out of
Accumulated Other Comprehensive Loss and related tax effects.
.
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 80
Xerox Holdings Corporation
Consolidated Balance Sheets
December 31,
(in millions, except share data in thousands)
2024
2023
Assets
Cash and cash equivalents
$
576
$
519
Accounts receivable (net of allowance of $69 and $64, respectively)
796
850
Billed portion of finance receivables (net of allowance of $2 and $4, respectively)
48
71
Finance receivables, net
608
842
Inventories
695
661
Other current assets
212
234
Total current assets
2,935
3,177
Finance receivables due after one year (net of allowance of $55 and $88, respectively)
1,089
1,597
Equipment on operating leases, net
245
265
Land, buildings and equipment, net
251
266
Intangible assets, net
236
177
Goodwill, net
1,937
2,747
Deferred tax assets
615
745
Other long-term assets
1,057
1,034
Total Assets
$
8,365
$
10,008
Liabilities and Equity
Short-term debt and current portion of long-term debt
$
585
$
567
Accounts payable
1,023
1,044
Accrued compensation and benefits costs
227
306
Accrued expenses and other current liabilities
784
862
Total current liabilities
2,619
2,779
Long-term debt
2,814
2,710
Pension and other benefit liabilities
1,088
1,216
Post-retirement medical benefits
154
171
Other long-term liabilities
386
360
Total Liabilities
7,061
7,236
Commitments and Contingencies (See Note 20)
Noncontrolling Interests (See Note 6)
10
10
Convertible Preferred Stock
214
214
Common stock
124
123
Additional paid-in capital
1,137
1,114
Retained earnings
3,514
4,977
Accumulated other comprehensive loss
(3,699)
(3,676)
Xerox Holdings shareholders’ equity
1,076
2,538
Noncontrolling interests
4
10
Total Equity
1,080
2,548
Total Liabilities and Equity
$
8,365
$
10,008
Shares of Common Stock Issued and Outstanding
124,435
123,144
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 81
Xerox Holdings Corporation
Consolidated Statements of Cash Flows
Year Ended December 31,
(in millions)
2024
2023
2022
Cash Flows from Operating Activities
Net (Loss) Income
$
(1,321) $
1
$
(322)
Adjustments required to reconcile Net (loss) income to Cash flows
provided by operating activities
Depreciation and amortization
274
251
270
Provisions
110
54
65
Deferred tax benefit
90
(68)
(27)
Net gain on sales of businesses and assets
(8)
(39)
(56)
Divestitures
47
—
—
PARC donation
—
132
—
Stock-based compensation
52
54
75
Goodwill impairment
1,058
—
412
Restructuring and asset impairment charges
87
146
62
Payments for restructurings
(78)
(27)
(52)
Non-service retirement-related costs
80
19
(12)
Contributions to retirement plans
(145)
(102)
(124)
Decrease (increase) in accounts receivable and billed portion of finance
receivables
71
(5)
(48)
(Increase) decrease in inventories
(122)
123
(143)
Increase in equipment on operating leases
(107)
(141)
(112)
Decrease (increase) in finance receivables
663
614
(141)
(Increase) decrease in other current and long-term assets
(14)
16
27
(Decrease) increase in accounts payable
(48)
(290)
278
(Decrease) increase in accrued compensation
(78)
48
34
(Decrease) increase in other current and long-term liabilities
(47)
(114)
9
Net change in income tax assets and liabilities
(50)
(12)
(27)
Net change in derivative assets and liabilities
10
13
(22)
Other operating, net
(13)
13
13
Net cash provided by operating activities
511
686
159
Cash Flows from Investing Activities
Cost of additions to land, buildings, equipment and software
(44)
(37)
(57)
Proceeds from sales of businesses and assets
35
43
87
Acquisitions, net of cash acquired
(161)
(7)
(93)
Other investing, net
(28)
(4)
(15)
Net cash used in investing activities
(198)
(5)
(78)
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt
907
1,396
1,194
Payments on long-term debt
(992)
(1,874)
(1,723)
Purchases of capped calls
(23)
—
—
Dividends
(141)
(165)
(174)
Payments to acquire treasury stock, including fees
(8)
(544)
(113)
Other financing, net
(14)
(15)
(6)
Net cash used in financing activities
(271)
(1,202)
(822)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(28)
(1)
(29)
Increase (decrease) in cash, cash equivalents and restricted cash
14
(522)
(770)
Cash, cash equivalents and restricted cash at beginning of year
617
1,139
1,909
Cash, Cash Equivalents and Restricted Cash at End of Year
$
631
$
617
$
1,139
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 82
Xerox Holdings Corporation
Consolidated Statements of Shareholders' Equity
(in millions)
Common
Stock(1)
Additional
Paid-in
Capital
Treasury
Stock
Retained
Earnings
AOCL(2)
Xerox
Holdings
Shareholders’
Equity
Non-
controlling
Interests
Total
Equity
Balance at December 31, 2021
$
168
$
1,802
$
(177) $
5,631
$ (2,988) $
4,436
$
7
$
4,443
Comprehensive loss, net
—
—
—
(322)
(549)
(871)
—
(871)
Cash dividends declared-common(3)
—
—
—
(159)
—
(159)
—
(159)
Cash dividends declared-preferred(4)
—
—
—
(14)
—
(14)
—
(14)
Stock option and incentive plans, net
2
62
—
—
—
64
—
64
Common stock repurchased
—
—
(113)
—
—
(113)
—
(113)
Cancellation of treasury stock
(14)
(276)
290
—
—
—
—
—
Transactions with noncontrolling
interests
—
—
—
—
—
—
4
4
Distributions to noncontrolling interests
—
—
—
—
—
—
(1)
(1)
Balance at December 31, 2022
$
156
$
1,588
$
—
$
5,136
$ (3,537) $
3,343
$
10
$
3,353
Comprehensive income (loss), net
—
—
—
1
(139)
(138)
—
(138)
Cash dividends declared-common(3)
—
—
—
(146)
—
(146)
—
(146)
Cash dividends declared-preferred(4)
—
—
—
(14)
—
(14)
—
(14)
Stock option and incentive plans, net
1
45
—
—
—
46
—
46
Common stock repurchased
—
—
(553)
—
—
(553)
—
(553)
Cancellation of treasury stock
(34)
(519)
553
—
—
—
—
—
Transactions with noncontrolling
interests
—
—
—
—
—
—
2
2
Distributions to noncontrolling interests
—
—
—
—
—
—
(2)
(2)
Balance at December 31, 2023
$
123
$
1,114
$
—
$
4,977
$ (3,676) $
2,538
$
10
$
2,548
Comprehensive loss, net
—
—
—
(1,321)
(23)
(1,344)
—
(1,344)
Cash dividends declared-common(3)
—
—
—
(128)
—
(128)
—
(128)
Cash dividends declared-preferred(4)
—
—
—
(14)
—
(14)
—
(14)
Purchases of capped calls(5)
—
(17)
—
—
—
(17)
—
(17)
Stock option and incentive plans, net
1
40
—
—
—
41
—
41
Transactions with noncontrolling
interests
—
—
—
—
—
—
(4)
(4)
Distributions to noncontrolling interests
—
—
—
—
—
—
(2)
(2)
Balance at December 31, 2024
$
124
$
1,137
$
—
$
3,514
$ (3,699) $
1,076
$
4
$
1,080
_____________
(1)
Common Stock has a par value of $1 per share.
(2)
AOCL - Accumulated other comprehensive loss.
(3)
Cash dividends declared on common stock for 2024, 2023 and 2022 were $0.25 per share on a quarterly basis and $1.00 per share on an
annual basis, respectively.
(4)
Cash dividends declared on preferred stock for 2024, 2023 and 2022 were $20 per share on a quarterly basis and $80 per share on an
annual basis, respectively.
(5)
The purchases of the capped calls resulted in a tax benefit of approximately $6. Refer to Note 15 - Debt for additional information related to
the purchases of capped calls in connection with the issuance of Xerox Holdings Corporation's $400 of 3.75% Convertible Senior Notes due
2030.
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 83
Xerox Corporation
Consolidated Statements of (Loss) Income
Year Ended December 31,
(in millions)
2024
2023
2022
Revenues
Sales
$
2,378
$
2,720
$
2,800
Services, maintenance and rentals
3,692
3,975
4,100
Financing
151
191
207
Total Revenues
6,221
6,886
7,107
Costs and Expenses
Cost of sales
1,562
1,778
2,002
Cost of services, maintenance and rentals
2,593
2,664
2,679
Cost of financing
106
130
108
Research, development and engineering expenses
191
229
304
Selling, administrative and general expenses
1,535
1,696
1,760
Goodwill impairment
1,058
—
412
Restructuring and related costs, net
112
167
65
Amortization of intangible assets
73
43
42
Divestitures
47
—
—
PARC donation
—
132
—
Other expenses, net
155
75
60
Total Costs and Expenses
7,432
6,914
7,432
Loss before Income Taxes
(1,211)
(28)
(325)
Income tax expense (benefit)
105
(29)
(3)
Net (Loss) Income
$
(1,316) $
1
$
(322)
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 84
Xerox Corporation
Consolidated Statements of Comprehensive Loss
Year Ended December 31,
(in millions)
2024
2023
2022
Net (Loss) Income
$
(1,316) $
1
$
(322)
Other Comprehensive (Loss) Income , Net(1)
Translation adjustments, net
(120)
191
(376)
Unrealized gains (losses), net
9
1
(2)
Changes in defined benefit plans, net
88
(331)
(171)
Other Comprehensive Loss, Net
(23)
(139)
(549)
Comprehensive Loss, Net
$
(1,339) $
(138) $
(871)
_____________
(1)
Refer to Note 24 - Other Comprehensive Loss for gross components of Other Comprehensive Loss, reclassification adjustments out of
Accumulated Other Comprehensive Loss and related tax effects.
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 85
Xerox Corporation
Consolidated Balance Sheets
December 31,
(in millions)
2024
2023
Assets
Cash and cash equivalents
$
575
$
519
Accounts receivable (net of allowance of $69 and $64, respectively)
796
850
Billed portion of finance receivables (net of allowance of $2 and $4, respectively)
48
71
Finance receivables, net
608
842
Inventories
695
661
Other current assets
212
234
Total current assets
2,934
3,177
Finance receivables due after one year (net of allowance of $55 and $88, respectively)
1,089
1,597
Equipment on operating leases, net
245
265
Land, buildings and equipment, net
251
266
Intangible assets, net
236
177
Goodwill, net
1,937
2,747
Deferred tax assets
615
745
Other long-term assets
1,017
1,008
Total Assets
$
8,324
$
9,982
Liabilities and Equity
Short-term debt and current portion of long-term debt
$
197
$
567
Short-term related party debt
388
—
Accounts payable
1,023
1,044
Accrued compensation and benefits costs
227
306
Accrued expenses and other current liabilities
741
820
Total current liabilities
2,576
2,737
Long-term debt
1,180
1,213
Long-term related party debt
1,634
1,497
Pension and other benefit liabilities
1,088
1,216
Post-retirement medical benefits
154
171
Other long-term liabilities
386
360
Total Liabilities
7,018
7,194
Commitments and Contingencies (See Note 20)
Noncontrolling Interests (See Note 6)
10
10
Additional paid-in capital
3,487
3,485
Retained earnings
1,504
2,959
Accumulated other comprehensive loss
(3,699)
(3,676)
Xerox shareholder's equity
1,292
2,768
Noncontrolling interests
4
10
Total Equity
1,296
2,778
Total Liabilities and Equity
$
8,324
$
9,982
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 86
Xerox Corporation
Consolidated Statements of Cash Flows
Year Ended December 31,
(in millions)
2024
2023
2022
Cash Flows from Operating Activities
Net (Loss) Income
$
(1,316) $
1
$
(322)
Adjustments required to reconcile Net (loss) income to Cash flows
provided by operating activities
Depreciation and amortization
274
251
270
Provisions
110
54
65
Deferred tax benefit
90
(68)
(27)
Net gain on sales of businesses and assets
(8)
(39)
(56)
Divestitures
47
—
—
PARC donation
—
132
—
Stock-based compensation
52
54
75
Goodwill impairment
1,058
—
412
Restructuring and asset impairment charges
87
146
62
Payments for restructurings
(78)
(27)
(52)
Non-service retirement-related costs
80
19
(12)
Contributions to retirement plans
(145)
(102)
(124)
Decrease (increase) in accounts receivable and billed portion of finance
receivables
71
(5)
(48)
(Increase) decrease in inventories
(122)
123
(143)
Increase in equipment on operating leases
(107)
(141)
(112)
Decrease (increase) in finance receivables
663
614
(141)
(Increase) decrease in other current and long-term assets
(19)
16
27
(Decrease) increase in accounts payable
(48)
(290)
278
(Decrease) increase in accrued compensation
(78)
48
34
(Decrease) increase in other current and long-term liabilities
(47)
(114)
9
Net change in income tax assets and liabilities
(50)
(12)
(27)
Net change in derivative assets and liabilities
10
13
(22)
Other operating, net
(13)
13
13
Net cash provided by operating activities
511
686
159
Cash Flows from Investing Activities
Cost of additions to land, buildings, equipment and software
(44)
(37)
(57)
Proceeds from sales of businesses and assets
35
43
87
Acquisitions, net of cash acquired
(161)
(7)
(93)
Other investing, net
(9)
1
(2)
Net cash used in investing activities
(179)
—
(65)
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt
907
1,396
1,194
Payments on long-term debt
(992)
(1,874)
(1,723)
Distributions to parent
(202)
(722)
(312)
Other financing, net
(4)
(7)
6
Net cash used in financing activities
(291)
(1,207)
(835)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(28)
(1)
(29)
Increase (decrease) in cash, cash equivalents and restricted cash
13
(522)
(770)
Cash, cash equivalents and restricted cash at beginning of year
617
1,139
1,909
Cash, Cash Equivalents and Restricted Cash at End of Year
$
630
$
617
$
1,139
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 87
Xerox Corporation
Consolidated Statements of Shareholder's Equity
(in millions)
Additional
Paid-in
Capital
Retained
Earnings
AOCL(1)
Xerox
Shareholder's
Equity
Non-
controlling
Interests
Total
Equity
Balance at December 31, 2021
$
3,202
$
4,476
$
(2,988) $
4,690
$
7
$
4,697
Comprehensive loss, net
—
(322)
(549)
(871)
—
(871)
Dividends declared to parent
—
(727)
—
(727)
—
(727)
Transfers from parent
491
—
—
491
—
491
Transactions with noncontrolling interests
—
—
—
—
4
4
Distributions to noncontrolling interests
—
—
—
—
(1)
(1)
Balance at December 31, 2022
$
3,693
$
3,427
$
(3,537) $
3,583
$
10
$
3,593
Comprehensive income (loss), net
—
1
(139)
(138)
—
(138)
Dividends declared to parent
—
(469)
—
(469)
—
(469)
Transfers to parent
(208)
—
—
(208)
—
(208)
Transactions with noncontrolling interests
—
—
—
—
2
2
Distributions to noncontrolling interests
—
—
—
—
(2)
(2)
Balance at December 31, 2023
$
3,485
$
2,959
$
(3,676) $
2,768
$
10
$
2,778
Comprehensive loss, net
—
(1,316)
(23)
(1,339)
—
(1,339)
Dividends declared to parent
—
(139)
—
(139)
—
(139)
Transfers from parent
2
—
—
2
—
2
Transactions with noncontrolling interests
—
—
—
—
(4)
(4)
Distributions to noncontrolling interests
—
—
—
—
(2)
(2)
Balance at December 31, 2024
$
3,487
$
1,504
$
(3,699) $
1,292
$
4
$
1,296
_____________
(1)
AOCL - Accumulated other comprehensive loss.
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 88
Xerox Holdings Corporation
Xerox Corporation
Notes to Consolidated Financial Statements
(in millions, except per-share data and where otherwise noted)
Note 1 – Basis of Presentation
References to “Xerox Holdings” refer to Xerox Holdings Corporation and its consolidated subsidiaries while
references to “Xerox” refer to Xerox Corporation and its consolidated subsidiaries or Xerox Holdings Corporation
and its consolidated subsidiaries, as determined by the context. References herein to “we,” “us,” “our,” and the
“Company” refer collectively to both Xerox Holdings and Xerox unless the context suggests otherwise. References
to “Xerox Holdings Corporation” refer to the stand-alone parent company and do not include its subsidiaries.
References to “Xerox Corporation” refer to the stand-alone company and do not include its subsidiaries.
The accompanying Consolidated Financial Statements and footnotes represent the respective consolidated results
and financial results of Xerox Holdings and Xerox and all respective companies that each registrant directly or
indirectly controls, either through majority ownership or otherwise. This is a combined report of Xerox Holdings and
Xerox, which includes separate Consolidated Financial Statements for each registrant.
The accompanying Consolidated Financial Statements of both Xerox Holdings and Xerox have been prepared in
accordance with accounting principles generally accepted in the United States of America (GAAP).
For convenience and ease of reference, we refer to the financial statement caption “Loss before Income Taxes” as
“pre-tax loss”.
Notes to the Consolidated Financial Statements reflect the activity for both Xerox Holdings and Xerox for all periods
presented, unless otherwise noted.
Description of Business
Currently, Xerox Holdings' primary direct operating subsidiary is Xerox and therefore Xerox represents nearly all of
Xerox Holdings' operations. Xerox is a global enterprise for workplace technology that integrates hardware, services
and software for large to small enterprises. As customers seek to manage information and document workflows
across digital and physical platforms, we deliver secure and sustainable document management solutions. We
provide advanced document technology, services, software for a range of customers including small and mid-sized
businesses, large enterprises, governments and graphic communications providers, and for our partners who serve
them. Xerox serves customers globally in North America, Latin America, Brazil, Europe, Eurasia, the Middle East,
Africa and India.
Xerox Holdings' other direct subsidiary, Xerox Ventures LLC, which was established solely to invest in startups and
early/mid-stage growth companies aligned with the Company’s innovation focus areas and targeted adjacencies. At
December 31, 2023 Xerox Ventures, LLC held investments of $26. In January 2024, Myriad Ventures Fund I LP
(Myriad) was established, and the investments held by Xerox Ventures LLC were transferred to Myriad, which will
continue to be fully consolidated by Xerox Holdings. The investments are normally equity or equity-linked and for
less than 20% ownership. Since the investments normally do not have readily determinable fair values, they are
accounted for under the measurement alternative per ASC Topic 321-10-35-2. At December 31, 2024, Myriad had
investments of $40.
Basis of Consolidation
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 (Loss) 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 (Loss) Income from the date such determination is made.
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
Xerox 2024 Annual Report 89
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 available information
including 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.
In the ordinary course of accounting for the items discussed above, we make changes in estimates as appropriate
and as we become aware of new or revised circumstances surrounding those estimates. Such changes and
refinements in estimation methodologies are reflected in reported results of operations in the period in which the
changes are made and, if material, their effects are disclosed in the Notes to the Consolidated Financial Statements
and in Management's Discussion and Analysis of Financial Condition and Results of Operations.
Note 2 – Recent Accounting Pronouncements and Summary of Significant Accounting
Policies
New Accounting Standards and Accounting Changes
Xerox Holdings and Xerox consider the applicability and impact of all Accounting Standards Updates (ASUs) issued
by the Financial Accounting Standards Board (FASB). The ASUs listed below apply to both registrants. Except for
the Accounting Standard Updates (ASUs) discussed below, the new ASUs issued by the FASB during the last two
years did not have any significant impact on the Company.
Accounting Standard Updates to be Adopted:
Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax
Disclosures, which includes amendments that further enhance income tax disclosures, primarily through
standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The
amendments are effective for the Company’s annual periods beginning January 1, 2025, with early adoption
permitted, and should be applied either prospectively or retrospectively. We are currently evaluating the impact of
the adoption of this standard to determine its impact on the Company's disclosures.
Income Statement
In November 2024, the FASB issued ASU 2024-03, Reporting Comprehensive Income—Expense Disaggregation
Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to improve
disclosures related to certain income statement expenses of the Company. This ASU is effective for fiscal years
beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with
early adoption permitted. We are currently evaluating the impact of the adoption of this standard to determine its
impact on the Company's disclosures.
Debt
In November 2024, the FASB issued ASU 2024-04, Debt with Conversion and Other Options (Subtopic 470-20):
Induced Conversions of Convertible Debt Instruments, which is intended to clarify requirements for determining
whether certain settlements of convertible debt instruments, including convertible debt instruments with cash
conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an
induced conversion. This ASU is effective for annual reporting periods beginning after December 15, 2025, and
interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently
evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.
Accounting Standard Updates Recently Adopted:
Reference Rate Reform
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of
Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying
U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London
Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. In January 2021, the
FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), Scope, which provided clarification to ASU
2020-04. These ASUs were effective commencing with our quarter ended March 31, 2020 through December 31,
2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848), Deferral of the
Sunset Date of Topic 848, which deferred the sunset date of Topic 848 from December 31, 2022, to December 31,
Xerox 2024 Annual Report 90
2024, after which entities will no longer be permitted to apply the relief in Topic 848. This ASU did not have an
impact on our financial condition, results of operations, and cash flows.
Segment Disclosures
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable
Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through
enhanced disclosures about significant expenses. The update requires public entities to disclose significant
segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within
segment profit and loss. The amendment was effective for the Company's annual periods beginning January 1,
2024, and interim periods beginning January 1, 2025, with early adoption permitted, and are applied retrospectively
to all prior periods presented in the financial statements. This ASU only requires additional disclosures, and did not
have an impact on the company’s financial condition, results of operations or cash flows. Refer to Note 4 - Segment
and Geographic Area Reporting for the required disclosures effective January 1, 2024.
Liabilities
In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50):
Disclosure of Supplier Finance Program Obligations that requires entities that use supplier finance programs in
connection with the purchase of goods and services to disclose the key terms of the programs and information
about obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The
guidance does not affect the recognition, measurement or financial statement presentation of supplier finance
program obligations. The new standard’s requirements to disclose the key terms of the programs and information
about obligations outstanding was effective for our fiscal year beginning on January 1, 2023. The new standard’s
requirement to disclose a rollforward of obligations outstanding was effective for our fiscal year beginning on
January 1, 2024. Refer to Note 14 - Supplementary Financial Information for the required disclosures.
Financial Instruments
In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326), Troubled Debt
Restructurings and Vintage Disclosures - Gross Write-offs. The amendments in this update eliminate the accounting
guidance for Troubled Debt Restructurings (TDRs) by creditors while enhancing disclosure requirements for certain
loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The
amendments also require disclosure of current-period gross write-offs by year of origination for financing
receivables. The disclosure of current-period gross write-offs by year of origination is applicable for financing
receivables and net investments in leases that are within the scope of ASC 326-20, Financial Instruments - Credit
Losses - Measured at Amortized Cost. This update was effective for our fiscal year beginning on January 1, 2023.
The provisions of this amendment are to be applied on a prospective basis. Refer to Note 8 - Finance Receivables,
Net for required disclosures regarding gross write-offs by vintage year.
Government Assistance
In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business
Entities about Government Assistance. The update increases the transparency surrounding government assistance
by requiring disclosure of 1) the types of assistance received, 2) an entity’s accounting for the assistance, and 3) the
effect of the assistance on the entity’s financial statements. We adopted this update effective for our fiscal year
beginning January 1, 2022. The impact of adoption was not material to our Consolidated Financial Statements.
Impacts on future periods will depend on the amounts of government assistance received. Prior to the COVID-19
pandemic, the amounts of government assistance the Company received were not material and since the update is
limited to increased disclosures, the adoption did not have a material impact on our financial condition, results of
operations, and cash flows.
Business Combinations
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract
Assets and Contract Liabilities from Contracts with Customers. The new guidance requires contract assets and
contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the
acquisition date in accordance with ASC Topic 606, Revenue from Contracts with Customers, as if the acquirer had
originated the contracts. This approach differs from the current requirement to measure contract assets and contract
liabilities acquired in a business combination at fair value. We early adopted this update effective for our fiscal year
beginning January 1, 2022. The adoption of this update did not have a material impact on the Company’s
consolidated financial statements and related disclosures. The standard did not impact contract assets or liabilities
acquired in business combinations that occurred prior to the adoption date.
Xerox 2024 Annual Report 91
Debt
In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20)
and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40). This update simplified the
accounting for convertible instruments by reducing the number of accounting models available for convertible debt
instruments and convertible preferred stock. This update also amended the guidance for the derivatives scope
exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and
required the application of the if-converted method for calculating diluted earnings per share. We adopted this
update effective for our fiscal year beginning January 1, 2022. The adoption of this update did not have a material
impact on the Company’s consolidated financial statements and related disclosures.
Other Updates
In 2024, 2023 and 2022 the FASB also issued the following ASUs, which could impact the Company in the future
but currently did not have, nor are expected to have, a material impact on our financial condition, results of
operations, cash flows or related disclosures upon adoption. Those updates are as follows:
•
Codification Improvements: ASU 2024-02, Codification Improvements - Amendments to Remove References
to the Concepts Statements. This update is effective for our fiscal year beginning after December 15, 2024.
•
Compensation - Stock Compensation: ASU 2024-01, Compensation - Stock Compensation (Topic 718) -
Scope Applications of Profits Interest and Similar Awards. This update is effective for the annual period
beginning after December 15, 2024, as well as interim periods within that period, with early adoption permitted.
•
Disclosure Improvements: ASU 2023-06, Codification Amendments in Response to the SEC’s Disclosure
Update and Simplification Initiative. Since the Company is already subject to SEC disclosure requirements, this
update was effective upon issuance.
•
Business Combinations: ASU 2023-05, Business Combinations - Joint Venture Formation (Topic 805-60):
Recognition and Initial Measurement. This update is effective for our fiscal year beginning January 1, 2025.
•
Liabilities: ASU 2023-04, Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff
Accounting Bulletin No. 121. The Company adopted this conforming guidance upon issuance in August 2023.
•
Investments: ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for
Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging
Issues Task Force). This update is effective for our fiscal year beginning January 1, 2024.
•
Leases: ASU 2023-01, Leases (Topic 842): Common Control Arrangements. This update is effective for our
fiscal year beginning January 1, 2024.
•
Fair Value Measurement: ASU 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of
Equity Securities Subject to Contractual Sale Restrictions. This update is effective for our fiscal year beginning
January 1, 2024.
•
Derivatives and Hedging: ASU 2022-01, Derivatives and Hedging (Topic 815), Fair Value Hedging - Portfolio
Layer Method. This update was effective for our fiscal year beginning January 1, 2023.
Summary of Accounting Policies
Revenue Recognition
We generate revenue through the sale of Print and IT hardware equipment and supplies and by providing
maintenance, managed Print, Digital and IT services. Revenue is measured based on the consideration specified in
a contract with a customer and is recognized when we satisfy a performance obligation by transferring control of a
product to a customer or in the period the customer benefits from the service. With the exception of our sales-type
lease arrangements, our invoices to the customer, which normally have short-term payment terms, are typically
aligned to the transfer of goods or as services are rendered to our customers and therefore in most cases, we
recognize revenue based on our right to invoice customers. As a result of the application of this practical expedient
for the substantial portion of our revenue, the disclosure of the value of unsatisfied performance obligations for our
services is not required.
Significant judgments primarily include the identification of performance obligations in our Document management
services arrangements as well as the pattern of delivery for those services.
More specifically, revenue related to our products and services is generally recognized as follows:
Equipment: Revenues from the sale of equipment directly to end-user customers, including those from sales-type
leases (see below), are recognized when obligations under the terms of a contract with our customer are satisfied
and control has been transferred to the customer. For equipment placements that require us to install the product at
Xerox 2024 Annual Report 92
the customer location, revenue is normally recognized when the equipment has been delivered and installed at the
customer location. Sales of customer installable products are recognized upon shipment or receipt by the customer
according to the customer's shipping terms. Revenue from the equipment performance obligation also includes
certain analyst training services performed in connection with the installation or delivery of the equipment. When
training is essential to the functionality of the related equipment the equipment revenue is recorded when the
obligation is satisfied.
Maintenance services: We provide maintenance agreements on our equipment that include service and supplies
for which the customer may pay a base minimum plus a price-per-page charge for usage. In arrangements that
include minimums, those minimums are normally set below the customer’s estimated page volumes and are not
considered substantive. These agreements are normally sold as part of a bundled lease arrangement or through
distributors and resellers. We account for these maintenance agreements as a single performance obligation for
maintenance services being delivered in a series with delivery being measured by usage as billed to the customer.
Accordingly, revenue on these types of agreements is normally recognized as billed to the customer over the term
of the agreements based on page volumes. Maintenance and support associated with our IT Solutions are recorded
as our performance obligations are satisfied. A substantial portion of our products are sold with full-service
maintenance agreements. Accordingly, other than the product warranty obligations associated with certain of our
entry level products, we do not have any significant warranty obligations, including any obligations under customer
satisfaction programs.
Service offerings: The Company’s primary service offerings include Managed Print Services, Digital Services and
IT Solutions. In our services arrangements, the Company typically satisfies the performance obligations and
recognizes revenue over time as the services are rendered. We generally account for these service arrangements
as single performance obligations since they primarily involve the delivery of an integrated service to the customer
with services being delivered in a series. Delivery is typically measured on an output basis such as usage and is
normally consistent with the billing or invoicing to the customer. Revenues on unit-price or time-based contracts are
recognized as work is completed to the customer.
Sales to distributors and resellers: We utilize distributors and resellers to sell our equipment, supplies, parts, and
maintenance services to end-user customers. We refer to our distributor and reseller network as our two-tier
distribution model. Revenues on sales to distributors and resellers are generally recognized when products are
shipped to such distributors and resellers. However, revenue is only recognized when the distributor or reseller has
economic substance apart from the Company such that collectability is probable and we have no further obligations
related to bringing about the resale, delivery or installation of the product that would impact transfer of control.
Revenues associated with maintenance agreements sold through distributors and resellers to end-user customers
are recognized in a consistent manner for maintenance services. Revenue that may be subject to a reversal of
revenue due to contractual terms or uncertainties is not recorded as revenue until the contractual provisions lapse
or the uncertainties are resolved.
Distributors and resellers participate in various rebate, price-protection, cooperative marketing and other programs.
We estimate the variable consideration associated with these programs and record those amounts as a reduction to
revenue when sales occur. Similarly, we account for our estimates of sales returns and other allowances when sales
occur based on our historical experience.
In certain instances, we may provide lease financing to end-user customers who purchased equipment we sold to
distributors or resellers. We are not obligated to provide financing and we compete with other third-party leasing
companies with respect to the lease financing provided to these end-user customers.
Software: Most of our equipment has both software and non-software components that function together to deliver
the equipment's essential functionality and therefore they are accounted for together as part of Equipment sales
revenues. Software accessories sold in connection with our Equipment sales, as well as free-standing software
sales, are accounted for as separate performance obligations if determined to be material in relation to the overall
arrangement, which is recognized as our obligations are fulfilled.
Supplies: Supplies revenue is recognized upon transfer of control to the customer, generally upon utilization or
shipment to the customer in accordance with the sales contract terms.
Financing: Finance income attributable to sales-type leases, direct financing leases and installment loans is
recognized on the accrual basis using the effective interest method.
Bundled Lease Arrangements: A portion of our direct sales of equipment to end-user customers are made
through bundled lease arrangements which typically include equipment, services (maintenance and managed
services) and financing components, where the customer pays a single negotiated fixed minimum monthly payment
for all elements over the contractual lease term. These arrangements also typically include an incremental, variable
Xerox 2024 Annual Report 93
component for page volumes in excess of the contractual page volume minimums, which are often expressed in
terms of price-per-image or page. Consistent with the guidance in ASC 842 and ASC 606, the transaction price is
allocated between the lease and non-lease deliverables based on standalone selling price (SSP). Lease
deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services,
which normally include supplies. With respect to the allocation of fixed and variable consideration, we only consider
the fixed payments for purposes of allocation to the lease elements of the contract.
The revenue associated with the lease element is typically recognized at a point-in-time upon transfer of control as
a sales-type lease, unless the lease is accounted for as an operating lease, which will normally result in recognition
over the term of the lease. The revenue associated with the non-lease elements are normally accounted for as a
single performance obligation being delivered in a series, with delivery being measured as the usage is billed to the
customer. Accordingly, revenue from these agreements is recognized in a manner consistent with the guidance for
Maintenance or Managed Print services agreements.
We establish SSP using observable inputs from standalone sales of products, as well as the prices established by
management in similar transactions. Based on historical sales practices and policies together with a periodic
analysis, we have determined that there is not a material difference between standalone selling price and recorded
sales price.
Leases: The two primary accounting provisions we use to classify transactions as sales-type or operating leases
are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying
equipment (defined as greater than 75%); and (ii) a review of the present value of the lease payments to determine
if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the
lease (defined as greater than 90%). Equipment placements included in arrangements meeting these conditions are
accounted for as sales-type leases and revenue is recognized in a manner consistent with Equipment sales.
Equipment placements included in arrangements that do not meet these conditions are accounted for as operating
leases and revenue is recognized over the term of the lease.
We consider the economic life of most of our products to be five years, since this represents the most frequent
contractual lease term for our principal products and only a small percentage of our leases are for original terms
longer than five years. There is no significant after-market for our used equipment. We believe five years is
representative of the period during which the equipment is expected to be economically usable, with normal service,
for the purpose for which it is intended.
Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement,
are developed based upon a variety of factors including local prevailing rates in the marketplace, cost of funds and
the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on
changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates
within the leases, as corroborated by our comparisons of cash to lease selling prices and other analyses as noted
above.
Additional Lease Payments: Certain leases may require the customer to pay property taxes and insurance on the
equipment. In these instances, the amounts for property taxes and insurance that we invoice to customers and pay
to third parties are considered variable payments and are recorded as other revenues and other cost of revenues,
respectively. Amounts related to property taxes and insurance are not material. We exclude from variable payments
all lessor costs that are explicitly required to be paid directly by a lessee on behalf of the lessor to a third party.
Other Revenue Recognition Policies
Revenue-based Taxes: Revenue-based taxes assessed by governmental authorities that are both imposed on and
concurrent with specific revenue-producing transactions, and that are collected by the Company from a customer,
are excluded from revenue. The primary revenue-based taxes are sales tax and value-added tax (VAT).
Shipping and Handling: Shipping and handling costs are accounted for as a fulfillment cost and are included in
Cost of sales in the Consolidated Statements of (Loss) Income .
Refer to Note 3 - Revenue for additional information regarding revenue recognition policies with respect to contract
assets and liabilities as well as contract costs.
Xerox 2024 Annual Report 94
Other Significant Accounting Policies
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, including money market funds, and investments with original
maturities of three months or less.
Allowance for Doubtful Accounts and Credit Losses
The allowance for doubtful accounts and provision for credit losses represents an estimate of the losses expected to
be incurred from the Company's trade and finance receivable portfolio. The measurement and recognition of
expected credit losses is based on an expected loss model and incorporates an assessment of past collection
experience as well as consideration of current and future economic conditions and changes in our customer
collection trends.
The allowance of finance receivables is determined on a collective basis by year of origination through the
application of projected loss rates to our different portfolios by country, which represent our portfolio segments. This
is the level at which we develop and document our methodology to determine the allowance for credit losses. These
projected loss rates are primarily based upon historical experience adjusted for judgments about the probable
effects of relevant observable data including current and future economic conditions as well as delinquency trends,
resolution rates, the aging of receivables, credit quality indicators and the financial health of specific customer
classes or groups.
The allowance for finance receivables is inherently more difficult to estimate than the allowance for trade accounts
receivable because the underlying lease portfolio has an average maturity, at any time, of approximately two to
three years and contains past due billed amounts, as well as unbilled amounts. We consider all available
information in our quarterly assessments of the adequacy of the allowance for doubtful accounts. We believe our
estimates, including any qualitative adjustments, are reasonable and have considered all reasonably available
information about past events, current conditions, and reasonable and supportable forecasts of future events and
economic conditions. The identification of account-specific exposure is not a significant factor in establishing the
allowance for doubtful finance receivables.
Receivable Sales and Securitization
The Company securitizes certain finance lease receivables by transferring them to Special Purpose Entities (SPEs)
that meet the definition of a Variable Interest Entity (VIE) and are consolidated into our financial statements. These
SPEs are bankruptcy-remote legal entities with separate assets and liabilities. The purpose of the SPEs is to
facilitate the funding of customer loan and lease payments and associated equipment in the capital markets. These
securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of
securitization. The receivables remain on the balance sheet and are classified as Finance receivables, net. The
Company continues to recognize finance income over the lives of these receivables.
We also transfer certain portions of our finance receivable portfolios to third parties and account for those transfers
of financial assets as sales when we have surrendered control over the related assets. Whether control has been
relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the
nature and extent of the Company’s continuing involvement with the assets transferred. Gains and losses stemming
from transfers reported as sales are normally included in revenue in the accompanying Statements of (Loss)
Income. Gains or losses on the sale of finance receivables depend, in part, on both (a) the cash proceeds and (b)
the net non-cash proceeds received or paid. Assets obtained and liabilities incurred in connection with transfers
reported as sales are initially recognized in the balance sheet at fair value. Refer to Note 8 – Finance Receivables,
Net for additional information on our finance receivable sales.
Inventories
Inventories are carried at the lower of average cost or net realizable value. Inventories also include equipment that
is returned at the end of the lease term. Returned equipment is recorded at the lower of remaining net book value or
salvage value, which is normally not significant. We regularly review inventory quantities and record a provision for
excess and/or obsolete inventory based primarily on our estimated forecast of product demand, production
requirements and servicing commitments. Several factors may influence the realizability of our inventories, including
our decision to exit a product line, technological changes and new product development. The provision for excess
and/or obsolete raw materials and equipment inventories is based primarily on near-term forecasts of product
demand and include consideration of new product introductions, as well as changes in remanufacturing strategies.
The provision for excess and/or obsolete service parts inventory is based primarily on projected servicing
requirements over the life of the related equipment populations. Refer to Note 9 - Inventories and Equipment on
Operating Leases, Net for further discussion.
Xerox 2024 Annual Report 95
Land, Buildings and Equipment on Operating Leases
Land, buildings and equipment are recorded at cost. Buildings and equipment are depreciated over their estimated
useful lives. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life.
Equipment on operating leases is depreciated to estimated salvage value over the lease term. Depreciation is
computed using the straight-line method. Significant leasehold improvements are capitalized, and maintenance and
repairs are expensed. Refer to Note 9 - Inventories and Equipment on Operating Leases, Net and Note 10 - Land,
Buildings, Equipment and Software, Net for further discussion.
Leased Assets
We determine at inception whether an arrangement is a lease. Our leases do not include assets of a specialized
nature, or the transfer of ownership at the end of the lease, and the exercise of end-of-lease purchase options,
which are primarily in our equipment leases, is not reasonably assured at lease inception. Accordingly, the two
primary criteria we use to classify transactions as operating leases or finance leases are: (i) a review of the lease
term to determine if it is equal to or greater than 75% of the economic life of the asset, and (ii) a review of the
present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair
market value of the asset at the inception of the lease. Right-of-use (ROU) assets represent our right to use an
underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising
from the lease. We also assess arrangements for goods or services to determine if the arrangement contains a
lease at its inception. This assessment first considers whether there is an implicitly or explicitly identified asset in the
arrangement and then whether there is a right to control the use of the asset. If there is an embedded lease within a
contract, the Company determines the classification of the lease at the lease inception date consistent with
standalone leases of assets.
Operating leases are included in Other long-term assets, Accrued expenses and other current liabilities, and Other
long-term liabilities in our Consolidated Balance Sheets. Finance leases are included in Land, buildings and
equipment, net, Accrued expenses and other current liabilities, and Other long-term liabilities in our Consolidated
Balance Sheets.
Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value
of lease payments over the lease term. Since the implicit rate for almost all of our leases is not readily determinable,
we use our incremental borrowing rate based on the information available at the commencement date in
determining the present value of lease payments. The incremental borrowing rate is the rate of interest that we
would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar
economic environment and over a similar term. The rate is dependent on several factors, including the lease term
and currency of the lease payments.
Lease terms used to calculate the present value of lease payments generally do not include any options to extend,
renew, or terminate the lease, as we do not have reasonable certainty at lease inception that these options will be
exercised. We generally consider the economic life of our operating lease ROU assets to be comparable to the
useful life of similar owned assets. We have elected the short-term lease exception, therefore operating lease ROU
assets and liabilities do not include leases with a lease term of twelve months or less. Our leases generally do not
provide a residual guarantee. The operating lease ROU asset also excludes lease incentives.
Lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease
and non-lease components. These components are accounted for separately for vehicle and equipment leases. We
account for the lease and non-lease components as a single lease component for real estate leases of offices and
warehouses.
We review the potential impairment of our ROU assets consistent with the approach applied for our other long-lived
assets. We review the recoverability of our long-lived assets when events or changes in circumstances occur that
indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is
based on our ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash
flows of the related operations. We have elected to include the carrying amount of operating lease liabilities in any
tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash
flows.
Software - Internal Use and Product
We capitalize direct costs associated with developing, purchasing or otherwise acquiring software for internal use
and amortize these costs on a straight-line basis over the expected useful life of the software, beginning when the
software is implemented (Internal Use Software). Costs incurred for upgrades and enhancements that will not result
Xerox 2024 Annual Report 96
in additional functionality are expensed as incurred. Amounts expended for Internal Use Software are included in
Cash Flows from Investing activities.
We also capitalize certain costs related to the development of software solutions to be sold to our customers upon
reaching technological feasibility (Product Software). These costs are amortized on a straight-line basis over the
estimated economic life of the software. Amounts expended for Product Software are included in Cash Flows from
Operations. We perform periodic reviews to ensure that unamortized Product Software costs remain recoverable
from estimated future operating profits (net realizable value or NRV). Costs to support or service licensed software
are charged to Costs of services as incurred. Refer to Note 10 - Land, Buildings, Equipment and Software, Net for
further information.
Goodwill and Other Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of acquired net assets in a business
combination, including the amount assigned to identifiable intangible assets. The primary drivers that generate
Goodwill are the value of synergies between the acquired entities and the company and the acquired assembled
workforce, neither of which qualifies as an identifiable intangible asset. Goodwill is not amortized, but rather is
tested for impairment annually, or more frequently whenever events or changes in circumstances indicate that the
carrying value of the asset may not be recoverable and an impairment loss may have been incurred.
We assess Goodwill for impairment at least annually, or more frequently if indicators of impairment exist or if a
decision is made to sell or exit a business. Impairment testing for Goodwill is done at the reporting unit level. A
reporting unit is an operating segment or one level below an operating segment (a component) if the component
constitutes a business for which discrete financial information is available, and segment management regularly
reviews the operating results of that component. Consistent with the determination that we had two operating/
reportable segments we determined that we had two reporting units – Print and Other, and XFS.
We perform an assessment of Goodwill, utilizing either a qualitative or quantitative impairment test. The qualitative
impairment test assesses several factors to determine whether it is more-likely-than-not that the fair value of the
reporting unit is less than its carrying amount. If we conclude it is more-likely-than-not that the fair value of the
reporting unit is less than its carrying amount, a quantitative fair value test is performed. In certain circumstances,
we may also bypass the qualitative test and proceed directly to a quantitative impairment test. In a quantitative
impairment test, we assess Goodwill by comparing the carrying amount of the reporting unit to its fair value. Fair
value of the reporting unit is determined by using a weighted combination of an income approach and a market
approach. If the fair value exceeds the carrying value, Goodwill is not considered impaired. If the carrying value
exceeds the fair value, Goodwill is considered impaired, and we would recognize an impairment loss for the excess.
Other intangible assets primarily consist of assets obtained in connection with business acquisitions, including
installed customer base and distribution network relationships, existing technology, trademarks and non-compete
agreements. We apply an impairment evaluation whenever events or changes in business circumstances indicate
that the carrying value of our intangible assets may not be recoverable. Other intangible assets are amortized on a
straight-line basis over their estimated economic lives. We believe that the straight-line method of amortization
reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of
economic benefits obtained annually by the Company. Refer to Note 12 - Goodwill, Net and Intangible Assets, Net
for further information.
Impairment of Long-Lived Assets
We review the recoverability of our long-lived assets, including buildings, equipment, right-of-use leased assets,
internal use software and other intangible assets, when events or changes in circumstances occur that indicate that
the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our
ability to recover the carrying value of the asset group from the expected future pre-tax cash flows (undiscounted
and without interest charges) of the related operations. If these cash flows are less than the carrying value of such
asset group, an impairment loss is recognized for the difference between estimated fair value and carrying value.
Our primary measure of fair value is based on discounted cash flows. Long-lived assets to be disposed of by sale
are reported at the lower of carrying amount or fair value less costs to sell. Long-lived assets to be disposed of other
than by sale (e.g., by abandonment, cease-use) would continue to be classified as held and used until the long-lived
asset is disposed of (e.g., abandoned or when the asset ceases to be used).
Refer to Note 13 - Restructuring Programs for additional information regarding the impairment of long-lived assets in
connection with our restructuring programs and initiatives.
Xerox 2024 Annual Report 97
Pension and Post-Retirement Benefit Obligations
We sponsor various forms of defined benefit pension plans in several countries covering employees who meet
eligibility requirements. Retiree health benefit plans cover a portion of our U.S. and Canadian employees for retiree
medical costs. We employ a delayed recognition feature in measuring the costs of pension and post-retirement
benefit plans. This requires changes in the benefit obligations and changes in the value of assets set aside to meet
those obligations to be recognized not as they occur, but systematically and gradually over subsequent periods. All
changes are ultimately recognized as components of net periodic benefit cost, except to the extent they may be
offset by subsequent changes. At any point, changes that have been identified and quantified but not recognized as
components of net periodic benefit cost are recognized in Accumulated other comprehensive loss, net of tax.
Several statistical and other factors that attempt to anticipate future events are used in calculating the expense,
liability and asset values related to our pension and retiree health benefit plans. These factors include assumptions
we make about the applicable discount rate, expected return on plan assets, cash balance interest-crediting rate,
rate of increase in healthcare costs, the rate of future compensation increases and mortality. Actual returns on plan
assets are not immediately recognized in our income statement due to the delayed recognition requirement. In
calculating the expected return on the plan asset component of our net periodic pension cost, we apply our estimate
of the long-term rate of return on the plan assets that support our pension obligations, after deducting assets that
are specifically allocated to Transitional Retirement Accounts (which are accounted for based on specific plan
terms).
For purposes of determining the expected return on plan assets, we utilize a market-related value approach in
determining the value of the pension plan assets, rather than a fair market value approach. The primary difference
between the two methods relates to systematic recognition of changes in fair value over time (generally two years)
versus immediate recognition of changes in fair value. Our expected rate of return on plan assets is applied to the
market-related asset value to determine the amount of the expected return on plan assets to be used in the
determination of the net periodic pension cost. The market-related value approach reduces the volatility in net
periodic pension cost that would result from using the fair market value approach.
The discount rate is used to determine the present value our future anticipated benefit obligations. The discount rate
reflects the current rate at which benefit liabilities could be effectively settled considering the timing of expected
payments for plan participants. In estimating our discount rate, we consider rates of return on high-quality fixed-
income investments adjusted to eliminate the effects of call provisions, as well as the expected timing of pension
and other benefit payments.
Each year, the difference between the actual return on plan assets and the expected return on plan assets, as well
as increases or decreases in the benefit obligation as a result of changes in the discount rate and other actuarial
assumptions, are added to or subtracted from any cumulative actuarial gain or loss from prior years. This amount is
the net actuarial gain or loss recognized in Accumulated other comprehensive loss. We amortize net actuarial gains
and losses as a component of net pension cost for a year if, as of the beginning of the year, that net gain or loss
(excluding asset gains or losses that have not been recognized in market-related value) exceeds 10% of the greater
of the projected benefit obligation or the market-related value of plan assets (the corridor method). This
determination is made on a plan-by-plan basis. If amortization is required for a particular plan, we amortize the
applicable net gain or loss in excess of the 10% threshold on a straight-line basis in net periodic pension cost over
the remaining service period of the employees participating in that pension plan. In plans where substantially all
participants are inactive, the amortization period for the excess is the average remaining life expectancy of the plan
participants.
Our primary domestic plans allow participants the option of settling their vested benefits through the receipt of a
lump-sum payment. The participant's vested benefit is considered fully settled upon payment of the lump sum. We
have elected to apply settlement accounting and therefore we recognize the losses associated with settlements in
this plan immediately upon the settlement of the vested benefits. Settlement accounting requires us to recognize a
pro rata portion of the aggregate unamortized net actuarial losses upon settlement. The pro rata factor is computed
as the percentage reduction in the projected benefit obligation due to the settlement of the participant's vested
benefit. During 2024, the US pension plans became subject to restrictions on the portion of the benefit (50)% that
can be paid as a lump sum. Since the portion of the benefit that cannot be paid as a lump sum is paid as an annuity,
the payment of 50% of the lump sum does not relieve the pension plans of the full obligation for benefits for each
respective participant electing a lump sum therefore, no settlement accounting was applied. These restrictions did
not apply for all of 2024 and there is settlement accounting for full lump sums paid early in 2024. Settlement
accounting will not apply in future years for which restrictions apply. Refer to Note 18 - Employee Benefit Plans for
further information regarding our Pension and Post-Retirement Benefit Obligations.
Xerox 2024 Annual Report 98
Research, Development and Engineering (RD&E)
Research, development and engineering costs are expensed as incurred. Sustaining engineering costs are incurred
with respect to on-going product improvements or environmental compliance after initial product launch. Sustaining
engineering costs were $49, $55 and $58 in for the years ended December 31, 2024, 2023 and 2022, respectively.
Foreign Currency Translation and Remeasurement
The functional currency for most of our foreign operations is the local currency. Net assets are translated at current
rates of exchange and income, expense and cash flow items are translated at average exchange rates for the
applicable period. The translation adjustments are recorded in Accumulated other comprehensive loss.
The U.S. Dollar is used as the functional currency for certain foreign subsidiaries that conduct their business in U.S.
Dollars as well as foreign subsidiaries operating in highly inflationary economies. For these subsidiaries, non-
monetary foreign currency assets and liabilities are translated using historical rates, while monetary assets and
liabilities are translated at current rates, with the U.S. dollar effects of rate changes recorded in Currency (gains)
and losses within Other expenses, net together with other foreign currency remeasurements.
Note 3 – Revenue
Revenues disaggregated by primary geographic markets, major product lines, and sales channels are as follows:
Year Ended December 31,
2024
2023
2022
Primary geographical markets(1)
United States
$
3,437
$
3,826
$
4,014
Europe
1,843
1,951
1,935
Canada
487
554
545
Other
454
555
613
Total Revenues
$
6,221
$
6,886
$
7,107
Major product and services lines
Equipment
$
1,378
$
1,655
$
1,624
Supplies, paper and other sales(2)
1,000
1,065
1,176
Maintenance agreements(3)
1,516
1,631
1,730
Service arrangements(4)
1,853
1,984
1,953
Rental and other
323
360
417
Financing
151
191
207
Total Revenues
$
6,221
$
6,886
$
7,107
Sales channels:
Direct equipment lease(5)
$
706
$
920
$
708
Distributors & resellers(6)
973
1,044
1,222
Customer direct
699
756
870
Total Sales
$
2,378
$
2,720
$
2,800
_____________
(1)
Geographic area data is based upon the location of the subsidiary reporting the revenue.
(2)
Other sales include revenues associated with hardware and software from our IT Solutions.
(3)
Includes revenues from maintenance agreements on sold equipment as well as revenues associated with service agreements sold through
our channel partners, as well as services revenues related to our IT Solutions.
(4)
Primarily includes revenues from our Print outsourcing arrangements including revenues from embedded operating leases in those
arrangements.
(5)
Primarily reflects sales through bundled lease arrangements.
(6)
Primarily reflects sales through our two-tier distribution channels.
Contract assets and liabilities: We normally do not have contract assets, which are primarily unbilled accounts
receivable that are conditional on something other than the passage of time. Our contract liabilities, which represent
billings in excess of revenue recognized, are primarily related to advanced billings for maintenance and other
services to be performed and were approximately $130 and $132 at December 31, 2024 and 2023, respectively.
The majority of the balance at December 31, 2024 will be amortized to revenue over approximately the next 30
months.
Xerox 2024 Annual Report 99
Contract Costs:
We incur the following contract costs as part of our revenue arrangements:
•
Incremental direct costs of obtaining a contract are primarily sales commissions paid to salespeople and agents
in connection with the placement of equipment with post sale services arrangements. These costs are deferred
and amortized to Selling Expenses on a straight-line basis over the estimated contract term, which is currently
estimated to be approximately four years.
•
Contract fulfillment costs are costs incurred for resources and assets that will be used to satisfy our future
performance obligations included in our service arrangements. These costs are amortized over the contractual
service period of the arrangement to cost of services.
•
Contract inducements are capitalized and amortized as a reduction of revenue over the term of the contract.
Changes in contract costs, net are as follows:
2024
2023
2022
Balance at January 1st,
$
136
$
135
$
147
Customer contract costs deferred
69
70
65
Amortization of customer contract costs
(64)
(69)
(73)
Other(1)
(3)
—
(4)
Balance at December 31st,
$
138
$
136
$
135
_____________
(1)
Includes currency.
Equipment and software used in the fulfillment of service arrangements, and where the Company retains control,
are capitalized and depreciated over the shorter of their useful life or the term of the contract if an asset is contract
specific.
Note 4 – Segment and Geographic Area Reporting
Our reportable segments – Print and Other, and XFS – are aligned to how the Chief Operating Decision Maker
(CODM), allocates resources and assesses performance against the Company’s key growth strategies and are
consistent with how we manage the business and view the markets we serve. Our CODM is our Chief Executive
Officer (CEO).
Our Print and Other segment includes the sale of document systems, supplies and technical services and
managed services. The segment also includes the delivery of managed services that involve a continuum of
solutions and services that help our customers optimize their print and communications infrastructure, apply
automation and simplification to maximize productivity, and ensure the highest levels of security. This segment also
includes Digital and IT services and software. Our product groupings range from:
•
“Entry”, which include A4 devices and desktop printers and multifunction devices that primarily serve small
and medium workgroups/work teams.
•
“Mid-Range”, which include A3 devices that generally serve large workgroup/work teams environments as
well as products in the Light Production product groups serving centralized print centers, print for pay and
lower volume production print establishments.
•
“High-End”, which include production printing and publishing systems that generally serve the graphic
communications marketplace and print centers in large enterprises.
Customers range from small and mid-sized businesses to large enterprises. Customers also include graphic
communication enterprises as well as channel partners including distributors and resellers. Segment revenues also
include commissions and other payments from the XFS segment for the exclusive right to provide lease financing
for Xerox products. These revenues are reported as part of Intersegment Revenues, which are eliminated in
consolidated revenues.
The XFS segment provides global leasing solutions and currently offers leasing for direct channel customer
purchases of Xerox solutions through bundled lease agreements and lease financing to end-user customers who
purchase Xerox solutions through our indirect channels. Segment revenues primarily include financing income on
sales-type leases (including month-to-month extensions) and leasing fees. Segment revenues also include gains/
losses from the sale of finance receivables including commissions, fees on the sales of underlying equipment
residuals and servicing fees.
Xerox 2024 Annual Report 100
We have entered into finance receivables funding agreements with HPS Investment Partners (HPS) in the U.S., and
with De Lage Landen Financial Services Canada Inc. (DLL) in Canada. Refer to Note 8 - Finance Receivables,
Net for additional information regarding our finance receivables funding agreements.
In the third quarter 2023, the Company entered into an agreement with PEAC Solutions (a subsidiary of HPS) that
named PEAC as the provider of certain leasing and financial services programs for Xerox and non-Xerox equipment
sold through our U.S. network of independent dealers and resellers. In the fourth quarter 2023, our partnership with
PEAC Solutions was further expanded to include the transition of some XFS U.S. employees in risk, IT, and
operations to PEAC Solutions. Upon completion of this transition, PEAC Solutions became the preferred financing
partner, primary funder, and service provider for XBS leases in the U.S.
Segment Policy
We derive the results of our business segments directly from our internal management reporting system. The
accounting policies that the Company uses to derive its segment results are substantially the same as those used
by the Company in preparing its consolidated financial statements. The segment results include a significant level of
management estimates regarding the allocation of revenues such as finance income in bundled lease arrangements
and other leasing revenues and operating lease revenues embedded in our managed services contracts as well as
the allocation of expenses for shared selling and administrative services. Accordingly, the financial results for the
segments may not be indicative of the results the businesses would have on a standalone basis or what might be
presented for the businesses in stand-alone financial statements. The CODM measures the performance of each
segment based on several metrics, including segment revenues, significant segment expenses, and segment profit.
A segment expense is considered significant when it is material to the segment, is included in the measure of
segment profit, and is included in information that is regularly provided to the CODM. The CODM uses segment
revenues, significant segment expenses, and segment profit, in part, to evaluate the performance of, and to allocate
resources to each segment. Segment profit is the only measure of profitability that is used by the CODM to evaluate
the performance of, and to allocate resources to each segment.
The analysis of segment expenses has been applied retrospectively to all periods presented in the financial
statements.
Xerox 2024 Annual Report 101
Segment revenue, significant segment expenses, segment profit, and other selected financial information for our
reportable segments was as follows:
Year Ended December 31,
2024
2023
2022
Print and
Other
XFS
Total
Print and
Other
XFS
Total
Print and
Other
XFS
Total
External revenue
$ 5,864
$
357
$ 6,221
$ 6,485
$
401
$ 6,886
$ 6,714
$
393
$ 7,107
Intersegment revenue(1)
71
—
71
86
—
86
90
—
90
Total Segment net revenue
$ 5,935
$
357
$ 6,292
$ 6,571
$
401
$ 6,972
$ 6,804
$
393
$ 7,197
Reconciliation to Segment Profit
Cost of sales(2)
$ 1,477
$
77
$ 1,554
$ 1,686
$
92
$ 1,778
$ 1,906
$
96
$ 2,002
Cost of services, maintenance
and rentals
2,536
14
2,550
2,647
17
2,664
2,662
17
2,679
Cost of financing(3)
—
106
106
—
130
130
—
108
108
Research, development and
engineering expenses
191
—
191
229
—
229
304
—
304
Selling, administrative and
general expenses(4)(5)
1,392
126
1,518
1,563
133
1,696
1,584
155
1,739
Intersegment expense(6)
71
—
71
86
—
86
90
—
90
Segment profit
$
268
$
34
$
302
$
360
$
29
$
389
$
258
$
17
$
275
Interest income
$
—
$
151
$
151
$
—
$
191
$
191
$
—
$
207
$
207
Depreciation and amortization
201
—
201
208
—
208
228
—
228
Capital expenditures(7)
44
—
44
37
—
37
57
—
57
Total Assets
6,598
1,767
8,365
7,301
2,707
10,008
8,230
3,313
11,543
_____________
(1)
Intersegment revenue is primarily commissions and other payments made by the XFS Segment to the Print and Other Segment for the
lease of Xerox equipment placements.
(2)
Cost of sales and Cost of services, maintenance and rentals for the Print and Other Segment excludes $8 and $43 from the reduction of
inventory and the cancellation of related purchase contracts as a result of the exit of certain production print manufacturing operations
during the year ended December 31, 2024.
(3)
Cost of financing is Interest expense associated with allocated debt of the Company, and is fully allocated to the XFS segment in support of
its Finance assets, while no interest expense is allocated to the Print and Other segment.
(4)
Includes bad debt expense for the XFS segment of $17, $6 and $26, and bad debt expense for the Print and Other segment of $25, $22,
$17 for the three years ended December 31, 2024, 2023 and 2022, respectively.
(5)
The Print and Other segment excludes $12 of Reinvention costs and $7 of Transaction and related costs, net for the year ended December
31, 2024, respectively, and $21 related to accelerated share vesting for the year ended December 31, 2022.
(6)
Intersegment expense is primarily origination fees and commissions made by the Print and Other Segment to the XFS Segment which
leases Xerox equipment to third parties.
(7)
Capital expenditures are allocated fully to the Print and Other segment since they are primarily managed and controlled through that
segment, together, with related long-lived assets.
Xerox 2024 Annual Report 102
Selected financial information for our reportable segments was as follows:
Year Ended December 31,
2024
2023
2022
Pre-tax (Loss)
Total Segment profit
$
302
$
389
$
275
Goodwill impairment
(1,058)
—
(412)
Restructuring and related costs, net
(112)
(167)
(65)
Amortization of intangible assets
(73)
(43)
(42)
PARC Donation
—
(132)
—
Accelerated share vesting
—
—
(21)
Inventory-related impact - exit of certain production print manufacturing
operations
(51)
—
—
Divestitures
(47)
—
—
Reinvention costs
(12)
—
—
Transaction and related costs, net
(7)
—
—
Other expenses, net
(158)
(75)
(60)
Total Pre-tax (loss)
$
(1,216) $
(28) $
(325)
Depreciation and Amortization
Total reported segments
$
201
$
208
$
228
Amortization of intangible assets
73
43
42
Total Depreciation and amortization
$
274
$
251
$
270
Interest Expense
Total reported segments
$
106
$
130
$
108
Corporate
119
68
91
Total Interest expense
$
225
$
198
$
199
Interest Income
Total reported segments
$
151
$
191
$
207
Corporate
14
16
11
Total Interest income
$
165
$
207
$
218
Geographic Area Data
Geographic area data is based upon the location of the subsidiary reporting the revenue or long-lived assets and is
as follows:
Revenues
Long-Lived Assets (1)
Year Ended December 31,
As of December 31,
2024
2023
2022
2024
2023
United States
$
3,437
$
3,826
$
4,014
$
488
$
467
Europe
1,843
1,951
1,935
194
241
Canada
487
554
545
39
42
Other areas
454
555
613
14
21
Total
$
6,221
$
6,886
$
7,107
$
735
$
771
_____________
(1) Long-lived assets are comprised of (i) Land, buildings and equipment, net, (ii) Equipment on operating leases, net, (iii) Leased right-of-use
(ROU) assets, net, (iv) Internal use software, net, and v) Capitalized product software, net.
Xerox 2024 Annual Report 103
Note 5 – Lessor
Revenue from sales-type leases is presented on a gross basis when the Company enters into a lease to realize
value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where
the Company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if
any, is presented on a net basis. In addition, we have elected to account for sales tax and other similar taxes
collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and
variable consideration and present revenue net of these costs.
The components of lease income are as follows:
Location in Statements of (Loss)
Income
Year Ended December 31,
2024
2023
2022
Revenue from sales type leases
Sales
$
706
$
920
$
708
Interest income on lease receivables
Financing
151
191
207
Lease income - operating leases
Services, maintenance and rentals
168
161
170
Variable lease income
Services, maintenance and rentals
46
62
63
Total Lease income
$
1,071
$
1,334
$
1,148
Profit at lease commencement on sales type leases was estimated to be approximately $213, $332 and $229 for
the three years ended December 31, 2024, 2023 and 2022, respectively.
Note 6 – Acquisitions and Divestitures
Acquisitions
The following table summarizes the purchase price allocations for our acquisitions as of the acquisition dates:
Year Ended December 31, 2024
Year Ended December 31, 2023
Year Ended December 31, 2022
Weighted-
Average Life
Acquisitions(1)
Weighted-
Average Life
Acquisitions
Weighted-
Average Life
Acquisitions
Accounts/finance receivables
$
58
$
—
$
29
Intangible assets:
Customer relationships
10 years
134
—
10 years
41
Trademarks
1 year
2
—
5 years
7
Goodwill(2)
286
—
62
Other assets
15
—
30
Total Assets acquired
495
—
169
Liabilities assumed(3)
(124)
—
(76)
Acquisition-related debt(4)
(210)
—
—
Total(5)
$
161
$
—
$
93
_____________
(1) For details related to our 2024 acquisition activity, refer to the "2024 Acquisition" section below.
(2) Goodwill from 2024 and 2022 acquisitions included approximately $42 and $20 of goodwill that is expected to be deductible for tax
purposes. Goodwill is allocated to the Print and Other Segment, the only reporting segment with Goodwill.
(3) Liabilities assumed in 2022 acquisitions included estimated contingent consideration liabilities of approximately $11.
(4) Reflects the secured promissory notes, net of unamortized discounts, issued in connection with the acquisition of ITsavvy Acquisition
Company, Inc.
(5) Total is net of cash acquired.
2024 Acquisition
ITsavvy
On November 20, 2024, we completed the acquisition of ITsavvy Acquisition Company, Inc. (ITsavvy), a technology
infrastructure solutions provider for total consideration of $405, which resulted in 100% ownership of ITsavvy.
The total consideration paid was $405, which consisted of (i) cash payments of $195, (ii) a $110 secured promissory
note issued by Xerox to the Seller at closing (the 2025 Note), and (iii) another $110 secured promissory note issued
by Xerox to the Seller at closing (the 2026 Note and, together with the 2025 Note, the Notes), net of unamortized
debt discount of $10 on the Notes. For additional information related to the secured promissory notes issued in
connection with the acquisition of ITsavvy, refer to Note 15 - Debt.
Xerox 2024 Annual Report 104
Total Purchase Consideration
The table below details the total fair value of consideration for the ITsavvy acquisition:
November 20, 2024
Cash
$
195
Secured promissory notes due in 2025, net of $3 discount
107
Secured promissory notes due in 2026, net of $7 discount
103
Total Fair value of consideration transferred
$
405
Assets Acquired and Liabilities Assumed
The transaction has been accounted for using the acquisition method of accounting in accordance with Accounting
Standards Codification (ASC) 805 — Business Combinations (ASC 805), which requires among other things, that
most assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date. No
change-in-control or contingent consideration liabilities were recorded by Xerox.
The following table summarizes the preliminary allocation of total purchase consideration to the assets acquired and
the liabilities assumed as of the date of the acquisition:
November 20, 2024
Assets acquired
Cash and cash equivalents
$
34
Accounts receivable, net
58
Inventories
4
Other current assets
3
Land, buildings and equipment, net
5
Intangible assets, net
136
Goodwill
286
Other long-term assets
3
Total Assets acquired
$
529
Liabilities assumed
Accounts payable
$
57
Accrued compensation and benefits costs
7
Accrued expenses and other liabilities(1)
16
Deferred tax liability
18
Other long-term liabilities(1)
26
Total Liabilities acquired
$
124
Net Assets acquired
$
405
_____________
(1) Includes Deferred revenue accounted for in accordance with ASC 606 Revenue.
The purchase price allocation for ITsavvy is preliminary and subject to revision as additional information about fair
value of assets and liabilities becomes available. Xerox has one year from the acquisition date to finalize the
purchase price allocation which may result in measurement period adjustments.
Our Consolidated Statement of (Loss) Income for fiscal 2024 includes revenue of $48 and net income of $2
attributable to the ITsavvy acquisition since the date of acquisition.
Intangible Assets
The following table is a summary of the fair value estimates of the identifiable intangible assets and their estimated
average useful lives:
November 20, 2024
Estimated Useful Life
Customer relationships
$
134
10 years
Trademarks
2
1 year
Total consideration transferred
$
136
The majority of customer-related intangible assets relates to customer contracts and related relationships. The
customer contracts and related relationships intangible asset represents the fair value of future projected revenue
that will be derived from sales of products to existing customers of ITsavvy. The asset was valued using a multi-
Xerox 2024 Annual Report 105
period excess earnings method which calculates the present value of the estimated revenues and net cash flows
derived from it. The present value of projected future cash flows included judgment and assumptions regarding
projected future revenues, projected expenses, attrition rates, and the discount rate.
Trademark represents the preliminary estimated fair value of the ITsavvy trade name. The fair value was determined
by applying the relief-from-royalty method under the income approach. This method is based on the application of a
royalty rate to forecasted revenue under the trade name. Intangible assets of approximately $59 is deductible for tax
purposes as a result of previous taxable acquisitions made by ITsavvy.
Goodwill
Goodwill in the amount of $286 was recognized for this acquisition and is calculated as the excess of the
consideration transferred over the net assets recognized and represents the future economic benefits arising from
other assets acquired that could not be individually identified and separately recognized, primarily expected
synergies. Goodwill of approximately $42 is deductible for tax purposes as a result of previous taxable acquisitions
made by ITsavvy. All of the goodwill associated with the ITsavvy acquisition is related to our Print and Other
Segment.
Deferred Taxes
We provided deferred taxes and recorded other tax adjustments as part of the accounting for the acquisition
primarily related to the estimated fair value adjustments for acquired intangible assets, as well as the elimination of
a previously recorded deferred tax liability associated with ITsavvy’s historical tax deductible goodwill.
Pro Forma Information (Unaudited)
The unaudited pro-forma results presented below include the effects of the ITsavvy acquisition as if it had been
consummated as of January 1, 2023. The pro forma financial information for the twelve months ended December
31, 2024 combines our results for this period with the results of ITsavvy for the period beginning January 1, 2024 to
November 19, 2024. The pro forma financial information for the twelve months ended December 31, 2023 combines
our historical results for that period with the historical results of ITsavvy for that period.
The following table summarizes the pro forma financial information:
Year Ended December 31,
2024
2023
Total revenue
$
6,630
$
7,296
Net loss
(1,332)
(8)
The pro forma financial information is presented for informational purposes only and is not indicative of the results of
operations that would have been achieved if the acquisition and the cost of financing the acquisition had taken place
on January 1, 2023. In addition to the results of ITsavvy for the periods prior to acquisition, the pro-forma results
include primarily the amortization associated with the acquired intangible assets, interest expense associated with
the Notes, and expense related to certain share-based payment awards.
2023 Acquisitions
There were no material business acquisitions during 2023.
2022 Acquisitions
During 2022, Xerox acquired two businesses that totaled $93, net of cash acquired.
In February 2022, Xerox acquired Powerland, a leading IT services provider in Canada, for approximately $52 (CAD
66 million), net of cash. The acquisition also included contingent consideration up to approximately $22 (CAD 28
million) based on future performance of the acquisition over the two-year period following the date of acquisition.
Approximately $11 was accrued as part of the purchase price reflecting the estimated fair value payout for this
element. During 2023 $6 of contingent consideration was paid, and the remaining accrual was released during
2024, as performance obligations were not met. The acquisition strengthened Xerox’s IT services offerings in North
America, which include cloud, cybersecurity, end user computing and managed services.
In July 2022, Xerox acquired Go Inspire, a U.K.-based print and digital marketing and communication services
provider, for approximately $41 (GBP 34 million), net of cash. The acquisition strengthened Xerox’s strategy to grow
its global Digital Services presence in EMEA.
The Goodwill associated with both acquisitions is included in our Print and Other segment.
Xerox 2024 Annual Report 106
Our acquisitions in 2022 resulted in 100% ownership of the acquired companies. The operating results of these
acquisitions were not material to our financial statements and were included within our results from the respective
acquisition dates. The purchase prices were all cash, with the exception of the Powerland acquisition in 2022, which
included a contingent consideration element.
Revenue Impact
Our acquisitions contributed aggregate revenues from their respective acquisition dates as follows:
Year Ended December 31,
Acquisition Year
2024
2023
2022
2024
$
48
$
—
$
—
2023
—
—
—
2022
196
215
163
Total Contributed Aggregate Revenue
$
244
$
215
$
163
Pending Acquisition of Lexmark International II, LLC
Equity Purchase Agreement
On December 22, 2024, Xerox Corporation (Xerox Corporation) entered into an Equity Purchase Agreement (the
Purchase Agreement) with Ninestar Group Company Limited (the Seller) and Lexmark International II, LLC
(Lexmark). The Purchase Agreement provides, among other things, that, subject to the terms and conditions set
forth therein, Xerox Corporation will purchase from the Seller all of the issued and outstanding equity securities of
Lexmark.
The Purchase Agreement provides that Xerox Corporation will acquire Lexmark for $1.5 billion, inclusive of net debt
and other assumed liabilities, subject to certain other customary pre- and post-closing adjustments and escrow
arrangements.
The Purchase Agreement contains certain representations, warranties, and covenants of each of the parties,
including covenants by Lexmark relating to the operation of Lexmark’s business prior to the closing. Xerox
Corporation has obtained representation and warranty insurance, which provides coverage for certain breaches of
representations and warranties, subject to certain terms and conditions.
The consummation of the transaction is subject to the satisfaction or waiver of certain closing conditions, including
(i) the termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 and certain foreign regulatory approvals, as well as receipt of confirmation from the CFIUS Monitoring
Agencies, as defined in the Purchase Agreement, that the National Security Agreement related to Lexmark will be
terminated following the closing, (ii) the absence of any law or judgment preventing the closing and (iii) approval of
the shareholders of Ninestar Corporation (Ninestar), a shareholder of the Seller (the Ninestar Shareholder
Approval). The obligation to consummate the transaction by Xerox Corporation, on the one hand, and by the Seller
and Lexmark, on the other hand, is also subject to the accuracy of the other’s representations and warranties
contained in the Purchase Agreement (subject, with specified exceptions, to customary materiality standards) and
the performance of the other’s covenants and agreements in all material respects. Xerox Corporation’s obligation to
consummate the transaction is further subject to the condition that, since the date of the Purchase Agreement, there
has not been a “Material Adverse Effect,” as defined in the Purchase Agreement, that is continuing as the date of
closing. The parties have agreed to use certain efforts to satisfy the closing conditions and consummate the
transaction as soon as practicable, including specified efforts to obtain certain regulatory approvals and confirmation
from the CFIUS Monitoring Agencies required for the transaction. Xerox Corporation expects to close the
transaction in the second half of 2025.
The Purchase Agreement contains certain termination rights, including that either party may terminate the Purchase
Agreement if (i) the transaction has not closed prior to December 22, 2025 (subject to up to three, three-month
extensions at the election of either party, in each case if on such date all of the closing conditions except those
relating to regulatory approvals have been satisfied or waived), (ii) a governmental entity permanently enjoins the
transaction or (iii) the Ninestar Shareholder Approval is not obtained at the applicable meeting of Ninestar
shareholders (the Ninestar Meeting). Additionally, Xerox Corporation may terminate if the Ninestar Meeting is not
held within 180 days following the date of the Purchase Agreement (subject to a 90-day extension under certain
conditions).
Xerox 2024 Annual Report 107
The Purchase Agreement provides that, if the Purchase Agreement is terminated for failure to hold the Ninestar
Meeting by the applicable deadline or for failure to obtain the Ninestar Shareholder Approval at the Ninestar
Meeting, and subject to certain other conditions, Lexmark will reimburse Xerox Corporation for up to $30 of its
documented out-of-pocket expenses. If the Purchase Agreement is terminated by either Xerox Corporation or the
Seller under certain circumstances at a time when the requisite antitrust approvals have not been received or if the
transaction is permanently enjoined pursuant to an antitrust law, subject to certain conditions, Xerox Corporation will
reimburse Seller for up to $30 its documented out-of-pocket expenses.
In addition, the Purchase Agreement provides that if (x) Xerox Corporation or the Seller terminates the Purchase
Agreement for failure to hold the Ninestar Meeting by the applicable deadline or the Ninestar Shareholder Approval
is not obtained at the Ninestar Meeting, (y) at the time of termination an alternative proposal for the acquisition of
Lexmark has been made and (iii) within 18 months of termination the Seller enters into a definitive agreement with
respect to such alternative acquisition proposal, Lexmark will pay Xerox Corporation $50, less any expenses
previously reimbursed to Xerox Corporation.
Voting Agreement
On December 22, 2024, in connection with the execution and delivery of the Purchase Agreement, certain Ninestar
shareholders and their affiliates, solely in their respective capacities as shareholders of Ninestar, entered into that
certain Irrevocable Undertaking (the Voting Agreement) with Xerox Corporation, pursuant to which each stockholder
agreed, among other things, (i) to vote or cause to be vote all of the Ninestar shares they beneficially own, subject
to certain exceptions (including the valid termination of the Purchase Agreement), (ii) to vote against other proposals
to acquire Lexmark and (iii) to certain other restrictions on its ability to take actions with respect to Lexmark and its
shares. The shareholders party to the Voting Agreement collectively beneficially own approximately 32.12% of the
outstanding Ninestar shares.
Committed Debt Financing
On December 22, 2024, Xerox Corporation and Xerox Holdings Corporation (Xerox Holdings Corporation) obtained
commitments for new debt financing pursuant to (i) a commitment letter with Morgan Stanley Senior Funding, Inc.,
MUFG Bank, LTD., Regions Bank, Truist Bank and Citigroup Global Markets Inc. (together, the Incremental
Commitment Parties) pursuant to which the Incremental Commitment Parties agreed to provide an approximately
$357 senior secured incremental term loan facility (the Incremental Facility) in the form of incremental loans under
Xerox Corporation’s first lien term loan agreement entered into in November 2023, among Xerox Corporation, as
borrower, Xerox Holdings Corporation and certain subsidiaries of Xerox Corporation as guarantors, Jefferies
Finance LLC, as administrative agent and collateral agent and the lenders party thereto (the TLB Facility), (ii) a
commitment letter with DCS Finance, LLC and Christy 2017, LP (collectively, the Senior Unsecured Commitment
Parties), pursuant to which the Senior Unsecured Commitment Parties agreed to provide debt financing in the form
of $250 principal amount of senior unsecured notes to be issued by Xerox Holdings Corporation (the Senior
Unsecured Notes) and (iii) a debt commitment letter with Jefferies Finance LLC and Jefferies LLC (collectively,
Jefferies), pursuant to which Jefferies agreed to provide debt financing in the form of $250 senior unsecured notes
(the SUNs) and a committed $550 senior secured term loan facility, in the form of an incremental facility to the TLB
Facility (the Senior Secured Facility and together with the Incremental Facility, the Senior Unsecured Notes and the
SUNs, the Transaction Facilities) (the Commitment Letters).
Xerox Corporation and Xerox Holdings Corporation intend to use the proceeds of the Incremental Facility, the
Senior Unsecured Notes, the Senior Secured Facility (or an equivalent amount of debt securities issued in lieu
thereof) and the SUNs, together with cash on hand and drawings under Xerox Corporation’s asset-backed revolving
credit facility to, among other things, fund the purchase price of all of the issued and outstanding equity securities of
Lexmark pursuant to the Purchase Agreement and other amounts required to be paid by Xerox Corporation
pursuant to Purchase Agreement, and to refinance $388 of Xerox Holdings Corporation’s 5.00% Senior Notes due
2025. The funding of the Transaction Facilities, other than the Senior Secured Facility, under the Commitment
Letters is contingent on the satisfaction of customary conditions, including, among others (i) execution and delivery
of definitive documentation in respect of such financings in accordance with the commitment letters, and (ii)
consummation of the transactions contemplated by the Purchase Agreement. As of December 31, 2024, Xerox
accrued in Other current liabilities approximately $22 in commitment fees, for the commitments discussed above.
The fees will become payable upon the closing of the financing transaction.
Xerox 2024 Annual Report 108
Divestitures
Sales of Argentina and Chile
In March 2024, Xerox completed the sales of its direct business operations in Argentina and Chile to Grupo Datco, a
technologies and fiber optic network service provider in Latin America for a total consideration of $19. Following the
transfer of ownership, the new companies will operate as independent entities and Grupo Datco will continue to
service Xerox devices previously sold in Argentina and Chile and will become the exclusive partner for Xerox in
these markets. This transaction aligns with the Company's ongoing Reinvention.
The sales resulted in a net disposal loss of $51, which includes, a net currency translation loss of $40, allocated
Goodwill of $10, the carrying value of the net assets of $18, and related fees of $2. During the second quarter of
2024 we recorded a purchase price adjustment credit of $3. The allocation of Goodwill was based on the relative
fair value of the operations in Argentina and Chile to the total fair value for the Print and Other Segment Reporting
Unit, which it was part of prior to the sales. The estimated fair values of the operations in Argentina and Chile as well
as the Print and Other reporting unit are based on estimates and assumptions that are considered Level 3 inputs
under the fair value hierarchy. Xerox also recorded a net income tax benefit of $19 related to the sales, for a net
after-tax loss on the sales of $32.
Other Divestitures
During the fourth quarter 2024 we sold the rights to sell paper in certain European countries. The sale resulted in a
net disposal gain of $4. This sale is not expected to materially impact current estimates of future projections with
respect to results of operations or cash flows of the Company.
Donation of Palo Alto Research Center (PARC)
In April 2023, Xerox completed the donation of its Palo Alto Research Center (PARC) subsidiary to Stanford
Research Institute International (SRI), a nonprofit research institute. The donation enables Xerox to focus on its
core businesses and prioritize growth through its business technology solutions for customers in Print, as well as
Digital Services and IT Services. The donation also allows PARC to reach its full potential through SRI’s resources
and deep-tech expertise that will enable PARC to focus exclusively on the development of pioneering innovative
technologies. The majority of patents held by PARC will be retained by Xerox with a perpetual license to use those
patents being provided to SRI. Xerox, at its option, will also continue to receive certain research services from SRI.
The donation resulted in a net charge of $132 in the second quarter 2023, which includes allocated Goodwill of
$115, the carrying value of the net assets associated with PARC being donated of $13, and approximately $4 of
other costs and expenses related to the donation. The allocation of Goodwill was based on the relative fair value of
the PARC business to the total fair value for the Print and Other Segment/Reporting Unit, which it was part of prior
to the donation. The estimated fair values of the PARC business as well as the Print and Other reporting unit are
based on estimates and assumptions that are considered Level 3 inputs under the fair value hierarchy. Xerox also
recorded a net income tax benefit of $40 related to the donation for a net after-tax loss on the donation of $92.
Xerox 2024 Annual Report 109
Note 7 – Accounts Receivable, Net
Accounts receivable, net were as follows:
December 31,
2024
2023
Invoiced
$
692
$
710
Accrued (1)
173
204
Allowance for doubtful accounts
(69)
(64)
Accounts receivable, net
$
796
$
850
____________
(1)
Accrued receivables includes amounts to be invoiced in the subsequent quarter for current services provided.
The allowance for doubtful accounts was as follows:
Balance at December 31, 2022
$
52
Provision
22
Charge-offs, net
(17)
Other(1)
7
Balance at December 31, 2023
$
64
Provision
25
Charge-offs, net
(20)
Other(1)
—
Balance at December 31, 2024
$
69
_____________
(1)
Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as
customer accommodations and contract terminations.
We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment
history and current creditworthiness. The allowance for uncollectible accounts receivable is determined based on an
assessment of past collection experience as well as consideration of current and future economic conditions and
changes in our customer collection trends. Based on that assessment the allowance for doubtful accounts as a
percentage of gross receivables was 8.0% at December 31, 2024 and 7.0% at December 31, 2023. The increase in
the allowance is primarily due to an increase in aged receivables in the U.S.
Accounts Receivable Sale Arrangements
We have one facility in Europe that enables us to sell accounts receivable associated with our distributor network on
an ongoing basis, without recourse. Under this arrangement, we sell our entire interest in the related accounts
receivable for cash and no portion of the payment is held back or deferred by the purchaser.
Accounts receivable sales activity was as follows:
Year Ended December 31,
2024
2023
2022
Accounts receivable sales(1)
$
450
$
399
$
593
_____________
(1)
Losses on sales were not material.
Xerox 2024 Annual Report 110
Note 8 – Finance Receivables, Net
Finance receivables include sales-type leases and installment loans arising from the sales of our equipment. These
receivables are typically collateralized by a security interest in the underlying equipment.
Finance receivables, net were as follows:
December 31,
2024
2023
Gross receivables
$
2,032
$
2,899
Unearned income
(230)
(297)
Subtotal
1,802
2,602
Residual values
—
—
Allowance for doubtful accounts
(57)
(92)
Finance Receivables, Net
1,745
2,510
Less: Billed portion of finance receivables, net
48
71
Less: Current portion of finance receivables not billed, net
608
842
Finance Receivables Due After One Year, Net
$
1,089
$
1,597
A summary of our gross finance receivables' future contractual maturities, including those previously billed, is as
follows:
December 31,
2024
2023
12 months
$
842
$
1,075
24 months
530
758
36 months
368
547
48 months
205
343
60 months
77
143
Thereafter
10
33
Total
$
2,032
$
2,899
Finance Receivables - Allowance for Credit Losses and Credit Quality
Our finance receivable portfolios are primarily in the U.S., Canada and EMEA. We generally establish customer
credit limits and estimate the allowance for doubtful credit losses on a country or geographic basis. Customer credit
limits are based upon an initial evaluation of the customer's credit quality, and are adjusted through ongoing credit
assessments of the customer, which includes the past collections experience and changes in credit quality. The
allowance for doubtful credit losses is determined based on an assessment of origination year and past collection
experience as well as consideration of current and future economic conditions and changes in our customer
collection trends.
Our allowance for doubtful credit losses is effectively determined by geography. The risk characteristics in our
finance receivable portfolio segments are generally consistent with the risk factors associated with the economies of
the countries/regions included in those geographies. Since EMEA is comprised of various countries and regional
economies, the risk profile within that portfolio segment is somewhat more diversified due to the varying economic
conditions among and within the countries.
The net bad debt provision was $17 for the year ended December 31, 2024. This compares to the net bad debt
provision of $6 for the year ended December 31, 2023. The allowance for credit losses as a percentage of net
finance receivables before allowance was 3.2% at December 31, 2024 and 3.5% at December 31, 2023.
In determining the level of reserve required, we critically assessed current and forecasted economic conditions and
trends to ensure we objectively considered those expected impacts in the determination of our reserve. Our
assessment also included a review of current portfolio credit metrics and the level of write-offs incurred over the
past year. We believe our current reserve position remains sufficient to cover expected future losses that may result
from current and future macroeconomic conditions including higher inflation, interest rates and the potential for
recessions in the geographic areas of our customers. We continue to monitor developments in future economic
conditions and trends, and as a result, our reserves may need to be updated in future periods.
Xerox 2024 Annual Report 111
The allowance for credit losses as well as the related investment in finance receivables were as follows:
Allowance for Credit Losses:
United States
Canada
EMEA
Total
Balance at December 31, 2022
$
83
$
7
$
27
$
117
Provision
(8)
1
13
6
Charge-offs, net
(17)
(3)
(14)
(34)
Other(1)
—
2
1
3
Balance at December 31, 2023
$
58
$
7
$
27
$
92
Provision
(7)
10
14
17
Charge-offs, net
(23)
(11)
(17)
(51)
Other(1)
1
(1)
(1)
(1)
Balance at December 31, 2024
$
29
$
5
$
23
$
57
Finance Receivables Collectively Evaluated for Impairment:
December 31, 2023(2)
$
1,205
$
255
$
1,142
$
2,602
December 31, 2024(2)
$
749
$
144
$
909
$
1,802
_____________
(1)
Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as
customer accommodations and contract terminations.
(2)
Total Finance receivables exclude the allowance for credit losses of $57 and $92 at December 31, 2024 and 2023, respectively.
Customers are further evaluated by class based on the type of lease origination. The primary categories are direct,
which primarily includes leases originated directly with end-user customers through bundled lease arrangements,
and indirect, which primarily includes leases originated through our XBS sales channel and lease financing to end-
user customers who purchased equipment we sold to distributors or resellers.
We evaluate our customers based on the following credit quality indicators:
•
Low Credit Risk: This rating includes accounts with excellent to good business credit, asset quality and
capacity to meet financial obligations. These customers are less susceptible to adverse effects due to shifts in
economic conditions or changes in circumstance. Loss rates in this category in the normal course are generally
less than 1%.
•
Average Credit Risk: This rating includes accounts with average credit risk that are more susceptible to loss in
the event of adverse business or economic conditions. Although we experience higher loss rates associated
with this customer class, we believe the risk is somewhat mitigated by the fact that our leases are fairly well
dispersed across a large and diverse customer base. In addition, the higher loss rates are largely offset by the
higher rates of return we obtain with such leases. Loss rates in this category in the normal course are generally
in the range of 2% to 5%.
•
High Credit Risk: This rating includes accounts that have marginal credit risk such that the customer’s ability to
make repayment is impaired or may likely become impaired. We use numerous strategies to mitigate risk
including higher rates of interest, prepayments, personal guarantees, etc. Accounts in this category include
customers who were downgraded during the term of the lease from low and average credit risk evaluation when
the lease was originated. Accordingly, there is a distinct possibility for a loss of principal and interest or
customer default. The loss rates in this category in the normal course are generally in the range of 7% to 10%.
Credit quality indicators are updated at least annually, or more frequently to the extent required by economic
conditions, and the credit quality of any given customer can change during the life of the portfolio.
Xerox 2024 Annual Report 112
Details about our finance receivables portfolio based on geography, origination year and credit quality indicators are
as follows:
December 31, 2024
2024
2023
2022
2021
2020
Prior
Total
Finance
Receivables
United States (Direct):
Low Credit Risk
$
93
$
69
$
34
$
23
$
10
$
1
$
230
Average Credit Risk
51
61
23
27
9
2
173
High Credit Risk
28
24
23
14
7
3
99
Total
$
172
$
154
$
80
$
64
$
26
$
6
$
502
Charge-offs
$
1
$
—
$
1
$
1
$
2
$
2
$
7
United States (Indirect):
Low Credit Risk
$
40
$
48
$
25
$
13
$
3
$
—
$
129
Average Credit Risk
29
42
22
11
3
—
107
High Credit Risk
3
5
2
1
—
—
11
Total
$
72
$
95
$
49
$
25
$
6
$
—
$
247
Charge-offs
$
1
$
7
$
3
$
4
$
2
$
4
$
21
Canada
Low Credit Risk
$
33
$
18
$
7
$
5
$
1
$
—
$
64
Average Credit Risk
32
17
11
5
2
1
68
High Credit Risk
5
2
2
2
1
—
12
Total
$
70
$
37
$
20
$
12
$
4
$
1
$
144
Charge-offs
$
—
$
9
$
1
$
—
$
—
$
1
$
11
EMEA
Low Credit Risk
$
131
$
175
$
116
$
55
$
20
$
3
$
500
Average Credit Risk
75
130
92
45
19
5
366
High Credit Risk
8
14
11
6
3
1
43
Total
$
214
$
319
$
219
$
106
$
42
$
9
$
909
Charge-offs
$
—
$
7
$
6
$
3
$
1
$
—
$
17
Total Finance Receivables
Low Credit Risk
$
297
$
310
$
182
$
96
$
34
$
4
$
923
Average Credit Risk
187
250
148
88
33
8
714
High Credit Risk
44
45
38
23
11
4
165
Total
$
528
$
605
$
368
$
207
$
78
$
16
$
1,802
Total Charge-offs
$
2
$
23
$
11
$
8
$
5
$
7
$
56
Xerox 2024 Annual Report 113
December 31, 2023
2023
2022
2021
2020
2019
Prior
Total
Finance
Receivables
United States (Direct):
Low Credit Risk
$
122
$
51
$
61
$
43
$
17
$
3
$
297
Average Credit Risk
104
35
49
23
9
2
222
High Credit Risk
34
36
25
22
6
3
126
Total
$
260
$
122
$
135
$
88
$
32
$
8
$
645
Charge-offs
$
1
$
1
$
1
$
1
$
1
$
2
$
7
United States (Indirect):
Low Credit Risk
$
136
$
77
$
48
$
22
$
6
$
—
$
289
Average Credit Risk
111
69
41
15
6
—
242
High Credit Risk
12
8
6
2
1
—
29
Total
$
259
$
154
$
95
$
39
$
13
$
—
$
560
Charge-offs
$
4
$
3
$
3
$
2
$
2
$
3
$
17
Canada
Low Credit Risk
$
45
$
24
$
16
$
9
$
4
$
—
$
98
Average Credit Risk
63
36
18
12
6
—
135
High Credit Risk
6
5
4
5
1
1
22
Total
$
114
$
65
$
38
$
26
$
11
$
1
$
255
Charge-offs
$
—
$
—
$
—
$
2
$
—
$
1
$
3
EMEA
Low Credit Risk
$
251
$
182
$
110
$
48
$
19
$
6
$
616
Average Credit Risk
192
148
73
36
17
3
469
High Credit Risk
19
16
11
7
4
—
57
Total
$
462
$
346
$
194
$
91
$
40
$
9
$
1,142
Charge-offs
$
3
$
8
$
4
$
2
$
—
$
—
$
17
Total Finance Receivables
Low Credit Risk
$
554
$
334
$
235
$
122
$
46
$
9
$
1,300
Average Credit Risk
470
288
181
86
38
5
1,068
High Credit Risk
71
65
46
36
12
4
234
Total
$
1,095
$
687
$
462
$
244
$
96
$
18
$
2,602
Total Charge-offs
$
8
$
12
$
8
$
7
$
3
$
6
$
44
Xerox 2024 Annual Report 114
The aging of our receivables portfolio is based upon the number of days an invoice is past due. Receivables that
are more than 90 days past due are considered delinquent. Receivable losses are charged against the allowance
when management believes the uncollectibility of the receivable is confirmed and is generally based on individual
credit evaluations, results of collection efforts and specific circumstances of the customer. Subsequent recoveries, if
any, are credited to the allowance.
We generally continue to maintain equipment on lease and provide services to customers that have invoices for
finance receivables that are 90 days or more past due and, as a result of the bundled nature of billings, we also
continue to accrue interest on those receivables. However, interest revenue for such billings is only recognized if
collectability is deemed probable.
The aging of our billed finance receivables is as follows:
December 31, 2024
Current
31-90
Days
Past Due
>90 Days
Past Due
Total Billed
Unbilled
Total
Finance
Receivables
>90 Days
and
Accruing
Direct
$
19
$
5
$
4
$
28
$
474
$
502
$
35
Indirect
6
1
1
8
239
247
—
Total United States
25
6
5
36
713
749
35
Canada
5
1
1
7
137
144
5
EMEA
5
1
1
7
902
909
15
Total
$
35
$
8
$
7
$
50
$
1,752
$
1,802
$
55
December 31, 2023
Current
31-90
Days
Past Due
>90 Days
Past Due
Total Billed
Unbilled
Total
Finance
Receivables
>90 Days
and
Accruing
Direct
$
24
$
6
$
5
$
35
$
610
$
645
$
41
Indirect
16
3
3
22
538
560
—
Total United States
40
9
8
57
1,148
1,205
41
Canada
6
1
1
8
247
255
10
EMEA(1)
7
2
1
10
1,132
1,142
10
Total
$
53
$
12
$
10
$
75
$
2,527
$
2,602
$
61
Sales of Receivables
The Company has expanded the finance receivables funding agreement with an affiliate of HPS Investment
Partners (HPS) pursuant to which the Company agreed to offer for sale, and HPS agreed to purchase, certain
eligible pools of finance receivables, on a monthly basis, in transactions structured as "true sales at law," and
bankruptcy remote transfers. We have received an opinion to that effect from outside legal counsel. Accordingly, the
receivables sold are derecognized from our financial statements and HPS does not have recourse back to the
Company for uncollectible receivables. In addition, the agreement provides for the sale of the underlying leased
equipment to HPS, with the commission paid by HPS covering the value associated with the underlying equipment
being sold to HPS. The Company retains a first right of refusal to repurchase the underlying equipment at the end of
the lease term, to the extent offered for sale by HPS, at its then fair value.
In January 2024, we entered into a new agreement with HPS to transfer the servicing of the majority of funding
activity to HPS as well as extend the existing term for five years. This agreement automatically renews for a one-
year period unless terminated by either the Company or HPS. Xerox will be required to pay a specified fee to
service the Company’s retained receivables. Xerox will continue to service the lease receivables from prior service
arrangements with HPS for a specified fee.
In October 2024, the Company entered into a finance receivables funding agreement with De Lage Landen
Financial Services Canada Inc. (DLL), pursuant to which the Company can offer for sale, and DLL may purchase,
certain eligible pools of finance receivables structured as “true sales at law” and bankruptcy remote transfers and
we have received an opinion to that effect from outside counsel.
This finance receivables funding agreement has an initial term of five years, with automatic one-year extensions
thereafter, unless terminated by either the Company or DLL. The Company will be paid a commission on lease
receivables sold and will continue to service the lease receivables under the finance receivables funding agreement.
If the portfolio performs above a certain level of incremental service, a fee can be earned annually.
Xerox 2024 Annual Report 115
During 2024, the Company received proceeds of approximately $100 (CAD 139 million) related to the sales of lease
receivables under this finance receivables funding agreement with DLL.
Finance receivable sales activity was as follows:
Year Ended December 31,
2024
2023
2022
Finance receivable sales - net proceeds(1)
$
752
$
1,102
$
60
Gain on sale/Commissions(2)(3)
30
25
2
Servicing revenue(2)
$
17
$
9
$
—
_____________
(1)
Cash proceeds were reported in Net cash provided by operating activities.
(2)
Recorded in Services, maintenance and rentals as Other Revenue. Amounts include revenues associated with the sale of the underlying
leased equipment.
(3)
The years ended December 31, 2024 and 2023 includes $4 and $4 of revenues associated with the sale of the underlying leased equipment
and which are expected to be paid over the term of the agreements.
Secured Borrowings and Collateral
We sold certain finance receivables to consolidated special purpose entities included in our Consolidated Balance
Sheet as collateral for secured loans.
Refer to Note 15 - Debt, for additional information related to these arrangements.
Note 9 – Inventories and Equipment on Operating Leases, Net
The following is a summary of Inventories by major category:
December 31,
2024
2023
Finished goods(1)
$
609
$
528
Work-in-process
36
47
Raw materials(2)
50
86
Total Inventories
$
695
$
661
_____________
(1)
Finished goods at December 31, 2024 includes a reduction of approximately $7, related to the exit of certain production print manufacturing
operations.
(2)
Raw materials at December 31, 2024 includes a reduction of approximately $38, related to the exit of certain production print manufacturing
operations.
The transfer of equipment from our inventories to equipment subject to an operating lease is presented in our
Consolidated Statements of Cash Flows in the operating activities section. Equipment on operating lease and
similar arrangements consists of our equipment rented to customers and is depreciated to estimated salvage value
at the end of the lease term.
Equipment on operating leases and the related accumulated depreciation were as follows:
December 31,
2024
2023
Equipment on operating leases
$
931
$
1,074
Accumulated depreciation
(686)
(809)
Equipment on operating leases, net
$
245
$
265
Xerox 2024 Annual Report 116
Depreciable lives generally vary from four to five years consistent with our planned and historical usage of the
equipment subject to operating leases. Estimated minimum future revenues associated with Equipment on
operating leases are as follows:
December 31,
2024
2023
12 months
$
131
$
165
24 months
70
89
36 months
45
52
48 months
25
30
60 months
9
13
Thereafter
—
2
Total
$
280
$
351
Total contingent rentals on operating leases, consisting principally of usage charges in excess of minimum
contracted amounts, for the years ended December 31, 2024, 2023 and 2022 amounted to $46, $62 and $63,
respectively.
Secured Borrowings and Collateral
We sold the rights to payments under operating leases to a consolidated special purpose entity included in our
Consolidated Balance Sheet as collateral for a secured loan.
Refer to Note 15 - Debt, for additional information related to this arrangement.
Note 10 - Land, Buildings, Equipment and Software, Net
Land, buildings and equipment, net were as follows:
December 31,
Estimated
Useful Lives (Years)
2024
2023
Land
$
8
$
8
Building and building equipment
25 to 50
669
678
Leasehold improvements
1 to 12
72
78
Plant machinery
5 to 12
771
855
Office furniture and equipment
3 to 15
411
436
Finance leased assets
1 to 12
79
33
Other
4 to 20
35
37
Construction in progress
11
11
Subtotal
2,056
2,136
Accumulated depreciation(1)
(1,805)
(1,870)
Land, buildings and equipment, net
$
251
$
266
_____________
(1)
Depreciation expense was $57, $60 and $68 for the three years ended December 31, 2024, 2023 and 2022, respectively.
We lease buildings, vehicles, and equipment, substantially all of which are accounted for as operating leases. Refer
to Note 11 - Lessee for additional information regarding leased assets.
Internal Use Software
As of December 31, 2024 and 2023, capitalized costs related to internal use software, net of accumulated
amortization, were $60 and $68, respectively. Useful lives of our internal use software generally vary from three to
seven years.
Xerox 2024 Annual Report 117
Note 11 – Lessee
Operating Leases
We have operating leases for real estate and vehicles in our domestic and international operations, and for certain
equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain
supply chain contracts for warehouses, primarily within our domestic operations. Our leases have remaining terms
of up to ten years and a variety of renewal and/or termination options. The components of lease expense are as
follows:
Year Ended December 31,
2024
2023
2022
Operating lease expense
$
70
$
83
$
97
Short-term lease expense
14
16
17
Variable lease expense(1)
57
53
49
Sublease income
(1)
(1)
(5)
Total Lease expense
$
140
$
151
$
158
_____________
(1)
Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs, as
well as taxes and insurance.
As of December 31, 2024, we had no material operating leases that had not yet commenced.
Operating lease ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets
as follows:
December 31,
2024
2023
Other long-term assets
$
179
$
172
Accrued expenses and other current liabilities
$
45
$
41
Other long-term liabilities
143
141
Total Operating lease liabilities
$
188
$
182
Supplemental information related to operating leases is as follows:
Year Ended December 31,
2024
2023
2022
Cash paid for amounts included in the measurement of lease liabilities -
Operating cash flows
$
72
$
91
$
101
Right-of-use assets obtained in exchange for new lease liabilities (1)
$
65
$
23
$
45
Weighted-average remaining lease term
4 years
4 years
4 years
Weighted-average discount rate
7.70 %
6.07 %
5.19 %
_____________
(1)
Includes the impact of new leases as well as remeasurements and modifications to existing leases.
Maturities and additional information related to operating lease liabilities are as follows:
December 31, 2024
12 months
$
69
24 months
58
36 months
37
48 months
27
60 months
17
Thereafter
9
Total Lease payments
217
Less: Imputed interest
29
Total Operating lease liabilities
$
188
Xerox 2024 Annual Report 118
Finance Leases
Xerox has finance leases for equipment in the U.S. and Europe, as well as for vehicles and related infrastructure,
within outsourced warehouse supply arrangements, in the U.S. These leases have remaining maturities up to five
years.
The lease expense associated with our finance leases was $13, $8, and $4 for the three years ended December 31,
2024, 2023 or 2022, respectively.
As of December 31, 2024, we had no additional financing leases that had not yet commenced.
Finance lease ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as
follows:
December 31,
2024
2023
Land, buildings and equipment, net
$
55
$
19
Accrued expenses and other current liabilities
$
15
$
8
Other long-term liabilities
38
9
Total Finance lease liabilities
$
53
$
17
Supplemental information related to finance leases is as follows:
Year Ended December 31,
2024
2023
2022
Cash paid for amounts included in the measurement of lease liabilities
$
12
$
8
$
4
Right-of-use assets obtained in exchange for new lease liabilities (1)
$
42
$
7
$
12
Weighted-average remaining lease term
4 Years
2 Years
3 years
Weighted-average discount rate
10.53 %
7.28 %
6.40 %
_____________
(1)
Includes the impact of new leases as well as remeasurements and modifications to existing leases.
Maturities and additional information related to finance lease liabilities are as follows:
December 31,
2024
2023
12 months
$
19
$
9
24 months
15
6
36 months
12
3
48 months
11
1
60 months
8
—
Thereafter
—
—
Total Lease payments
65
19
Less: Imputed interest
12
2
Total Finance Lease Liabilities
$
53
$
17
Xerox 2024 Annual Report 119
Note 12 - Goodwill, Net and Intangible Assets, Net
Goodwill, Net
The following table presents the changes in the carrying amount of Goodwill, net:
2024
2023
2022
Goodwill
$
3,940
$
4,013
$
4,068
Accumulated impairment losses
(1,193)
(1,193)
(781)
Goodwill, net at January 1
$
2,747
$
2,820
$
3,287
Goodwill Activity:
Foreign currency translation - Gross
(29)
47
(120)
Acquisitions(1):
U.S. Acquisition
286
—
—
U.K. Acquisitions
—
5
28
Canada Acquisition
—
—
34
Other
1
—
3
Dispositions(2)
(16)
(125)
—
Goodwill impairment
(1,058)
—
(412)
Foreign currency translation - Impairment
6
—
—
Goodwill
$
4,182
$
3,940
$
4,013
Accumulated impairment losses
(2,245)
(1,193)
(1,193)
Goodwill, net at December 31
$
1,937
$
2,747
$
2,820
_____________
(1)
2024 primarily relates to our acquisition of ITsavvy. Refer to Note 6 - Acquisitions and Divestitures for additional information related to
acquisitions.
(2)
2024 primarily includes the write off of $10 of Goodwill associated with the sales of our business operations in Argentina and Chile, as well
as other immaterial dispositions. 2023 primarily includes the write-off of $115 of Goodwill associated with the donation of our Palo Alto
Research Center (PARC). Refer to Note 6 - Acquisitions and Divestitures for additional information related to the sales of our operations in
Argentina and Chile and the PARC donation.
Total Goodwill is fully allocated to the Print and Other segment and no Goodwill has been allocated to the XFS
segment for the three years ended December 31, 2024, 2023 or 2022, respectively.
In the third quarter of 2024, we concluded that a quantitative test of Goodwill was required. Based on that test, we
determined that the estimated fair value of the Print and Other reporting unit (the only reporting unit with Goodwill)
had declined below its carrying value and, as a result, we recognized an after-tax non-cash impairment charge of
$1,015 ($1,058 pre-tax) related to our Goodwill for the year ended December 31, 2024.
In the third quarter of 2022, we concluded that an interim impairment test of Goodwill was required. Based on that
test, we determined that the estimated fair value of the Print and Other reporting unit (the only reporting unit with
Goodwill) had declined below its carrying value and, as a result, we recognized an after-tax non-cash impairment
charge of $395 ($412 pre-tax) related to our Goodwill for the year ended December 31, 2022.
The estimated fair value of the Print and Other reporting unit, for all periods discussed above, is based on estimates
and assumptions that are considered Level 3 inputs under the fair value hierarchy.
Intangible Assets, Net
Intangible assets, net were $236 at December 31, 2024, all of which relate to our Print and Other segment.
Intangible assets were comprised of the following:
December 31, 2024
December 31, 2023
Weighted
Average
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Net
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Amount
Customer relationships
10 years
$
324
$
106
$
218
$
200
$
92
$
108
Distribution network
25 years
123
123
—
123
118
5
Trademarks
11 years
38
20
18
209
147
62
Technology and non-compete
3 years
12
12
—
13
11
2
Total Intangible Assets
$
497
$
261
$
236
$
545
$
368
$
177
Excluding the impact of future acquisitions, amortization expense is expected to approximate $36 in 2025, 2026,
2027, and 2028, respectively, and $33 in 2029. Trademark assets are expected to be fully amortized by 2029.
Xerox 2024 Annual Report 120
Note 13 – Restructuring Programs
In connection with our Reinvention and other transformative programs, we engage in restructuring actions in order
to reduce our cost structure and realign it to the changing nature of our business. As part of our efforts to reduce
costs, our restructuring actions may also include the off-shoring and/or outsourcing of certain operations, services
and other functions, the exit from certain product lines and geographies, as well as reducing our real estate
footprint.
Restructuring and related costs, net reflect the following components for the three years ended December 31, 2024,
2023 and 2022:
Year Ended December 31,
2024
2023
2022
Restructuring charges, net
$
62
$
114
$
68
Asset impairment charges, net
25
32
(6)
Related costs, net
25
21
3
Total Restructuring and related costs, net
$
112
$
167
$
65
Restructuring charges, net primarily includes employee severance costs and other contractual termination costs that
may result from restructuring actions and initiatives. In those geographies where we have either a formal severance
plan or a history of consistently providing severance benefits representing a substantive plan (on-going benefit
arrangements), we recognize employee severance and associated costs when they are both probable and
reasonably estimable and is the primary accounting treatment applied for most of our Restructuring actions.
Severance payments made under a one-time benefit arrangement are recorded upon communication to the affected
employees. In the event employees are required to perform future service beyond their minimum retention period in
a one-time benefit arrangement, we record severance charges ratably over the remaining service period of those
employees as restructuring related costs. Contractual termination costs, including facility exit costs, are generally
recognized when it has been determined that a liability has been incurred. Asset impairment charges, net primarily
include impairments that may result from employee reductions, migration of facilities from higher-cost to lower-cost
countries, and the consolidation of facilities and is net of any gains we may realize on the disposal of those assets.
Restructuring activities may also include the disposal or abandonment of assets, including leased right-of-use
assets, that require an acceleration of depreciation or an impairment charge reflecting the excess of an asset's book
value over fair value or other recoveries. Restructuring related costs also include severance costs paid in
connection with contractual outsourcing arrangements as well as professional support services associated with our
business transformation initiatives.
The recognition of restructuring and related costs requires that we make certain judgments and estimates regarding
the nature, timing and amount of costs associated with planned initiatives. To the extent our actual results differ from
our estimates and assumptions, we may be required to revise the estimated liabilities, requiring the recognition of
additional restructuring costs or the reduction of liabilities already recognized. At the end of each reporting period,
we evaluate the remaining accrued balances to ensure they are properly stated, and the utilization of the reserves
are for their intended purpose in accordance with developed exit plans.
Xerox 2024 Annual Report 121
Restructuring Charges, Net
Restructuring charges, net primarily relate to the Print and Other segment as amounts related to the XFS segment
were immaterial for all periods presented. A summary of our restructuring program activity for the three years ended
December 31, 2024, 2023 and 2022 is as follows:
Severance
Costs
Other Contractual
Termination Costs(2)
Total
Balance at December 31, 2021
$
25
$
2
$
27
Restructuring provision
74
3
77
Reversals of prior charges
(8)
(1)
(9)
Net Current Period Charges(1)
66
2
68
Charges against reserve and currency
(52)
—
(52)
Balance at December 31, 2022
$
39
$
4
$
43
Restructuring provision
125
—
125
Reversals of prior charges
(11)
—
(11)
Net Current Period Charges(1)
114
—
114
Charges against reserve and currency
(24)
(4)
(28)
Balance at December 31, 2023
$
129
$
—
$
129
Restructuring provision
68
4
72
Reversals of prior charges
(9)
(1)
(10)
Net Current Period Charges(1)
59
3
62
Charges against reserve and currency
(79)
(3)
(82)
Balance at December 31, 2024
$
109
$
—
$
109
_____________
(1) Represents net amount recognized within the Consolidated Statements of (Loss) Income for the years shown for restructuring. Reversals of
prior charges primarily include net changes in estimated reserves from prior period initiatives.
(2) Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual
termination costs.
The following table summarizes the reconciliation to the Consolidated Statements of Cash Flows:
Year Ended December 31,
2024
2023
2022
Restructuring cash payments
$
(78) $
(27) $
(52)
Effects of foreign currency and other non-cash items
(4)
(1)
—
Charges against reserve and currency
$
(82) $
(28) $
(52)
Asset Impairment Charges, Net
Charges associated with asset impairments represent the write-down of the related assets to their new cost basis.
Impairments are net of any potential sublease income or other recovery amounts. Charges incurred during 2024
includes impairments associated with strategic actions taken as a result of the Company's Reinvention, including
geographic simplification. 2023 activity includes the impairment associated with the Company's sale of its Russian
Subsidiary, which was completed in October 2023 and the impairment associated with the Company's sale of its
Xerox Research Center of Canada (XRCC), the Canadian research division of Xerox, to Myant Capital Partners,
which was completed in July 2023. 2023 also includes impairments associated with strategic actions taken as a
result of the Company's Reinvention, including the outsourcing of certain back-office functions and geographic
simplification.
Year Ended December 31,
2024
2023
2022
Lease right of use assets(1)
$
—
$
—
$
2
Owned assets(1)
27
36
15
Asset impairments
27
36
17
Gain on sales of owned assets(2)
—
—
(22)
Adjustments/Reversals
(2)
(4)
(1)
Net asset impairment charge (credit)
$
25
$
32
$
(6)
______________
(1)
Primarily related to the exit and abandonment of leased and owned facilities, net of any potential sublease income and recoveries.
(2)
Reflect gain on the sales of exited surplus facilities and land.
Xerox 2024 Annual Report 122
Related Cost, Net
In connection with our restructuring programs, we also incurred certain related costs as follows:
Year Ended December 31,
2024
2023
2022
Retention-related severance/bonuses(1)
$
(2) $
(2) $
—
Contractual severance costs
(1)
—
3
Consulting and other costs(2)
28
23
—
Total
$
25
$
21
$
3
_____________
(1)
Includes retention related severance and bonuses for employees expected to continue working beyond their minimum retention period
before termination.
(2)
Represents professional support services associated with our business transformation initiatives.
For the years ended December 31, 2024, 2023 and 2022, cash payments for restructuring related costs were
approximately $28, $26 and $9, respectively, while the reserve was $4 and $8 at December 31, 2024 and 2023,
respectively. The balance at December 31, 2024 is expected to be paid over the next twelve months.
Xerox 2024 Annual Report 123
Note 14 - Supplementary Financial Information
The components of Other assets and liabilities are as follows:
December 31,
2024
2023
Other Current Assets
Income taxes receivable
$
22
$
13
Royalties, license fees and software maintenance
19
19
Restricted cash
33
70
Prepaid expenses
39
29
Advances and deposits
17
33
Other
82
70
Total Other Current Assets
$
212
$
234
Other Long-term Assets
Income taxes receivable
$
45
$
22
Prepaid pension costs
421
423
Internal use software, net
60
68
Restricted cash
22
28
Customer contract costs, net
139
136
Operating lease right-of-use assets
179
172
Deferred compensation plan investments
13
14
Investments in affiliates, at equity(1)
49
40
Investments at cost - Xerox Holdings
40
26
Other
89
105
Total Other Long-term Assets(2)
$
1,057
$
1,034
Accrued Expenses and Other Current Liabilities
Income taxes payable
$
33
$
39
Other taxes payable
46
60
Operating lease obligations
45
41
Interest payable
37
37
Restructuring reserves
86
119
Dividends payable - Xerox Holdings(3)
43
42
Distributor and reseller rebates/commissions
118
120
Unearned income and other revenue deferrals
133
147
Administration and overhead
44
61
Other
199
196
Total Accrued Expenses and Other Current Liabilities(4)
$
784
$
862
Other Long-term Liabilities
Deferred taxes
$
85
$
95
Income taxes payable
4
14
Operating lease obligations
143
141
Environmental reserves
12
11
Restructuring reserves
23
10
Other
119
89
Total Other Long-term Liabilities
$
386
$
360
_____________
(1)
Investments in affiliates, at equity largely consists of several minor investments in entities in the Middle East region. Xerox's ownership
interest in investments in corporate joint ventures and other companies is generally between 20% and 50%.
(2)
Xerox's balances of $1,017 and $1,008 at December 31, 2024 and 2023, respectively, excludes Investments at cost.
(3)
Represents dividends payable by Xerox Holdings Corporation on Common and Preferred Stock.
(4)
Xerox's balances of $741 and $820 at December 31, 2024 and 2023, respectively, excludes dividends payable of $43 and $42, respectively.
Xerox 2024 Annual Report 124
Cash, Cash Equivalents and Restricted Cash
Restricted cash primarily relates to escrow cash deposits made in Brazil associated with ongoing litigation as well
as cash collections on finance receivables that were pledged for secured borrowings. As more fully discussed in
Note 20 - Contingencies and Litigation, various litigation matters in Brazil require us to make cash deposits to
escrow as a condition of the continuing litigation. Restricted cash amounts are classified in our Consolidated
Balance Sheets based on when the cash will be contractually or judicially released.
Cash, cash equivalents and restricted cash amounts are as follows:
December 31,
2024
2023
Cash and cash equivalents
$
576
$
519
Restricted cash
Litigation deposits in Brazil
20
27
Escrow and cash collections related to secured borrowings and receivable sales(1)
13
49
Other restricted cash
22
22
Total Restricted cash
55
98
Cash, cash equivalents and restricted cash
$
631
$
617
__________________________
(1)
Includes collections on finance receivables pledged for secured borrowings or receivables sold that will be remitted in the following month.
Restricted cash is reported in the Consolidated Balance Sheets as follows:
December 31,
2024
2023
Other current assets
$
33
$
70
Other long-term assets
22
28
Total Restricted cash
$
55
$
98
Summarized Cash Flow Information
Summarized cash flow information is as follows:
Source/(Use)
Location in Statement of
Cash Flows
Year Ended December 31,
2024
2023
2022
Provision for receivables(1)
Operating
$
44
$
36
$
36
Provision for inventory
Operating
66
18
29
Depreciation of buildings and equipment
Operating
57
60
68
Depreciation and obsolescence of equipment on
operating leases
Operating
117
111
115
Amortization of internal use software
Operating
27
37
45
Amortization of acquired intangible assets
Operating
73
43
42
Amortization of patents(2)
Operating
9
9
10
Amortization of customer contract costs(3)
Operating
64
69
73
Cost of additions to land, buildings and equipment
Investing
(27)
(29)
(36)
Cost of additions to internal use software
Investing
(17)
(8)
(21)
Payments to acquire noncontrolling interests - Xerox
Holdings
Investing
(30)
(5)
(13)
Common stock dividends - Xerox Holdings
Financing
(127)
(151)
(160)
Preferred stock dividends - Xerox Holdings
Financing
(14)
(14)
(14)
Payments to noncontrolling interests
Financing
(2)
(2)
(1)
Investment from noncontrolling interests
Financing
—
—
6
Repurchases related to stock-based compensation -
Xerox Holdings
Financing
(10)
(8)
(12)
__________________________
(1)
Provision for receivables includes adjustments for customer accommodations and contract terminations of $2, $8, and $(7) for the three
years ended December 31, 2024, 2023 and 2022, respectively.
(2)
Amortization of patents is reported in (Increase) decrease in other current and long-term assets on the Consolidated Statements of Cash
Flows.
(3)
Amortization of customer contract costs is reported in (Increase) decrease in other current and long-term assets on the Consolidated
Statements of Cash Flows. Refer to Note 3 - Revenue - Contract Costs for additional information.
Xerox 2024 Annual Report 125
Supplier Finance Programs
We have a program through a financial institution that enables vendors and suppliers, at their option, to receive
early payment for their invoices. All outstanding amounts related to the program are recorded within Accounts
payable in our Consolidated Balance Sheets, and the associated payments are included in operating activities
within our Consolidated Statements of Cash Flows. The program operates in a similar manner to a purchasing card
program, however with this program we directly receive invoices associated with those vendors and suppliers
participating in the program and confirm and validate those invoices and the amounts due before submitting the
invoices to the financial institution for early payment at a discounted amount. The financial institution subsequently
invoices us for the stated or full amount of the invoices paid early and we are required to make payment within 45
days of the statement date. The overall impact of the program generally results in paying our supplier and vendor
invoices consistent with their original terms. This program is generally available to all non-inventory vendors and
suppliers.
Activity related to the Company's supplier finance program is as follows:
2024
2023
Balance at January 1st,
40
40
Amounts invoiced
110
125
Invoices paid
(120)
(125)
Balance at December 31st,
$
30
$
40
Note 15 – Debt
Short-term borrowings were as follows:
December 31,
2024
2023
Short-term debt and current portion of long-term debt
Xerox Holdings Corporation
$
388
$
—
Xerox Corporation
130
323
Xerox - Other Subsidiaries(1)
67
244
Total
$
585
$
567
_____________
(1) Represents subsidiaries of Xerox Corporation.
We classify our debt based on the contractual maturity dates of the underlying debt instruments or as of the earliest
put date available to the debt holders. We defer costs associated with debt issuance over the applicable term, or to
the first put date in the case of convertible debt or debt with a put feature. These costs are amortized as interest
expense in our Consolidated Statements of (Loss) Income.
Xerox 2024 Annual Report 126
Long-term debt was as follows:
December 31,
Stated Rate
Weighted Average
Interest Rates at
December 31, 2024(1)
2024
2023
Xerox Holdings Corporation
Senior Notes due 2025
5.00 %
4.92 %
$
388
$
750
Senior Notes due 2028
5.50 %
5.40 %
750
750
Senior Notes due 2029
8.88 %
8.88 %
500
—
Convertible Senior Notes due 2030
3.75 %
3.75 %
400
—
Subtotal - Xerox Holdings Corporation
$
2,038
$
1,500
Xerox Corporation
Senior Notes due 2024
3.80 %
3.84 %
$
—
$
300
Term Loan B due 2029(2)
9.34 %
8.34 %
523
550
Secured Promissory Note due 2025(2)
— %
5.53 %
110
—
Secured Promissory Note due 2026(2)
— %
5.53 %
110
—
Senior Notes due 2035
4.80 %
4.84 %
250
250
Senior Notes due 2039
6.75 %
6.78 %
350
350
Subtotal - Xerox Corporation
$
1,343
$
1,450
Xerox - Other Subsidiaries(2)
United States
$
—
$
102
Canada
—
77
France
70
182
Subtotal Xerox - Other Subsidiaries
$
70
$
361
Principal debt balance
$
3,451
$
3,311
Xerox Holdings Corporation - Debt issuance costs
(19)
(6)
Xerox Corporation - Debt issuance costs
(11)
(12)
Xerox - Other subsidiaries - Debt issuance costs
—
(1)
Subtotal - Debt issuance costs
$
(30) $
(19)
Unamortized (discount) premium
(22)
(15)
Less: current maturities
(585)
(567)
Total Long-term Debt
$
2,814
$
2,710
_____________
(1) Represents the weighted average effective interest rate, which includes the effect of discounts and imputed interest on issued debt.
(2) Represent secured borrowings of Xerox Corporation and its Other subsidiaries. Refer to the Secured Borrowings and Collateral section
below for additional information regarding the secured borrowings of Other subsidiaries, which are secured by finance receivables.
Scheduled principal payments due on our long-term debt for the next five years and thereafter are as follows:
2025(1)
2026
2027
2028
2029
Thereafter
Total
Xerox Holdings Corporation
$
388
$
—
$
—
$
750
$
500
$
400
$
2,038
Xerox Corporation
138
151
55
55
344
600
1,343
Xerox - Other Subsidiaries(2)
67
3
—
—
—
—
70
Total
$
593
$
154
$
55
$
805
$
844
$
1,000
$
3,451
_____________
(1)
Current portion of long-term debt maturities for 2025 are $52, $52, $439 and $50 for the first, second, third and fourth quarters, respectively.
(2)
Represents subsidiaries of Xerox Corporation.
Secured Promissory Notes
In connection with Xerox's acquisition of ITsavvy Acquisition Company, Inc. (ITsavvy), Xerox issued two, non-interest
bearing, secured promissory notes (the 2025 Note and the 2026 Note, or the Notes). Each of the Notes has a
principal amount of $110. The 2025 Note has a maturity date of October 8, 2025, and the 2026 Note has a maturity
date of January 30, 2026. Pursuant to the 2025 Note, Xerox must pay the seller $27.50 within five business days of
each of January 1, 2025, April 1, 2025, July 1, 2025, and October 1, 2025. To the extent not previously paid, each of
the Notes shall be paid in full in cash on their respective maturity date.
We recorded the non-interest-bearing promissory notes at their present value in our Consolidated Financial
Statements. The total amount recorded was $210, and was net of unamortized debt discount of $10. At December
31, 2024, the 2025 Note was recorded in Short-term debt and the current portion of long-term debt, while the 2026
Note was recorded in Long-term debt in our Consolidated Balance Sheet. Notwithstanding the foregoing, the Notes
will be subject to prepayment in the event of a “Disposition Event,” as defined in each of the Notes, and customary
Xerox 2024 Annual Report 127
events of default. Each of the Notes are subordinated in lien priority to certain outstanding indebtedness of Xerox.
Each of the Notes are secured by a security interest in substantially all of the assets of Xerox Holdings Corporation
(Holdings), Xerox and certain U.S. and Canadian subsidiaries of Xerox. Holdings and certain U.S. and Canadian
subsidiaries of Xerox are guarantors under each of the Notes.
For additional information related to our acquisition of ITsavvy, refer to Note 6 - Acquisitions and Divestitures.
Senior Notes
In March 2024, Xerox Holdings Corporation issued $500 of 8.875% Senior Notes due in 2029 (the 2029 Notes) at
par, resulting in net proceeds (after fees and expenses) of approximately $495. The 2029 Notes are senior
unsecured obligations of Xerox Holdings Corporation and are fully and unconditionally guaranteed on a senior
unsecured basis by Xerox Corporation and certain other wholly owned domestic restricted subsidiaries of the
Company. The 2029 Notes and the related guarantees were issued in a private placement to qualified institutional
buyers pursuant to Rule 144A under the Securities Act.
Interest is payable semi-annually in arrears on May 30th and November 30th of each year, beginning on November
30, 2024. Xerox Holdings Corporation may, at its option, redeem some or all of the 2029 Notes at varying prices
based on the timing of the redemption. The indenture governing the 2029 Notes contains covenants that, among
other things, limit the ability of Xerox Holdings Corporation and the ability of its restricted subsidiaries to incur or
guarantee additional indebtedness, pay dividends or make other restricted payments, prepay, redeem or
repurchase certain subordinated debt, issue certain preferred stock or similar equity securities, make loans and
investments, sell or otherwise dispose of assets, incur liens, enter into transactions with affiliates, enter into
agreements restricting its subsidiaries’ ability to pay dividends, and consolidate, merge or sell all or substantially all
assets. Additionally, if Xerox Holdings Corporation experiences a Change of Control Triggering Event (as defined in
the indenture governing the 2029 Notes), Xerox Holdings Corporation is required to offer to repurchase the 2029
Notes at 101% of the principal amount of such notes, plus accrued and unpaid interest, if any, to, but excluding, the
date of repurchase.
Debt issuance costs of approximately $5 were paid and deferred in connection with the issuance of the 2029 Notes,
and will be amortized over the term of the 2029 Notes. Refer to the Use of Aggregate Proceeds from Senior
Notes section below for additional information regarding the use of net proceeds.
Convertible Senior Notes and Capped Call
Convertible Senior Notes
In March 2024, Xerox Holdings Corporation issued an aggregate $400 of 3.75% Convertible Senior Notes due in
2030 (the 2030 Notes). The 2030 Notes are senior unsecured obligations of Xerox Holdings Corporation and are
fully and unconditionally guaranteed by Xerox Corporation and Xerox Business Solutions, LLC. The 2030 Notes
were issued in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
Interest is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September
15, 2024, and the 2030 Notes will mature on March 15, 2030, unless earlier converted, redeemed or repurchased.
The net proceeds from this offering were approximately $390, after deducting the debt issuance costs. Debt
issuance costs of approximately $10 were paid and deferred in connection with the issuance of the 2030 Notes, and
will be amortized over the term of the 2030 Notes. Refer to the Use of Aggregate Proceeds from Senior Notes
section below for additional information regarding the use of net proceeds.
Holders of the 2030 Notes may convert their notes at their option at any time prior to the close of business on the
business day immediately preceding December 15, 2029 only under the following circumstances: (i) during any
fiscal quarter commencing after the fiscal quarter ending on March 31, 2024 (and only during such calendar
quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not
consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the
immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price on each
applicable trading day; (ii) during the five consecutive trading day period after any ten consecutive trading day
period (the measurement period) in which the trading price (as determined in accordance with the indenture
governing the 2030 Notes) per $1,000 principal amount of 2030 Notes, as determined following a request by a
holder or holders of the 2030 Notes, for each trading day of the measurement period was less than 98% of the
product of the last reported sale price of the Company's common stock and the applicable conversion rate on each
such trading day; (iii) if the Company calls any, or all of the 2030 Notes for redemption, but only with respect to the
Notes called (or deemed called) for redemption; (iv) if the Company elects to distribute to all or substantially all
holders of common stock any rights, options or warrants (other than in connection with a stockholder rights plan)
entitling them, for a period of not more than 45 calendar days from the declaration date for such distribution, to
subscribe for or purchase shares of Company's common stock at a price per share that is less than the average of
Xerox 2024 Annual Report 128
the last reported sale price of common stock for the ten consecutive trading date period ending on, and including,
the trading day immediately preceding the declaration date for such distribution or distribute to all, or substantially all
holders of common stock, our assets, debt securities or rights to purchase our securities, which distribution has a
per share value, as reasonably determined by our Board of Directors or a committee thereof, exceeding 10% of the
last reported sale price of the Company's common stock on the trading day immediately preceding the declaration
date for such distribution; or (v) upon the occurrence of specified corporate events (as determined in accordance
with the indenture governing the 2030 Notes). On or after December 15, 2029, until the close of business on the
second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of
their 2030 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing
circumstances.
As of December 31, 2024, none of the conditions permitting the holders of the 2030 Notes to convert their notes
early had been met. Therefore, the 2030 Notes are classified as long-term debt.
The initial conversion rate is 47.99 shares of the common stock per $1,000 principal amount of notes, which is
equivalent to an initial conversion price of approximately $20.84 per share of the common stock. The conversion
rate will be subject to adjustment under certain circumstances. In connection with certain corporate events or if the
Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for
holders who elect to convert their notes in connection with such corporate event or during the relevant redemption
period.
Upon conversion of the 2030 Notes, the Company must pay cash up to the aggregate principal amount of the notes
to be converted and pay or deliver, as the case may be, cash, shares of the Company's common stock, or a
combination of cash and shares of the Company's common stock, at the Company's election in respect of the
remainder, if any, of the Company's conversion obligation in excess of the aggregate principal amount of the notes
being converted.
We may not redeem the 2030 Notes prior to September 20, 2027. The Company may redeem for cash all or any
portion of the notes, at our option, on or after September 20, 2027, if the last reported sale price of the Company's
common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or
not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending
on, and including, the trading day immediately preceding the date on which the Company provides notice of
redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued
and unpaid interest, if any, to, but excluding, the redemption date. No sinking fund for the notes has been provided.
If the Company undergoes a fundamental change (as defined in the indenture governing the 2030 Notes), holders
may require the Company to repurchase for cash all or any portion of their 2030 Notes at a fundamental change
repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid
interest to, but excluding, the fundamental change repurchase date.
The indenture governing the 2030 Notes includes customary covenants, sets forth certain events of default after
which the notes may be declared immediately due and payable and sets forth certain types of bankruptcy or
insolvency events of default involving the Company after which the notes become automatically due and payable.
The indenture governing the 2030 Notes does not contain any financial or operating covenants or restrictions on the
payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by us or any of
our subsidiaries.
Capped Calls
In connection with the issuance of the 2030 Notes (see Convertible Senior Notes above), the Company entered
into privately negotiated capped call transactions (the Capped Calls) with certain of the initial purchasers of the
2030 Notes or their respective affiliates (the option counterparties) at a cost of approximately $23. The Capped
Calls cover, subject to anti-dilution adjustments, the number of shares of the Company's common stock initially
underlying the 2030 Notes. By entering into the Capped Calls, we expect to reduce the potential dilution to the
Company's common stock (or, in the event a conversion of the 2030 Notes is settled in cash, to reduce our cash
payment obligation) in the event that at the time of conversion of the 2030 Notes the trading price of our common
stock price exceeds the conversion price of the 2030 Notes.
The initial cap sale price of the Capped Calls was approximately $28.34 per share, which represents a premium of
70% over the last reported sale price of our common stock of $16.67 on the NASDAQ Stock Exchange on March 6,
2024, and is subject to certain adjustments under the terms of the Capped Calls. The Capped Calls were recorded
in Additional paid-in capital in the Consolidated Balance Sheet as of December 31, 2024, with no remeasurement in
subsequent periods as it meets the conditions for equity classification. The purchases of the Capped Calls resulted
Xerox 2024 Annual Report 129
in a tax benefit of approximately $6, the impact of which was included in Additional paid-in capital. Refer to Note 17 -
Shareholders' Equity of Xerox Holdings for additional information regarding the Capped Calls.
Use of Aggregate Proceeds from Senior Notes
A portion of the aggregate net proceeds from the Senior Note offerings was used to fund the cost of entering into
the Capped Call transactions (see Convertible Senior Notes above). Additionally, a portion of the aggregate net
proceeds were used to repay, through a tender offer for Senior Notes, approximately $84 of the 3.80% Xerox
Corporation Senior Notes due in 2024 and approximately $362 of the 5.00% Xerox Holdings Corporation Senior
Notes due in 2025. The remaining outstanding 3.80% Senior Notes of $216, that were not redeemed as part of the
Senior Notes tender offer, were repaid in May 2024. In connection with the repayment of the 2024 and 2025 Senior
Notes, we recorded a gain on the extinguishment of the debt of approximately $4, which was partially offset by a
loss of approximately $1 on the write-off of deferred debt issuance costs. The net gain on the extinguishment of $3
was recorded in Other expenses, net.
Xerox Holdings Corporation/Xerox Corporation Intercompany Loan
In March 2024, Xerox Holdings Corporation and Xerox Corporation entered into two intercompany loan agreements
which mirror the terms of Xerox Holdings Corporation's 2029 and 2030 Senior Notes, including principal, interest
rates, payment dates and debt issuance costs of approximately $15 (see the Senior Notes and the Convertible
Senior Notes sections above). As a result, Xerox Corporation recorded approximately $900 of related party debt.
The proceeds of this new intercompany loan were used to partially pay down approximately $362 on the existing
2020 intercompany loan made by Xerox Holdings Corporation to Xerox Corporation.
At December 31, 2024 and 2023, the balance of the Intercompany Loan reported in Xerox Corporation’s
Consolidated Balance Sheet was $2,022 and $1,497, respectively, which is net of related debt issuance costs, and
the intercompany interest payable was $31 and $30, respectively.
Revolving Credit Facility
In May 2023, Xerox Corporation, as borrower, and certain of its subsidiaries, as guarantors, entered into a five-year
asset-based revolving credit agreement (the ABL Facility) with Citibank, N.A., as administrative agent and collateral
agent (the ABL Agent) and several lenders including Citibank N.A. The aggregate outstanding principal amount of
the ABL Facility is payable in full at maturity on May 22, 2028, and there are no scheduled principal payments prior
to maturity. We deferred approximately $7 of debt issuance costs in connection with the ABL Facility, which are
being amortized over the five-year term.
In February 2024, the Company, Xerox Holdings Corporation and the Administrative Agent entered into an
amendment in connection with the delivery of additional guarantees and collateral under the ABL Facility as a result
of the Company’s execution of the TLB, which constituted Material Springer Debt (as defined in the ABL Facility),
and the execution of certain guarantees by subsidiaries of the Company in connection with the TLB.
In June 2024, Xerox Corporation and Xerox Holdings Corporation, entered into Amendment No. 2 to Credit
Agreement (the Amendment) with the ABL agent, and the lenders party thereto. The Amendment amended the ABL
Facility, to (i) increase the commitments of the lenders under the ABL Credit Agreement from $300 to $425 and (ii)
amend the excess availability used to trigger the fixed charge coverage ratio springing covenant from an amount
equal to the greater of (A) $22.5 and (B) 10% of the Line Cap (the lesser of the aggregate amount of Revolving
Commitments and the then-applicable Borrowing Base), to an amount equal to the greater of (A) $31.875 and (B)
10% of the Line Cap.
Under the amended ABL Facility, Xerox Corporation may borrow up to the lesser of (x) $425 and (y) a borrowing
base calculated based on accounts receivable and inventories of the loan parties thereunder as set forth in the ABL
Facility. The ABL Facility includes an uncommitted accordion feature that allows Xerox Corporation to increase the
facility by a total of up to $250, subject to obtaining additional commitments from existing lenders or new lending
institutions. The ABL Facility also includes a $100 letter of credit subfacility. Xerox Corporation's borrowings under
the ABL Facility are supported by guarantees from Xerox Holdings Corporation and certain of Xerox Corporation's
U.S., Canadian, German, Belgian and English subsidiaries, and by security interests in substantially all of the assets
of Xerox Corporation, Xerox Holdings Corporation, and such U.S., Canadian and English subsidiaries (subject to
certain exceptions and limitations set forth in the TLB), and all finance lease receivables of such German and
Belgian subsidiaries.
Xerox 2024 Annual Report 130
At Xerox Corporation’s election, the loans under the amended ABL Facility will bear interest at either:
(1) a fluctuating rate per annum equal to the highest of (A) Citibank’s base rate, (B) a rate of 0.5% in excess of
the “NYFRB” rate, and (C) a rate of 1.0% in excess of one-month Term SOFR, provided that such
fluctuating rate shall not be less than 0.0%, in each case plus an applicable margin (the loans bearing
interest at such fluctuating rate, ABR Loans); or
(2) the one-, three-, or six-month period or (as agreed to by the Agent and the Lenders) such other period, as
selected by the Xerox Corporation, per annum Term SOFR (plus a 0.10% credit spread adjustment),
provided that such rate shall not be less than 0.0%, plus an applicable margin (the loans bearing interest at
such rate Term SOFR Loans).
The applicable margin for ABR loans ranges from 0.5% to 1.0% depending on the Company’s average daily excess
availability. The applicable margin for Term SOFR loans from 1.5% to 2.0% depending on the Company’s average
daily excess availability.
At December 31, 2024, there were no borrowings under the ABL Facility, and approximately $2 of letters of credits
were issued under the facility. During 2024, maximum borrowings under the ABL Facility were $130.
The amended ABL Facility requires the Company to comply with a fixed charge coverage ratio of 1X, as defined in
the ABL Facility, measured as of the last day of each fiscal quarter during which excess availability is less than an
amount equal to the greater of (A) $31.875 and (B) 10% of the Line Cap (the lesser of the aggregate amount of
revolving commitments and the then-applicable borrowing base). Based on the excess availability at December 31,
2024, the fixed charge coverage ratio measurement was not applicable. The amended ABL Facility also contains
negative covenants governing dividends, investments, indebtedness, liens, and other matters customary for similar
facilities.
If an event of default occurs under the amended ABL Facility, the entire principal amount outstanding, together with
all accrued unpaid interest and other amounts owed in respect thereof, may be declared immediately due and
payable, subject, in certain instances, to the expiration of applicable cure periods.
Term Loan B Credit Facility
In November 2023, Xerox Corporation, as borrower, Xerox Holdings Corporation, and certain of Xerox’s
subsidiaries, as guarantors, entered into a first lien term loan credit agreement with Jefferies Finance LLC, as
administrative agent and collateral agent (the TLB Agent), and a syndicate of lenders providing for a first lien senior
secured term loan credit facility (the TLB) to Xerox Corporation of $550, which was fully extended as term loans to
Xerox Corporation at closing. The term loans under this facility included an aggregate original issue discount (OID)
of $17 and debt issuance costs of $9 resulting in net proceeds of approximately $524. The OID and debt issuance
costs were accordingly deferred and will be amortized over the term of the Loans.
Xerox’s obligations under the TLB are supported by, guarantees from the Company and certain of Xerox’s U.S.,
Canadian, German, Belgium, and English subsidiaries, and security interests in substantially all of the assets of
Xerox, the Company, and such U.S., Canadian and English subsidiaries (subject to certain exceptions and
limitations set forth in the TLB), and security interests in the finance lease receivables of such German and Belgium
subsidiaries. Liens in favor of the lenders under the TLB are subject to an intercreditor agreement with the ABL
Agent.
At Xerox’s election, the term loans will bear interest at a per annum rate of either:
(1) a fluctuating rate equal to the highest of (A) a rate of 0.5% in excess of the “NYFRB” rate, (B) the “prime
rate” and (C) a rate of 1.0% in excess of one-month Term SOFR, plus an applicable margin of 3.00%, or
(2) Term SOFR for a one-, three- or six-month interest period or (as agreed to by the Agent and the Lenders)
such other period, as selected by the company (provided that such rate shall not be less than 0.50%), plus
an applicable margin of 4.00%, for Term SOFR term loans, or 3.00% for ABR term loans. There are $523 of
term loans outstanding at December 31, 2024. Currently, $300 of the term loans bears interest at an
average rate of 8.33% through March 31, 2025, and the remaining $223 of the term loans bears interest at
an average rate of 8.36% through January 31, 2025, at which time the interest rate will reset based on
Xerox’s elections.
The term loans are repayable in full at maturity in November 2029 and amortize at a rate of 5% per annum in 2024
and 2025, 7.5% per annum in 2026 and 10% per annum thereafter. If the term loans are voluntarily prepaid in
connection with a Repricing Event (as defined in the TLB) within six months of the closing date, a prepayment
premium of 1% will apply.
Xerox 2024 Annual Report 131
If an event of default occurs under the TLB, the entire principal amount outstanding thereunder, together with all
accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and
payable, subject, in certain instances, to the expiration of applicable cure periods. The TLB also contains customary
excess cash flow and asset sale mandatory prepayments, reporting covenants and negative covenants governing
dividends, investments, indebtedness, liens, and other matters that are customary for similar term loan B facilities.
Secured Borrowings and Collateral
We have entered into secured loan agreements with various financial institutions where we sold finance receivables
and rights to payments under our equipment on operating leases. In certain transactions, the sales were made to
special purpose entities (SPEs), owned and controlled by Xerox, where the SPEs funded the purchase through
amortizing secured loans from the financial institutions. The loans have variable interest rates and expected lives of
approximately 2.5 years, with half projected to be repaid within the first year based on collections of the underlying
portfolio of receivables. For certain loans, we entered into interest rate hedge agreements to either fix or cap the
interest rate over the life of the loan.
The sales of the receivables to the SPEs were structured as "true sales at law," and we received opinions to that
effect from outside legal counsel. However, the transactions were accounted for as secured borrowings as we fully
consolidated the SPEs in our financial statements. As a result, the assets of the SPEs were not available to satisfy
any of our other obligations. Conversely, the credit holders of these SPEs did not have legal recourse to the
Company’s general credit.
Below are the secured assets and obligations held by subsidiaries of Xerox, which are included in our Consolidated
Balance Sheets.
Balance at December 31, 2024
Finance
Receivables,
Net(1)
Equipment on
Operating
Leases, Net
Secured
Debt(2)
Interest Rate(3)
Expected
Maturity
France
November 2023
$
58
$
—
$
70
4.62 %
2026
Total
$
58
$
—
$
70
Balance at December 31, 2023
Finance
Receivables,
Net(1)
Equipment on
Operating
Leases, Net
Secured
Debt(2)
Interest Rate(3)
Expected
Maturity
United States(4)(5)
January 2022
$
209
$
—
$
77
6.82 %
2024
September 2021
89
2
25
6.76 %
2024
Total U.S.
$
298
$
2
$
102
Canada(4)(6)
July 2023
$
86
$
—
$
77
6.74 %
2026
France
November 2023
$
235
$
—
$
182
5.42 %
2026
Total
$
619
$
2
$
361
_____________
(1) Includes (i) Billed portion of finance receivables, net (ii) Finance receivables, net and (iii) Finance receivables due after one year, net as
included in the Consolidated Balance Sheets as of December 31, 2024 and 2023.
(2) Represents principal debt balance and excludes debt issuance costs of $0 and $1 as of December 31, 2024 and 2023, respectively.
(3) Represents the pre-hedged rate - refer to Note 16 - Financial Instruments for additional information regarding hedging of these borrowings.
(4) Secured assets and obligations held by SPEs.
(5) In the second quarter of 2024, we repaid the remaining balance on these secured borrowings.
(6) Prior to entering the new finance receivable sales agreement with De Lage Landen Financial Services Canada Inc. (DLL), in October 2024,
the remaining balance of this secured debt was repaid. Refer to Note 8 - Finance Receivables, Net for additional information related to our
arrangement with DLL.
Xerox 2024 Annual Report 132
Interest
Interest paid on our short-term and long-term debt amounted to $214, $201 and $201 for the years ended
December 31, 2024, 2023 and 2022, respectively. Interest expense and interest income was as follows:
Year Ended December 31,
2024
2023
2022
Interest expense(1) (2)
$
225
$
198
$
199
Interest income(3)
165
207
218
_____________
(1) Includes Equipment financing (Cost of financing) interest as well as non-financing interest expense included in Other expenses, net in the
Consolidated Statements of (Loss) Income.
(2) Interest expense of Xerox Corporation included intercompany expense associated with the Xerox Holdings Corporation/Xerox Corporation
Intercompany Loan of $111, $80 and $80 for the three years ended December 31, 2024, 2023 and 2022, respectively.
(3) Includes Financing income, as well as other interest income that is included in Other expenses, net in the Consolidated Statements of
(Loss) Income.
Equipment financing interest is determined based on an estimated cost of funds, applied against the estimated level
of debt required to support our net finance receivables. The estimated cost of funds is based on the interest cost
associated with actual borrowings determined to be in support of the leasing business. The estimated level of debt
continues to be based on an assumed 7 to 1 leverage ratio of debt/equity as compared to our average finance
receivable balance during the applicable period.
Note 16 – Financial Instruments
We are exposed to market risk from changes in foreign currency exchange rates and interest rates, which could
affect operating results, financial position and cash flows. We manage our exposure to these market risks through
our regular operating and financing activities and, when appropriate, through the use of derivative financial
instruments. These derivative financial instruments are utilized to hedge economic exposures, as well as to reduce
earnings and cash flow volatility resulting from shifts in market rates. We enter into limited types of derivative
contracts, including interest rate swap agreements, interest rate caps, foreign currency spot, forward and swap
contracts and net purchased foreign currency options to manage interest rate and foreign currency exposures. Our
primary foreign currency market exposures include the Euro, U.K. Pound Sterling, and the Japanese Yen. The fair
market values of all our derivative contracts change with fluctuations in interest rates and/or currency exchange
rates and are designed so that any changes in their values are offset by changes in the values of the underlying
exposures. Derivative financial instruments are held solely as risk management tools and not for trading or
speculative purposes. The related cash flow impacts of all of our derivative activities are reflected as cash flows
from operating activities.
We do not believe there is significant risk of loss in the event of non-performance by the counterparties associated
with our derivative instruments because these transactions are executed with a diversified group of major financial
institutions. Further, our policy is to deal only with counterparties having a minimum investment grade or better
credit rating. Credit risk is managed through the continuous monitoring of exposures to such counterparties.
Interest Rate Risk Management
We use interest rate swap and interest rate cap agreements to manage our interest rate exposure and to achieve a
desired proportion of variable and fixed rate debt. These derivatives may be designated as fair value hedges or
cash flow hedges depending on the nature of the risk being hedged. We had no fair value hedges for the three-
year period ended December 31, 2024, 2023, and 2022, respectively.
Cash Flow Hedges
We use interest rate swaps and caps to manage the exposure to variability in the interest rate payments on our
finance receivable secured loan borrowings. The interest rate swaps convert the interest paid on certain loans to a
fixed amount while the caps limit the maximum amount of interest paid.
During first quarter 2024, the following derivatives were dedesignated as cash flow hedges. The net fair value of
these cash flow hedges, which was not material, was recorded in Accumulated Other Comprehensive Loss and
then reclassified to earnings.
Xerox 2024 Annual Report 133
Secured Borrowing
Derivative Type
Notional Amount
France
Cap
43
France
Cap
34
Total
$
77
In September 2024, we entered into two floating-to-fixed interest rate swaps to hedge against interest rate volatility
associated with any of our floating rate debt which was primarily under our Term Loan B Credit Agreement (TLB).
The TLB had an outstanding principal balance of $523 as of December 31, 2024. The following is a summary of our
swaps at December 31, 2024:
Counterparty
Derivative
Type
Principal Debt
Notional
Amount
Expected
Maturity
Fixed Rate
Paid
Floating Rate
Received
Net Fair Value
Mizuho
Swap
175
175
2027
3.271 %
4.604 % $
3
Credit Agricole
Swap
125
125
2027
3.276 %
4.604 %
2
Total
$
300
$
300
$
5
The remaining portion of the TLB of $223 is not hedged, and is subject to interest rate fluctuations. The impact of
these interest rate swaps on interest expense was a net reduction of $1 for the year ended December 31, 2024.
Foreign Exchange Risk Management
We are a global company, and we are exposed to foreign currency exchange rate fluctuations in the normal course
of our business. As a part of our foreign exchange risk management strategy, we use derivative instruments,
primarily forward contracts and purchased option contracts, to hedge the following foreign currency exposures,
thereby reducing volatility of earnings or protecting fair values of assets and liabilities:
•
Foreign currency-denominated assets and liabilities, and
•
Forecasted purchases, and sales in foreign currency.
At December 31, 2024, we had outstanding forward exchange and purchased option contracts with terms of less
than 12 months. At December 31, 2024, approximately 95% of these contracts mature within three months, 3% in
three to six months and 2% in six to twelve months.
There have not been any other material changes in our hedging strategy during 2024.
The following is a summary of the primary hedging positions and corresponding fair values as of December 31,
2024:
Year Ended December 31,
2024
2023
Currencies Hedged (Buy/Sell)
Gross Notional
Value
Fair Value
Asset (Liability)(1)
Gross Notional
Value
Fair Value
Asset (Liability)(1)
Euro/U.K. Pound Sterling
$
337
$
1
$
385
$
3
U.S. Dollar/Euro
342
3
359
(3)
Euro/Canadian Dollar
—
—
169
—
Euro/U.S. Dollar
212
(1)
150
1
Japanese Yen/U.S. Dollar
104
(5)
113
1
Japanese Yen/Euro
52
(1)
60
—
U.S. Dollar/Canadian Dollar
194
—
—
—
Swiss Franc/Euro
19
—
—
—
Euro/Swedish Krona
—
—
—
—
U.K. Pound Sterling/Euro
67
—
36
—
Euro/Danish Krone
—
—
25
—
Canadian Dollar/Euro
19
—
24
—
All Other
64
—
75
—
Total Foreign exchange hedging
$
1,410
$
(3) $
1,396
$
2
_____________
(1)
Represents the net receivable (payable) amount included in the Consolidated Balance Sheet at December 31, 2024 and 2023.
Xerox 2024 Annual Report 134
Foreign Currency Cash Flow Hedges
We designate a portion of our foreign currency derivative contracts as cash flow hedges of our foreign currency-
denominated inventory purchases. All components of each derivative’s gain or loss were included in the
assessment of hedge effectiveness. The amount of ineffectiveness recorded in the Consolidated Statements of
(Loss) Income for these designated cash flow hedges was not material for the three years ended December 31,
2023. The net liability fair value of these contracts was $1 and $2 as of December 31, 2024 and 2023, respectively.
Summary of Derivative Instruments Gains (Losses)
Derivative gains and (losses) affect the income statement based on whether such derivatives are designated as
hedges of underlying exposures. The following is a summary of derivative gains and (losses).
Designated Derivative Instruments Gains (Losses)
The following table provide a summary of gains (losses) on derivative instruments:
Derivative (Loss) Gain Recognized in
OCI (Effective Portion)
(Loss) Gain Reclassified from AOCI to
Income (Effective Portion)
Derivatives in Cash Flow
Hedging Relationships
Year Ended December 31,
Location of Derivative
(Loss) Gain Reclassified
from AOCI into Income
(Effective Portion)
Year Ended December 31,
2024
2023
2022
2024
2023
2022
Foreign exchange contracts –
forwards/options
$
(6) $
(17) $
(41) Cost of sales
$
(9) $
(22) $
(36)
Interest rate contracts
6
(1)
6
Interest expense
(1)
4
1
Total
$
—
$
(18) $
(35)
$
(10) $
(18) $
(35)
For the three years ended December 31, 2024, 2023 and 2022 no amount of ineffectiveness was recorded in the
Consolidated Statements of (Loss) Income for these designated cash flow hedges. All components of each
derivative’s gain or (loss) were included in the assessment of hedge effectiveness.
At December 31, 2024, a net after-tax income of $6 was recorded in Accumulated other comprehensive loss
associated with our cash flow hedging activity. The entire balance is expected to be reclassified into Net income
within the next 12 months, providing an offsetting economic impact against the underlying anticipated transactions.
Non-Designated Derivative Instruments Gains (Losses)
Non-designated derivative instruments are primarily instruments used to hedge foreign currency-denominated
assets and liabilities. They are not designated as hedges since there is a natural offset for the remeasurement of the
underlying foreign currency-denominated asset or liability. The net asset/liability fair value of these contracts was
$(2) and $5 as of December 31, 2024 and 2023, respectively.
The following table provides a summary of gains (losses) on non-designated derivative instruments:
Year Ended December 31,
Derivatives NOT Designated as
Hedging Instruments
Location of Derivative Gain
2024
2023
2022
Foreign exchange contracts –
forwards
Other expense – Currency gains,
net
$
24
$
26
$
17
For the three years ended December 31, 2024, 2023 and 2022, we recorded net currency losses of $15, $28 and
$13, respectively. Net currency gains and losses include the mark-to-market adjustments of the derivatives not
designated as hedging instruments and the related cost of those derivatives, as well as the remeasurement of
foreign currency-denominated assets and liabilities and are included in Other expenses, net.
Xerox 2024 Annual Report 135
Note 17 – Fair Value of Financial Assets and Liabilities
The following table represents assets and liabilities' fair value measured on a recurring basis. The basis for the
measurement at fair value in all cases is Level 2 – Significant Other Observable Inputs.
As of December 31,
2024
2023
Assets
Derivatives
$
11
$
11
Deferred compensation investments in mutual funds
13
14
Total
$
24
$
25
Liabilities
Derivatives
$
8
$
8
Deferred compensation plan liabilities
11
13
Total
$
19
$
21
We utilize the income approach to measure the fair value for our derivative assets and liabilities. The income
approach uses pricing models that rely on market observable inputs such as yield curves, currency exchange rates
and forward prices, and therefore are classified as Level 2.
Fair value for our deferred compensation plan investments in mutual funds is based on quoted market prices for
those funds. Fair value for deferred compensation plan liabilities is based on the fair value of investments
corresponding to employees’ investment selections.
Summary of Other Financial Assets and Liabilities
The estimated fair values of our other financial assets and liabilities were as follows:
December 31, 2024
December 31, 2023
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Cash and cash equivalents
$
576
$
576
$
519
$
519
Accounts receivable, net
796
796
850
850
Short-term debt and current portion of long-term
debt(1)
585
592
567
567
Long-term debt
Xerox Holdings Corporation
$
1,634
$
1,391
$
1,497
$
1,410
Xerox Corporation
1,177
989
1,096
1,023
Xerox - Other Subsidiaries(2)
3
3
117
117
Total Long-term debt
$
2,814
$
2,383
$
2,710
$
2,550
_____________
(1)
Includes $388 of Xerox Corporation related party debt.
(2)
Represents subsidiaries of Xerox Corporation.
The fair value amounts for Cash and cash equivalents and Accounts receivable, net, approximate carrying amounts
due to the short maturities of these instruments. The fair value of Short-term debt, including the current portion of
long-term debt, and Long-term debt was estimated based on the current rates offered to us for debt of similar
maturities (Level 2). The difference between the fair value and the carrying value represents the theoretical net
premium or discount we would pay or receive to retire all debt at such date.
Xerox 2024 Annual Report 136
Note 18 – Employee Benefit Plans
We sponsor numerous defined benefit and defined contribution pension and other post-retirement benefit plans,
primarily retiree health care, in our domestic and international operations. December 31 is the measurement date
for all of our post-retirement benefit plans.
Where legally possible, we have amended our major defined benefit pension plans to freeze current benefits and
eliminate benefit accruals for future service, including our U.S. defined benefit plans, the Canadian Salary Pension
Plan and the U.K. pension plan. In certain non-U.S. plans, we are required to continue to consider salary increases
and inflation in determining the benefit obligation related to prior service.
In December 2023, the Trustees for the U.K. pension plan entered a second insurance buy-in contract, in
accordance with U.K. pension regulations. Insurance buy-in contracts are group annuity contracts that are expected
to provide an income stream to cover a significant majority of the cash flows arising for the plan population with
future contracted payments. However, the benefit obligation remains with the plan and the Company. This contract
is issued by a third-party insurance company with no affiliation to the Company or the plan. The contract was funded
through existing plan assets, with a portion of the premium payments for the policy being deferred until full
liquidation of certain illiquid assets of the plan. The insurance buy-in contract is valued on an insurer pricing basis,
which reflects the purchase price adjusted for changes in discount rates and other actuarial assumptions, which
approximates fair value. The insurance buy-in contract is classified as a Level 3 investment in the Plan Asset tables
below. This buy-in contract was similar to a contract purchased in 2022 that covered a portion of member benefit
payments. The buy-in arrangement also allows for the possible future conversion into a buy-out arrangement where
the insurance company would assume full responsibility for the U.K. pension plan pension obligations, at which time
the Company would derecognize the assets and liabilities of the pension plan and realize a settlement gain or loss
as a component of the net periodic pension cost.
Effective January 1, 2023, we implemented a new defined contribution plan in the Netherlands to provide future
retirement benefits for eligible employees and ceased accruals in the existing pension plan in the Netherlands. We
recorded this change as a curtailment effective December 31, 2022. The benefits accrued prior to 2023 under the
pension plan in the Netherlands remain in a Collective Defined Contribution (CDC) plan. From a Company risk
perspective, this plan operates just like a defined contribution plan as the Company is only responsible for a
contribution for annual benefit accruals under 5-year agreements through 2022. Although the Company's risk has
been mitigated, under U.S. GAAP this plan doesn’t meet the definition of a defined contribution plan and therefore it
continues to be accounted for as a defined benefit plan.
Xerox 2024 Annual Report 137
Pension Benefits
U.S. Plans
Non-U.S. Plans
Retiree Health
2024
2023
2024
2023
2024
2023
Change in Benefit Obligation:
Benefit obligation, January 1
$
2,389
$
2,345
$
4,567
$
4,240
$
193
$
209
Service cost
—
—
5
5
1
1
Interest cost
88
116
182
188
8
10
Plan participants' contributions
—
—
1
1
5
7
Actuarial (gain) loss(1)
(136)
75
(281)
165
(3)
(5)
Currency exchange rate changes
—
—
(157)
205
(8)
2
Plan amendment
—
—
54
36
—
(3)
Benefits paid/settlements
(165)
(147)
(274)
(273)
(23)
(28)
Other
—
—
—
—
—
—
Benefit Obligation, December 31
$
2,176
$
2,389
$
4,097
$
4,567
$
173
$
193
Change in Plan Assets:
Fair value of plan assets, January 1
$
1,528
$
1,518
$
4,662
$
4,594
$
—
$
—
Actual return on plan assets
(56)
104
(42)
89
—
—
Employer contributions
100
53
27
28
18
21
Plan participants' contributions
—
—
1
1
5
7
Currency exchange rate changes
—
—
(154)
223
—
—
Benefits paid/settlements
(165)
(147)
(274)
(273)
(23)
(28)
Fair Value of Plan Assets, December 31
$
1,407
$
1,528
$
4,220
$
4,662
$
—
$
—
Net Funded Status at December 31(2)
$
(769) $
(861) $
123
$
95
$
(173) $
(193)
Amounts Recognized in the Consolidated Balance
Sheets:
Other long-term assets
$
—
$
—
$
421
$
423
$
—
$
—
Accrued compensation and benefit costs
(22)
(24)
(18)
(20)
(19)
(22)
Pension and other benefit liabilities
(747)
(837)
(280)
(308)
—
—
Post-retirement medical benefits
—
—
—
—
(154)
(171)
Net Amounts Recognized
$
(769) $
(861) $
123
$
95
$
(173) $
(193)
Accumulated Benefit Obligation
$
2,176
$
2,389
$
4,049
$
4,526
_____________
(1)
Changes in actuarial (gains) losses are primarily due to changes in discount rates.
(2)
Includes under-funded and unfunded plans.
Pension and other benefit liabilities include the following additional accounts at December 31st:
December 31,
2024
2023
Pension liabilities(1)
$
1,027
$
1,145
Accrued compensation liabilities
48
56
Deferred compensation liabilities(2)
13
15
Pension and other benefit liabilities
$
1,088
$
1,216
__________________________
(1)
Reflects pension net funded status liability for both U.S. and non-U.S. plans.
(2)
Includes amounts measured at fair value on a recurring basis at December 31, 2024 and 2023 of $11 and $13, respectively. Refer to Note
17 - Fair Value of Financial Assets and Liabilities for additional information regarding deferred compensation liabilities.
Benefit plans pre-tax amounts recognized in AOCL at December 31st:
Pension Benefits
U.S. Plans
Non-U.S. Plans
Retiree Health
2024
2023
2024
2023
2024
2023
Net actuarial loss (gain)
$
700
$
731
$
1,405
$
1,551
$
(63) $
(73)
Prior service cost (credit)
—
—
177
134
(66)
(82)
Total loss (gain) - Pre-tax
$
700
$
731
$
1,582
$
1,685
$
(129) $
(155)
Xerox 2024 Annual Report 138
Aggregate information for pension plans with an accumulated benefit obligation in excess of plan assets is
presented below. Information for Retiree Health plans with an accumulated post-retirement benefit obligation in
excess of plan assets has been disclosed in the preceding table on Benefit obligations and Net funded status as all
Retiree Health plans are unfunded.
December 31, 2024
December 31, 2023
Accumulated
Benefit Obligation
Fair Value of
Plan Assets
Accumulated
Benefit Obligation
Fair Value of
Plan Assets
Underfunded Plans:
U.S.
$
1,956
$
1,407
$
2,146
$
1,528
Non-U.S.
13
39
46
40
Unfunded Plans:
U.S.
$
220
$
—
$
243
$
—
Non-U.S.
286
—
317
—
Total Underfunded and Unfunded Plans:
U.S.
$
2,176
$
1,407
$
2,389
$
1,528
Non-U.S.
299
39
363
40
Total
$
2,475
$
1,446
$
2,752
$
1,568
Aggregate information for pension plans with a projected benefit obligation in excess of plan assets is presented
below:
December 31, 2024
December 31, 2023
Projected Benefit
Obligation
Fair Value of
Plan Assets
Projected Benefit
Obligation
Fair Value of
Plan Assets
Underfunded Plans:
U.S.
$
1,956
$
1,407
$
2,146
$
1,528
Non-U.S.
45
39
47
40
Unfunded Plans:
U.S.
$
220
$
—
$
243
$
—
Non-U.S.
292
—
322
—
Total Underfunded and Unfunded Plans:
U.S.
$
2,176
$
1,407
$
2,389
$
1,528
Non-U.S.
337
39
369
40
Total
$
2,513
$
1,446
$
2,758
$
1,568
Pension plan assets and benefit obligations by country were as follows:
December 31, 2024
December 31, 2023
Fair Value of
Pension Plan
Assets
Projected
Benefit
Obligation
Net Funded
Status
Fair Value of
Pension Plan
Assets
Projected
Benefit
Obligation
Net Funded
Status
U.S. funded
$
1,407
$
1,956
$
(549) $
1,528
$
2,146
$
(618)
U.S. unfunded
—
220
(220)
—
243
(243)
Total U.S.
1,407
2,176
(769)
1,528
2,389
(861)
U.K.
2,528
2,310
218
2,892
2,655
237
Netherlands
808
732
76
839
769
70
Canada
535
503
32
586
562
24
Germany
—
220
(220)
—
248
(248)
Other
349
332
17
345
333
12
Total
$
5,627
$
6,273
$
(646) $
6,190
$
6,956
$
(766)
Xerox 2024 Annual Report 139
The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as
follows:
Year Ended December 31,
Pension Benefits
U.S. Plans
Non-U.S. Plans
Retiree Health
2024
2023
2022
2024
2023
2022
2024
2023
2022
Components of Net Periodic
Benefit Costs:
Service cost
$
—
$
—
$
1
$
5
$
5
$
16
$
1
$
1
$
1
Interest cost (income)(1)
88
116
(65)
182
188
123
8
10
8
Expected return on plan assets(2)
(71)
(103)
71
(193)
(217)
(226)
—
—
—
Recognized net actuarial loss (gain)
18
16
13
62
11
23
(12)
(12)
(4)
Amortization of prior service cost
(credit)
—
—
—
8
5
1
(15)
(15)
(8)
Recognized settlement loss
5
19
56
—
1
—
—
—
—
Recognized curtailment gain
—
—
—
—
—
(4)
—
—
—
Defined Benefit Plans
40
48
76
64
(7)
(67)
(18)
(16)
(3)
Defined contribution plans
17
19
20
23
21
17
n/a
n/a
n/a
Net Periodic Benefit Cost (Credit)
$
57
$
67
$
96
$
87
$
14
$
(50) $
(18) $
(16) $
(3)
Other changes in plan assets and
benefit obligations recognized in
Other Comprehensive Loss:
Net actuarial (gain) loss
$
(8) $
74
$
16
$
(44) $
298
$
368
$
(3) $
(5) $
(57)
Prior service cost (credit)
—
—
—
52
36
72
—
(3)
(26)
Amortization of net actuarial (loss)
gain
(23)
(35)
(69)
(62)
(12)
(23)
12
12
4
Amortization of net prior service
(cost) credit
—
—
(8)
(5)
(1)
15
15
15
Curtailment gain
—
—
—
—
—
4
—
—
—
Total Recognized in Other
Comprehensive Loss(3)
$
(31) $
39
$
(53) $
(62) $
317
$
420
$
24
$
19
$
(64)
Total Recognized in Net Periodic
Benefit Cost (Credit) and Other
Comprehensive Loss
$
26
$
106
$
43
$
25
$
331
$
370
$
6
$
3
$
(67)
_____________
(1)
Interest cost for Pension Benefits includes interest expense on non-TRA obligations of $279, $284 and $205 and interest (income)/expense
directly allocated to TRA participant accounts of $(9), $20 and $(147) for the years ended December 31, 2024, 2023 and 2022, respectively.
(2)
Expected return on plan assets includes expected investment income on non-TRA assets of $273, $300 and $302 and actual investment
(loss)/income on TRA assets of $(9), $20 and $(147) for the years ended December 31, 2024, 2023 and 2022, respectively.
(3)
Amounts represent the pre-tax effect included in Other comprehensive loss. Refer to Note 24 - Other Comprehensive Loss for the related
tax effects and the net of tax amounts.
Plan Amendments
Pension:
Netherlands
In January 2024, the pension board of our Netherlands pension plan transferred the plan’s assets and projected
benefit obligation (PBO) to a single client section in a general pension fund. In addition to this transfer, the
indexation target was increased from 75% of price inflation to 100% of price inflation. This plan amendment
increasing the indexation target resulted in an increase of approximately $48 (approximately EUR 44 million) in the
PBO for this Collective Defined Contribution (CDC) plan, approximately 6% of the plan PBO as of December 31,
2023. From a Company risk perspective, this CDC plan operates just like a frozen defined contribution plan.
Although the Company's risk has been mitigated, under U.S. GAAP this CDC plan does not meet the definition of a
defined contribution plan and therefore continues to be accounted for as a defined benefit plan.
United Kingdom
In April 2024, 2023 and 2022, our U.K. defined benefit pension plan was amended, at the sole discretion of the Plan
Trustees as legally allowed, to increase the capped inflation indexation for the April 2024, 2023 and 2022 pension
increase award to 5%, 6.5% and 7.5%, respectively. The April 2024 plan amendment resulted in an increase of $6 in
the projected benefit obligation (PBO) for this plan, the April 2023 plan amendment resulted in an increase of $36 in
the projected benefit obligation (PBO) for this plan, and the April 2022 plan amendment resulted in an increase of
Xerox 2024 Annual Report 140
approximately $72 in the PBO for this plan, with all amounts inclusive of other remeasurement adjustments for
changes in actuarial assumptions.
In October 2018, the High Court of Justice in the United Kingdom (the High Court) ruled that Lloyds Bank PLC was
required to equalize benefits payable to men and women under its U.K. defined benefit pension plans by amending
those plans to increase the pension benefits payable to participants that accrued such benefits during the period
from 1990 to 1997. The inequalities arose from statutory differences in the retirement ages and rates of accrual of
benefits for men and women related to Guaranteed Minimum Pension (GMP) benefits that are included in U.K.
defined benefit pension plans.
At December 31, 2024, the aggregate cost for this matter was estimated to be approximately GBP 15 million
(approximately USD $19). This latest estimate is consistent with the prior year, adjusted for market conditions at
December 31, 2024. The equalization method was agreed between the Company and Trustee and is in the process
of being implemented.
Retiree Health Plans:
During 2022, we amended our U.S. Retiree Health Plan to reduce benefits and eliminate coverage for existing union
retirees and for certain union employees as a result of contract negotiations. These negative plan amendments
resulted in a reduction of approximately $30 in the Company's postretirement benefit obligation.
Plan Assets
Current Allocation
As of the 2024 and 2023 measurement dates, the global pension plan assets were $5,627 and $6,190, respectively.
These assets were invested among several asset classes.
The following tables present the defined benefit plans assets measured at fair value and the basis for that
measurement.
December 31, 2024
U.S. Plans
Non-U.S. Plans
Asset Class
Level 1
Level 2
Level 3
Assets
measured
at NAV(1)
Total
Level 1
Level 2
Level 3
Assets
measured
at NAV(1)
Total
Cash and cash equivalents
$
1
$
—
$
—
$
—
$
1
$
246
$
—
$
—
$
—
$ 246
Equity Securities:
U.S.
72
—
—
—
72
15
19
—
—
34
International
72
—
—
125
197
314
—
—
18
332
Fixed Income Securities:
U.S. treasury securities
—
67
—
—
67
—
2
—
—
2
Debt security issued by
government agency
—
139
—
—
139
—
670
—
—
670
Corporate bonds
—
599
—
—
599
—
236
—
—
236
Derivatives
—
(30)
—
—
(30)
—
13
—
—
13
Real estate
—
—
24
11
35
—
—
87
31
118
Private equity/venture capital
—
—
—
167
167
—
—
—
258
258
Guaranteed insurance
contracts
—
—
—
—
—
—
—
2,184
—
2,184
Other(2)(3)(4)
(3)
—
—
163
160
51
12
—
64
127
Total Fair Value of Plan
Assets
$
142
$
775
$
24
$
466
$ 1,407
$
626
$
952
$ 2,271
$
371
$ 4,220
_____________
(1)
Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the
fair value hierarchy.
(2)
Other Level 1 includes net non-financial (liabilities)/assets, such as due to/from broker, interest receivables and accrued expenses. The U.S.
Plans had net liabilities of $(3), while the non-U.S. plans had net assets of $51.
(3)
Other NAV for U.S. Plans (measured at NAV) includes mutual funds of $116, which are invested approximately 70% in fixed income
securities and approximately 30% in equity securities.
(4)
Other NAV for the non-U.S. Plans (measured at NAV) includes mortgage funds of $64 in our Netherlands plans.
Xerox 2024 Annual Report 141
December 31, 2023
U.S. Plans
Non-U.S. Plans
Asset Class
Level 1
Level 2
Level 3
Assets
measured
at NAV(1)
Total
Level 1
Level 2
Level 3
Assets
measured
at NAV(1)
Total
Cash and cash equivalents
$
1
$
—
$
—
$
—
$
1
$
452
$
—
$
—
$
—
$ 452
Equity Securities:
U.S.
48
—
—
—
48
13
20
—
—
33
International
87
—
—
127
214
315
—
—
27
342
Fixed Income Securities:
U.S. treasury securities
—
74
—
—
74
—
2
—
—
2
Debt security issued by
government agency
—
134
—
—
134
—
546
—
—
546
Corporate bonds
—
660
—
—
660
—
197
—
—
197
Derivatives
—
57
—
—
57
—
90
—
—
90
Real estate
—
—
47
12
59
—
—
106
70
176
Private equity/venture
capital
—
—
—
157
157
—
—
4
311
315
Guaranteed insurance
contracts
—
—
—
—
—
—
—
2,481
—
2,481
Other(2)(3)
(18)
—
—
142
124
24
4
—
—
28
Total Fair Value of Plan
Assets
$
118
$
925
$
47
$
438
$ 1,528
$
804
$
859
$ 2,591
$
408
$ 4,662
_____________
(1)
Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the
fair value hierarchy.
(2)
Other Level 1 includes net non-financial (liabilities)/assets, such as due to/from broker, interest receivables and accrued expenses. The U.S.
Plans had net liabilities of $(18), while the non-U.S. plans had net assets of $24.
(3)
Other NAV includes mutual funds of $92 (measured at NAV) which are invested approximately 70% in fixed income securities and
approximately 30% in equity securities.
The following tables represents a rollforward of the defined benefit plans assets measured at fair value using
significant unobservable inputs (Level 3 assets):
U.S.
Non-U.S.
Real Estate
Real Estate
Private Equity/
Venture Capital
Guaranteed
Insurance
Contracts
Total
Balance at December 31, 2022
$
57
$
144
$
4
$
483
$
631
Purchases
—
—
—
1,951
1,951
Sales
(13)
(16)
—
(3)
(19)
Unrealized gains (losses)
3
(31)
—
(9)
(40)
Currency translation
—
9
—
59
68
Balance at December 31, 2023
$
47
$
106
$
4
$
2,481
$
2,591
Purchases
—
—
—
1
1
Sales
(22)
—
—
(3)
(3)
Unrealized losses
(1)
(12)
(4)
(253)
(269)
Currency translation
—
(7)
—
(42)
(49)
Balance at December 31, 2024
$
24
$
87
$
—
$
2,184
$
2,271
Level 3 Valuation Method
Our primary Level 3 assets are Real Estate, Private Equity/Venture Capital investments, and Guaranteed Insurance
Contracts. The fair value of our real estate investment funds is based on the Net Asset Value (NAV) of our
ownership interest in the funds. NAV information is received from the investment advisers and is primarily derived
from third-party real estate appraisals for the properties owned. The fair value for our private equity/venture capital
partnership investments are based on our share of the estimated fair values of the underlying investments held by
these partnerships as reported (or expected to be reported) in their audited financial statements. 2022 and 2023
purchases of Guaranteed Insurance Contracts (GICs) include the purchases of buy-in annuity contracts, which have
been valued based on the member benefits covered by the contracts adjusted for current market factors. The
valuation techniques and inputs for our Level 3 assets have been consistently applied for all periods presented.
Xerox 2024 Annual Report 142
Investment Strategy
The target asset allocations for our worldwide defined benefit pension plans were:
2024
2023
U.S.
Non-U.S.(2)
U.S.
Non-U.S.
Equity investments(1)
27%
9%
24%
8%
Fixed income investments
60%
22%
60%
16%
Real estate
4%
3%
6%
4%
Private equity/venture capital
7%
7%
8%
8%
Other(1)
2%
59%
2%
64%
Total Investment Strategy
100%
100%
100%
100%
_____________
(1)
Target allows for an additional allocation to synthetic equity which is offset by cash, which resulted in a negative cash position in Other.
(2)
Significant changes in asset allocation in non-U.S. are due to the U.K. pension plan entering an insurance buy-in contract, which is included
in Other.
We employ a total return investment approach whereby a mix of equities and fixed income investments are used to
maximize the long-term return of plan assets for a prudent level of risk. The intent of this strategy is to minimize plan
expenses by exceeding the interest growth in long-term plan liabilities. Risk tolerance is established through careful
consideration of plan liabilities, plan funded status and corporate financial condition. This consideration involves the
use of long-term measures that address both return and risk. The investment portfolio contains a diversified blend of
equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S.
stocks, as well as growth, value and small and large capitalizations. Other assets such as real estate, private equity,
and hedge funds are used to improve portfolio diversification. Derivatives may be used to hedge market exposure in
an efficient, timely and cost-effective manner; however, derivatives may not be used to speculate or leverage the
portfolio beyond the market value of the underlying investments. Investment risks and returns are measured and
monitored on an ongoing basis through annual liability measurements and quarterly investment portfolio reviews.
Expected Long-term Rate of Return
We employ a “building block” approach in determining the long-term rate of return for plan assets. Historical markets
are studied and long-term relationships between equities and fixed income are assessed. Current market factors
such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. The
long-term portfolio return is established giving consideration to investment diversification and rebalancing. Peer data
and historical returns are reviewed periodically to assess reasonableness and appropriateness.
Contributions Disclosure
The following table summarizes cash contributions to our defined benefit pension plans and retiree health benefit
plans.
Year Ended December 31,
2024
Estimated
2025
U.S. Plans
$
100
$
110
Non-U.S. Plans
27
30
Total Pension Plans
$
127
$
140
Retiree Health
18
20
Total Retirement Plans
$
145
$
160
Approximately $77 of the 2024 contributions for our U.S. plans were for our tax-qualified defined benefit plans.
Approximately $85 of estimated contributions for 2025 are for our U.S. tax-qualified defined benefit plans. However,
once the next actuarial valuations and projected results are available, actual contributions required to meet
minimum funding requirements will be determined and finalized and may change from the current estimate.
Xerox 2024 Annual Report 143
Estimated Future Benefit Payments
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid
during the following years:
Pension Benefits
U.S.
Non-U.S.
Total
Retiree Health
2025
$
204
$
272
$
476
$
20
2026
181
278
459
18
2027
184
282
466
16
2028
181
290
471
15
2029
183
297
480
14
Years 2030-2034
949
1,562
2,511
56
Assumptions
Weighted-average assumptions used to determine benefit obligations at the plan measurement dates:
Pension Benefits
2024
2023
2022
U.S.
Non-U.S.
U.S.
Non-U.S.
U.S.
Non-U.S.
Discount rate
5.6 %
4.5 %
4.9 %
4.1 %
5.1 %
4.5 %
Rate of compensation increase
— %
2.3 %
— %
2.7 %
— %
2.9 %
Interest crediting rate
4.6 %
2.5 %
4.5 %
2.5 %
4.5 %
1.5 %
Retiree Health
2024
2023
2022
Discount rate
4.9 %
4.7 %
5.0 %
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Pension Benefits
2025
2024
2023
2022
U.S.
Non-U.S.
U.S.
Non-U.S.
U.S.
Non-U.S.
U.S.
Non-U.S.
Discount rate
5.6 %
4.5 %
4.9 %
4.1 %
5.1 %
4.5 %
2.7 %
1.8 %
Expected return on plan assets
7.8 %
4.8 %
8.1 %
4.3 %
8.1 %
4.3 %
5.9 %
3.2 %
Rate of compensation increase
— %
2.3 %
— %
2.7 %
— %
2.9 %
0.1 %
2.8 %
Interest crediting rate
4.6 %
2.6 %
4.5 %
2.5 %
4.5 %
2.1 %
2.5 %
1.5 %
Retiree Health
2025
2024
2023
2022
Discount rate
4.9 %
4.7 %
5.0 %
2.7 %
_____________
Note: Expected return on plan assets is not applicable to retiree health benefits as these plans are not funded. Rate of compensation increase is
not applicable to retiree health benefits as compensation levels do not impact earned benefits.
Assumed health care cost trend rates were as follows:
December 31,
2024
2023
Health care cost trend rate assumed for next year
6.0 %
6.3 %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
4.2 %
4.2 %
Year that the rate reaches the ultimate trend rate
2028
2028
Defined Contribution Plans
We have post-retirement savings and investment plans in several countries, including the U.S., the U.K. and
Canada. In many instances, employees who participated in the defined benefit pension plans that have been
amended to freeze future service accruals were transitioned to an enhanced defined contribution plan. In these
plans, employees are allowed to contribute a portion of their salaries and bonuses to the plans, and we match a
portion of the employee contributions. We recorded charges related to our defined contribution plans of $40 in 2024,
$40 in 2023 and $37 in 2022.
During 2021, the Company suspended its full year employer matching contribution for its U.S. based 401(k) plan for
salaried (non-union) employees. The employer matching contribution was reinstated for 2022 and was made in the
first quarter of 2023.
Xerox 2024 Annual Report 144
Note 19 - Income and Other Taxes
Loss before income taxes was as follows:
Year Ended December 31,
2024
2023
2022
Domestic loss
$
(877) $
(89) $
(319)
Foreign (loss) income
(339)
61
(6)
Loss before Income taxes
$
(1,216) $
(28) $
(325)
The components of Income tax expense (benefit) were as follows:
Year Ended December 31,
2024
2023
2022
Federal Income Taxes
Current
$
(15) $
21
$
(5)
Deferred
(44)
(65)
(16)
Foreign Income Taxes
Current
34
18
23
Deferred
149
21
(2)
State Income Taxes
Current
(4)
—
6
Deferred
(15)
(24)
(9)
Income tax expense (benefit)
$
105
$
(29) $
(3)
A reconciliation of the U.S. federal statutory income tax rate to the consolidated effective income tax rate was as
follows:
Year Ended December 31,
2024
2023
2022
U.S. federal statutory income tax rate
21.0 %
21.0 %
21.0 %
Nondeductible expenses
(0.8) %
(32.2) %
(3.6) %
Effect of tax law changes
— %
— %
0.1 %
Change in valuation allowance for deferred tax assets
(16.0) %
15.6 %
(2.2) %
State taxes, net of federal benefit
1.0 %
(21.9) %
0.3 %
Audit and other tax return adjustments
0.6 %
83.0 %
(1.6) %
Tax-exempt income, credits and incentives
1.1 %
59.0 %
8.7 %
Foreign rate differential adjusted for U.S. taxation of foreign profits(1)
(0.5) %
(32.3) %
(0.1) %
Stock-based compensation
(0.2) %
(13.0) %
(0.6) %
Goodwill impairment
(15.3) %
— %
(22.0) %
Divestitures
0.2 %
25.3 %
— %
Other
0.3 %
(0.9) %
0.9 %
Effective income tax rate
(8.6) %
103.6 %
0.9 %
_____________
(1)
The “U.S. taxation of foreign profits” represents the U.S. tax, net of foreign tax credits, associated with actual and deemed repatriations of
earnings from our non-U.S. subsidiaries.
On a consolidated basis, we paid a total of $65, $51 and $50 in income taxes to federal, foreign and state
jurisdictions during the three years ended December 31, 2024, 2023 and 2022, respectively.
Income taxes were allocated to the following items:
Year Ended December 31,
2024
2023
2022
Income tax expense (benefit) on Loss before income taxes
$
105
$
(29) $
(3)
Income tax (expense) benefit Common shareholders' equity:
Changes in defined benefit plans
(10)
93
70
Cash flow hedges
(1)
1
(1)
Translation adjustments
(8)
—
—
Additional paid-in capital
6
—
—
Xerox 2024 Annual Report 145
Unrecognized Tax Benefits and Audit Resolutions
We recognize tax liabilities when, despite our belief that our tax return positions are supportable, we believe that
certain positions may not be fully sustained upon review by tax authorities. Each period, we assess uncertain tax
positions for recognition, measurement and effective settlement. Benefits from uncertain tax positions are measured
at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement - the more-
likely-than-not recognition threshold. Where we have determined that our tax return filing position does not satisfy
the more likely than not recognition threshold, we have recorded no tax benefit. These assessments require the use
of considerable estimates and judgments and can increase or decrease our effective tax rate, as well as impact our
operating results. A difference in the ultimate resolution of uncertain tax positions from what is currently estimated
could have a material impact on our results of operations and financial condition.
The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and
regulations in a variety of jurisdictions. We are also subject to ongoing tax examinations in numerous jurisdictions
due to the extensive geographical scope of our operations. As a result, we have received, and may in the future
receive, proposed tax adjustments and tax assessments in multiple jurisdictions. We regularly assess the likelihood
of the outcomes resulting from these ongoing tax examinations as part of our continuing assessment of uncertain
tax positions to determine our provision for income taxes. The specific timing of when the resolution of each tax
position will be reached is uncertain. As of December 31, 2024, we do not believe that there are any positions for
which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or
decrease within the next 12 months.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
2024
2023
2022
Balance at January 1
$
140
$
110
$
107
Additions related to current year
1
1
3
Additions related to prior years positions
—
57
4
Reductions related to prior years positions
—
(14)
—
Settlements with taxing authorities(1)
(29)
(13)
—
Reductions related to lapse of statute of limitations
(18)
(2)
(3)
Currency
1
1
(1)
Balance at December 31
$
95
$
140
$
110
_____________
(1)
The majority of settlements did not result in the utilization of cash.
Included in the balances at December 31, 2024, 2023 and 2022 are $(2), $(31) and $1, respectively, of tax positions
that are highly certain of realizability but for which there is uncertainty about the timing or that they may be reduced
through an indirect benefit from other taxing jurisdictions. Because of the impact of deferred tax accounting, other
than for the possible incurrence of interest and penalties, the disallowance of these positions would not affect the
annual effective tax rate.
Within income tax expense, we recognize interest and penalties accrued on unrecognized tax benefits, as well as
interest received from favorable settlements. We had $0, $(2) and $(1) accrued for the payment of interest and
penalties associated with unrecognized tax benefits at December 31, 2024, 2023 and 2022, respectively.
In the U.S., we are no longer subject to U.S. federal income tax examinations for years before 2017. With respect to
our major foreign jurisdictions, we are no longer subject to tax examinations by tax authorities for years before 2017.
Deferred Income Taxes
At December 31, 2024 we have not provided deferred taxes on our undistributed pre-1987 E&P of approximately
$292, as such undistributed earnings have been determined to be indefinitely reinvested and we currently do not
plan to initiate any action that would precipitate a deferred tax impact. The net change from the amount at
December 31, 2023 of $310 was predominately due to currency impacts as well as the disposition of certain foreign
subsidiaries. Additionally, we have also not provided deferred taxes on the outside basis differences in our
investments in foreign subsidiaries that are unrelated to undistributed earnings. These basis differences are also
indefinitely reinvested. A determination of the unrecognized deferred taxes related to these components is not
practicable.
Xerox 2024 Annual Report 146
The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows:
December 31,
2024
2023
Deferred Tax Assets
Research and development
$
227
$
225
Post-retirement medical benefits
43
50
Net operating losses
322
384
Operating reserves, accruals and deferrals
232
215
Tax credit carryforwards
80
106
Deferred and share-based compensation
22
40
Pension
122
147
Finance lease and installment sales
64
—
Operating lease liabilities
33
43
Other
68
57
Subtotal
1,213
1,267
Valuation allowance
(511)
(375)
Total
$
702
$
892
Deferred Tax Liabilities
Finance lease and installment sales
$
—
$
36
Intangibles and goodwill
84
116
Unremitted earnings of foreign subsidiaries
26
25
Operating lease ROU assets
41
41
Other
21
24
Total
$
172
$
242
Total Deferred taxes, net
$
530
$
650
Reconciliation to the Consolidated Balance Sheets
Deferred tax assets
$
615
$
745
Deferred tax liabilities(1)
(85)
(95)
Total Deferred taxes, net
$
530
$
650
_____________
(1)
Represents the deferred tax liabilities recorded in Other long-term liabilities - refer to Note 14 - Supplementary Financial Information.
We record the estimated future tax effects of temporary differences between the tax basis of assets and liabilities
and the amounts reported, as well as net operating loss and tax credit carryforwards. Deferred tax assets are
assessed for realizability and, where applicable, a valuation allowance is recorded to reduce the total deferred tax
asset to an amount that will, more-likely-than-not, be realized in the future. We apply judgment in assessing the
realizability of these deferred tax assets and the need for any valuation allowances. In determining the amount of
deferred tax assets that are more-likely-than-not to be realized, we considered historical profitability, projected future
taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies.
The deferred tax assets requiring significant judgment are U.S. tax credit carryforwards with a limited life.
The net change in the total valuation allowance for the three years ended December 31, 2024, 2023 and 2022 was
an increase of $136, $9 and $9, respectively. The valuation allowance relates primarily to certain net operating loss
carryforwards, tax credit carryforwards and deductible temporary differences for which we have concluded it is
more-likely-than-not that these items will not be realized in the ordinary course of operations.
Although realization is not assured, we have concluded that it is more-likely-than-not that the deferred tax assets,
for which a valuation allowance was determined to be unnecessary, will be realized in the ordinary course of
operations based on the available positive and negative evidence, including scheduling of deferred tax liabilities and
projected income from operating activities. The amount of the net deferred tax assets considered realizable,
however, could change in the near term if future income or income tax rates are higher or lower than currently
estimated, or if there are differences in the timing or amount of future reversals of existing taxable or deductible
temporary differences.
At December 31, 2024, we had tax credit carryforwards of $80 available to offset future income taxes, of which $1 is
available to carryforward indefinitely while the majority of the remaining $79 will begin to expire in 2025 and 2026, if
not utilized. We also had net operating loss carryforwards for income tax purposes of $473 that will begin to expire
in 2024 through 2043, if not utilized, and $1.4 billion available to offset future taxable income indefinitely.
Xerox 2024 Annual Report 147
Note 20 – Contingencies and Litigation
We are involved in a variety of claims, lawsuits, investigations and proceedings concerning: securities law;
governmental entity contracting, servicing and procurement law; intellectual property law; environmental law;
employment law; the Employee Retirement Income Security Act (ERISA); and other laws and regulations. We
determine whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed
probable and can be reasonably estimated. We assess our potential liability by analyzing our litigation and
regulatory matters using available information. We develop our views on estimated losses in consultation with
outside counsel handling our defense in these matters, which involves an analysis of potential results, assuming a
combination of litigation and settlement strategies. Should developments in any of these matters cause a change in
our determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should
any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a
material adverse effect on our results of operations, cash flows and financial position in the period or periods in
which such change in determination, judgment or settlement occurs.
Additionally, guarantees, indemnifications and claims may arise during the ordinary course of business from
relationships with suppliers, customers and nonconsolidated affiliates, as well as through divestitures and sales of
businesses, when the Company undertakes an obligation to guarantee the performance of others if specified
triggering events occur. Nonperformance under a contract could trigger an obligation of the Company. These
potential claims include actions based upon alleged exposures to products, real estate, intellectual property such as
patents, environmental matters, and other indemnifications. The ultimate effect on future financial results is not
subject to reasonable estimation because considerable uncertainty exists as to the final outcome of these claims.
However, while the ultimate liabilities resulting from such claims may be significant to results of operations in the
period recognized, management does not anticipate they will have a material adverse effect on the Company's
consolidated financial position or liquidity. As of December 31, 2024, we have accrued our estimate of liability
incurred under our indemnification arrangements and guarantees.
Brazil Contingencies
Our Brazilian operations have received or been the subject of numerous governmental assessments related to
indirect and other taxes. These tax matters principally relate to claims for taxes on the internal transfer of inventory,
municipal service taxes on rentals and gross revenue taxes. We are disputing these tax matters and intend to
vigorously defend our positions. Based on the opinion of legal counsel and current reserves for those matters
deemed probable of loss, we do not believe that the ultimate resolution of these matters will materially impact our
results of operations, financial position or cash flows. Below is a summary of our Brazilian tax contingencies:
December 31,
2024
December 31,
2023
Tax contingency - unreserved
$
305
$
375
Escrow cash deposits
18
24
Surety bonds
88
104
Letters of credit
10
22
Liens on Brazilian assets
—
—
The decrease in the unreserved portion of the tax contingency, inclusive of any related interest, was primarily
related to currency, partially offset by interest. With respect to the unreserved tax contingency, the majority has been
assessed by management as being remote as to the likelihood of ultimately resulting in a loss to the Company. In
connection with the above proceedings, customary local regulations may require us to make escrow cash deposits
or post other security of up to half of the total amount in dispute, as well as additional surety bonds and letters of
credit, which include associated indexation. Generally, any escrowed amounts would be refundable and any liens
on assets would be removed to the extent the matters are resolved in our favor. We are also involved in certain
disputes with contract and former employees. Exposures related to labor matters are not material to the financial
statements as of December 31, 2024 and 2023. We routinely assess all these matters as to probability of ultimately
incurring a liability against our Brazilian operations and record our best estimate of the ultimate loss in situations
where we assess the likelihood of an ultimate loss as probable.
Xerox 2024 Annual Report 148
Litigation Matters
Miami Firefighters’ Relief & Pension Fund v. Icahn, et al.:
On December 13, 2019, shareholder Miami Firefighters’ Relief & Pension Fund (Miami Firefighters) filed a derivative
complaint in New York State Supreme Court, New York County on behalf of Xerox Holdings Corporation (Xerox
Holdings) against Carl Icahn and his affiliated entities High River Limited Partnership and Icahn Capital LP (the
Icahn defendants), Xerox Holdings, and all then-current Xerox Holdings directors (the Directors). Xerox Holdings
was named as a nominal defendant in the case but no monetary damages are sought against it. Miami Firefighters
alleges: breach of fiduciary duty of loyalty against the Icahn defendants; breach of contract against the Icahn
defendants (for purchasing HP stock in violation of Icahn’s confidentiality agreement with Xerox Holdings); unjust
enrichment against the Icahn defendants; and breach of fiduciary duty of loyalty against the Directors (for any
consent to the Icahn defendants’ purchases of HP common stock while Xerox Holdings was considering acquiring
HP). Miami Firefighters seeks a judgment of breach of fiduciary duties against the Icahn defendants and the
Directors, and disgorgement to Xerox Holdings of profits Icahn Capital and High River earned from trading in HP
stock. This action was consolidated with a similar action brought by Steven J. Reynolds against the same parties in
the same court. Miami Firefighters’ counsel has been designated as lead counsel in the consolidated action.
Claims asserted against the Directors were later dismissed.
The parties have reached a stipulation of settlement providing for certain governance changes and a payment by
the Icahn defendants to Xerox. This stipulation has been submitted to the Supreme Court of the State of New York
for approval, and Miami Firefighters has submitted a contested fee application seeking $5 that is under
consideration by that court as well.
Guarantees, Indemnifications and Warranty Liabilities
Indemnifications Provided as Part of Contracts and Agreements
Acquisitions/Divestitures:
We have indemnified, subject to certain deductibles and limits, the purchasers of businesses or divested assets for
the occurrence of specified events under certain of our divestiture agreements. In addition, we customarily agree to
hold the other party harmless against losses arising from a breach of representations and covenants, including such
matters as adequate title to assets sold, intellectual property rights, specified environmental matters and certain
income taxes arising prior to the date of acquisition. Where appropriate, an obligation for such indemnifications is
recorded as a liability at the time of the acquisition or divestiture. Since the obligated amounts of these types of
indemnifications are often not explicitly stated and/or are contingent on the occurrence of future events, the overall
maximum amount of the obligation under such indemnifications cannot be reasonably estimated. Other than
obligations recorded as liabilities at the time of divestiture, we have not historically made significant payments for
these indemnifications. Additionally, under certain of our acquisition agreements, we have provided for additional
consideration to be paid to the sellers if established financial targets are achieved post-closing. We have recognized
liabilities for these contingent obligations based on an estimate of the fair value of these contingencies at the time of
acquisition. Contingent obligations related to indemnifications arising from our divestitures and contingent
consideration provided for by our acquisitions are not expected to be material to our financial position, results of
operations or cash flows.
Other Agreements:
We are also party to the following types of agreements pursuant to which we may be obligated to indemnify the
other party with respect to certain matters:
•
Guarantees on behalf of our subsidiaries with respect to real estate leases. These lease guarantees may
remain in effect subsequent to the sale of the subsidiary.
•
Agreements to indemnify various service providers, trustees and bank agents from any third-party claims
related to their performance on our behalf, with the exception of claims that result from a third-party's own willful
misconduct or gross negligence.
•
Guarantees of our performance in certain sales and services contracts to our customers and indirectly the
performance of third parties with whom we have subcontracted for their services. This includes indemnifications
to customers for losses that may be sustained as a result of the use of our equipment at a customer's location.
In each of these circumstances, our payment is conditioned on the other party making a claim pursuant to the
procedures specified in the particular contract and such procedures also typically allow us to challenge the other
party's claims. In the case of lease guarantees, we may contest the liabilities asserted under the lease. Further, our
Xerox 2024 Annual Report 149
obligations under these agreements and guarantees may be limited in terms of time and/or amount, and in some
instances, we may have recourse against third parties for certain payments we made.
Patent Indemnifications
In most sales transactions to resellers of our products, we indemnify against possible claims of patent infringement
caused by our products or solutions. In addition, we indemnify certain software providers against claims that may
arise as a result of our use or our subsidiaries', customers' or resellers' use of their software in our products and
solutions. These indemnities usually do not include limits on the claims, provided the claim is made pursuant to the
procedures required in the sales contract.
Indemnification of Officers and Directors
The corporate by-laws of Xerox Holdings Corporation and Xerox Corporation require that, except to the extent
expressly prohibited by law, we must indemnify Xerox Holdings Corporation's and Xerox Corporation's officers and
directors, respectively, against judgments, fines, penalties and amounts paid in settlement, including legal fees and
all appeals, incurred in connection with civil or criminal action or proceedings, as it relates to their services to Xerox
Holdings Corporation and/or Xerox Corporation and their subsidiaries. Although the by-laws provide no limit on the
amount of indemnification, Xerox Holdings Corporation or Xerox Corporation may have recourse against our
insurance carriers for certain payments made by Xerox Holdings Corporation or Xerox Corporation. However,
certain indemnification payments (such as those related to "clawback" provisions in certain compensation
arrangements) may not be covered under Xerox Holdings Corporation's and Xerox Corporation's directors' and
officers' insurance coverage. Xerox Holdings Corporation and Xerox Corporation also indemnify certain fiduciaries
of our employee benefit plans for liabilities incurred in their service as fiduciary whether or not they are officers of
Xerox Holdings Corporation or Xerox Corporation. Finally, in connection with Xerox Holdings Corporation's and/or
Xerox Corporation's acquisition of businesses, we may become contractually obligated to indemnify certain former
and current directors, officers and employees of those businesses in accordance with pre-acquisition by-laws and/or
indemnification agreements and/or applicable state law.
Guarantees
We have issued or provided approximately $213 of guarantees as of December 31, 2024 in the form of letters of
credit or surety bonds issued to i) support certain insurance programs; ii) support our obligations related to the
Brazil tax and labor contingencies (see Brazil Contingencies); iii) support our obligations related to our U.K.
pension plans; and iv) support certain contracts, primarily with public sector customers, which require us to provide
a surety bond as a guarantee of our performance of contractual obligations.
In general, we would only be liable for the amount of these guarantees in the event we, or one of our direct or
indirect subsidiaries whose obligations we have guaranteed, defaulted in performing our obligations under each
contract; the probability of which we believe is remote. We believe that our capacity in the surety markets as well as
under various credit arrangements (including our Credit Facility) is sufficient to allow us to respond to future
requests for proposals that require such credit support.
Xerox 2024 Annual Report 150
Note 21 - Preferred Stock
Series A Convertible Perpetual Voting Preferred Stock
As of December 31, 2024, Xerox Holdings Corporation had one class of preferred stock outstanding. Xerox
Holdings Corporation has issued 180,000 shares of Series A Preferred Stock that have an aggregate liquidation
value of $180 and a carrying value of $214. The Series A Preferred Stock pays quarterly cash dividends at a rate of
8% per year ($14 per year), on a cumulative basis. Each share of Series A Preferred Stock is convertible at any
time, at the option of the holder, into 37.4532 shares of common stock of Xerox Holdings Corporation for a total of
6,742 thousand shares (reflecting an initial conversion price of approximately $26.70 per share of common stock),
subject to customary anti-dilution adjustments. At December 31, 2024, 6,742 thousand shares of Common Stock
were reserved for conversion of the Series A Preferred Stock.
If the closing price of Xerox Holdings Corporation common stock exceeds $39.00 or 146.1% of the initial conversion
price of $26.70 per share of common stock for 20 out of 30 consecutive trading days, Xerox Holdings Corporation
will have the right to cause any or all of the Series A Preferred Stock to be converted into shares of common stock
at the then applicable conversion rate. The Series A Preferred Stock is also convertible, at the option of the holder,
upon a change in control, at the applicable conversion rate plus an additional number of shares determined by
reference to the price paid for our common stock upon such change in control. In addition, upon the occurrence of
certain fundamental change events, including a change in control or the delisting of Xerox Holdings Corporation's
common stock, the holder of the Series A Preferred Stock has the right to require Xerox Holdings Corporation to
redeem any or all of the preferred stock in cash at a redemption price per share equal to the liquidation preference
and any accrued and unpaid dividends up to, but not including, the redemption date. The Series A Preferred Stock
is classified as temporary equity (i.e., apart from permanent equity) as a result of the contingent redemption feature.
Series A Preferred Stock Voting Rights
The Xerox Holdings Corporation Series A Preferred Stock votes together with the Xerox Holdings Corporation
common stock, as a single class, on all matters submitted to the shareholders of Xerox Holdings Corporation, but
the Xerox Holdings Corporation Series A Voting Preferred Stock is only entitled to one vote for every ten shares of
Xerox Holdings Corporation common stock into which the Xerox Holdings Corporation Series A Preferred Stock is
convertible (674,157 votes at December 31, 2024).
Xerox 2024 Annual Report 151
Note 22 – Shareholders’ Equity
Xerox Holdings
Preferred Stock
Xerox Holdings Corporation is authorized to issue approximately 22 million shares of cumulative Preferred stock,
$1.00 par value per share. Refer to Note 21 - Preferred Stock for additional information.
Common Stock
Xerox Holdings Corporation is authorized to issue 437.5 million shares of Common stock, $1.00 par value per
share. At December 31, 2024, 18 million shares were reserved for issuance under our incentive compensation plans
and 7 million shares were reserved for conversion of the Series A Convertible Perpetual Preferred Voting Stock.
Treasury Stock
Xerox Holdings Corporation accounts for the repurchased Common stock under the cost method and includes such
Treasury stock as a component of our Common shareholders' equity. Retirement of Treasury stock is recorded as a
reduction of Common stock and Additional paid-in capital at the time such retirement is approved by our Board of
Directors.
Icahn Share Repurchase
On September 28, 2023, Xerox Holdings Corporation entered into a share purchase agreement (the Purchase
Agreement) with Carl C. Icahn and certain of his affiliates (Icahn Parties) pursuant to which the Company agreed to
purchase an aggregate of approximately 34 million shares of the Company’s Common Stock, at a price of $15.84
per share, the closing price on September 27, 2023, the last full trading day prior to the execution of the Purchase
Agreement, for an aggregate purchase price of approximately $542. The purchase was completed and settled on
September 28, 2023 and was funded by a $555 Credit Agreement with Jefferies Finance LLC (Jefferies Finance), as
the Administrative Agent, Collateral Agent and Lender. This loan was subsequently repaid in November 2023 with
the proceeds from a Term Loan B Credit Facility (Refer to Note 15 – Debt for additional information regarding the
Term Loan B Credit Facility). Aggregate fees associated with the share repurchase were approximately $11 and
include the 1% excise tax on net share repurchases as required by the Inflation Reduction Act of 2022. The costs
incurred are included as part of the cost of Treasury Stock.
The following table reflects the changes in Common and Treasury stock shares (shares in thousands). The Treasury
stock repurchases in the table below include the repurchases under the current Xerox Holdings Corporation
authorized share repurchase program.
Common Stock
Shares
Treasury Stock
Shares
Balance at December 31, 2021
168,069
8,675
Stock based compensation plans, net
1,561
—
Acquisition of Treasury stock
—
5,174
Cancellation of Treasury stock
(13,849)
(13,849)
Balance at December 31, 2022
155,781
—
Stock based compensation plans, net
1,608
—
Acquisition of Treasury stock
—
34,245
Cancellation of Treasury stock
(34,245)
(34,245)
Balance at December 31, 2023
123,144
—
Stock based compensation plans, net
1,291
—
Balance at December 31, 2024
124,435
—
Xerox
At December 31, 2024, Xerox Corporation has 1,000 authorized shares of Common stock, $1.00 par value per
share, of which 100 shares are issued and outstanding and held by Xerox Holdings Corporation.
Xerox 2024 Annual Report 152
Note 23 – Stock-Based Compensation
(shares in thousands, unless otherwise noted)
We have a long-term incentive plan whereby eligible employees may be granted restricted stock units (RSUs),
performance share units (PSUs) and stock options (SOs). We grant stock-based compensation awards in order to
continue to attract and retain qualified employees and to better align employees' interests with those of our
shareholders. Each of these awards is subject to settlement with newly issued shares of Xerox Holdings
Corporation's common stock. At December 31, 2024 and 2023, 5 million and 6 million shares, respectively, were
available for grant of awards.
Stock-based compensation expense was as follows:
Year Ended December 31,
2024
2023
2022
Stock-based compensation expense, pre-tax(1)
$
52
$
54
$
75
Income tax benefit recognized in earnings
8
10
11
____________
(1)
2022 includes $21 associated with the accelerated vesting of all outstanding equity awards, according to the terms of the award agreement,
in connection with the passing of Xerox Holding's former CEO.
Restricted Stock Units
Compensation expense for RSUs is based upon the grant-date market price and is recognized on a straight-line
basis over the vesting period, based on management's estimate of the number of shares expected to vest. RSUs
granted in 2022 through 2024 vest on a graded schedule as follows: 33% after one year of service, 33% after two
years of service, and 34% after three years of service from the date of grant.
Performance Share Units
PSU awards are comprised of performance-based components (Operating income improvement and Earnings per
share) as well as market-based components (Relative Total Shareholder Return (RTSR) and Absolute Share Price).
PSUs granted in 2024 are entirely performance-based with an RTSR modifier - see Market-Based Component
below. PSUs granted in 2023 are entirely market-based, and PSUs granted in 2022 are one-half performance-
based and one-half market-based. The metrics and weightings are as follows:
Award Year (Metric Weighting)
Performance Metric
2024
2023
2022
Operating income improvement(1)
100 %
— %
— %
Earnings per share
— %
— %
50 %
Relative total shareholder return
— %
100 %
— %
Absolute share price
— %
— %
50 %
100 %
100 %
100 %
____________
(1)
PSUs granted in 2024 are performance-based (Operating income improvement metric) with an RTSR modifier which can increase or
decrease the number of shares that ultimately vest by 25%.
The measures are independent of each other and depending on the achievement of these metrics, a recipient of a
PSU award is entitled to receive a number of shares equal to a percentage, ranging from 0% to 200% of the PSU
award granted. All PSUs granted have a three-year cliff vesting from the date of grant.
Performance-Based Component: This PSU component vests contingent upon meeting predetermined annual
and/or cumulative performance metrics. The 2024 PSU metric vests contingent upon meeting predetermined,
annual as well as cumulative Operating income improvement goals established for four discrete performance
periods (2024, 2025 and 2026) weighted 20%, respectively, and a three-year cumulative goal (2024-2026) weighted
40%. The 2022 PSU metric, Earnings per share, vests contingent upon meeting a three-year cumulative goal
(2022-2024). The fair value of this PSU component is based upon the grant-date market price for the underlying
stock. Compensation expense is recognized on a straight-line basis over a three-year vesting period, based on
management's estimate of the number of shares expected to vest and based on meeting the performance metrics. If
actual results exceed the stated targets, all plan participants have the potential to earn additional shares of common
stock up to a maximum over-achievement of 100% of the original grant. If the stated targets are not met, any
recognized compensation cost would be reversed.
Xerox 2024 Annual Report 153
Market-Based Component: The RTSR metric, included as part of the 2024 PSU, is based on Xerox Holdings
Corporation's stock price appreciation, inclusive of dividends paid, measured over three equally weighted
performance periods (2024, 2024-2025, and 2024-2026). RTSR will be determined by ranking Xerox Holdings
Corporation and the companies within the S&P 600 Information Technology Index, as approved by the
Compensation and Human Capital Committee of the Board, from highest to lowest according to their respective
TSRs, for each of the three performance periods. Payout for this portion of the 2024 PSU will be determined based
on the average RTSR of the three measurement periods, and based on these results, the RTSR modifier can
increase or decrease the number of shares that ultimately vest by 25%. Final payout will be determined based on
the cumulative results of the four individually weighted measurement periods of Xerox’s Operating income
improvement metric, and depending on the RTSR performance, a potential increase or decrease of 25%, with a
maximum over-achievement of 100% of the original grant. The RTSR metric, included as part of the 2023 PSU, is
based on Xerox Holdings Corporation's stock price appreciation, inclusive of dividends paid, measured over three
equally weighted performance periods (2023, 2023-2024, and 2023-2025). RTSR will be determined by ranking
Xerox Holdings Corporation and the companies within two distinct market indices, as approved by the
Compensation and Human Capital Committee of the Board, from highest to lowest according to their respective
TSRs, for each of the three performance periods. Payout for the 2023 PSU will be determined based on the
weighted average of Xerox Holdings Corporation's payout for each of the three performance periods. The Absolute
Share Price metric, included as the market-based component of the 2022 PSU grant, is based on Xerox Holdings
Corporation's average closing price for the last 20 trading days of the three-year performance period, inclusive of
dividends during that period. Payout for these portions of the PSU metrics will be determined based on total return
targets. Since these metrics represent market conditions, Monte Carlo simulations were used to determine their
respective grant-date fair values.
A summary of Xerox Holding's key valuation input assumptions used in the Monte Carlo simulation relative to
awards granted were as follows:
2024 Award
2023 Award
2022 Award
Term
3 years
3 years
3 years
Risk-free interest rate(1)
4.20 %
3.80 %
1.09 %
Volatility(2)
42.88 %
52.21 %
42.07 %
Weighted average fair value(3)
$
18.29
$
23.00
$
27.89
____________
(1)
The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve on the valuation date, with a maturity matched to the
performance period.
(2)
Volatility is derived from historical stock prices as well as implied volatility when appropriate and available.
(3)
The weighted average of fair values used to record compensation expense as determined by the Monte Carlo simulation.
Our RTSR and Absolute Share Price metrics are compared against total return targets to determine the payout as
follows:
2024
2023
2022
Payout Percentage
Percentile Ranking
Return Targets(1)
Percentile Ranking
Return Targets(1)
Total Return
Targets(1)
200%
n/a
75th and above
$30.00 and above
100%
n/a
50th
$
25.00
50%
n/a
25th
$
20.00
25%
75th and above
n/a
n/a
0%
50th
Below 25th
Below $20.00
(25)%
25th and below
n/a
n/a
____________
(1)
For performance between the levels described above, the degree of vesting is interpolated on a linear basis.
Compensation expense for the market-based component of the PSU awards is recognized on a straight-line basis
over the vesting period based on the fair value determined by the Monte Carlo simulation and, except in cases of
employee forfeiture, cannot be reversed regardless of performance.
Xerox 2024 Annual Report 154
Note: With respect to all stock-based compensation programs, Management’s estimate of the number of shares
expected to vest at the time of grant reflects an estimate for forfeitures based on our historical forfeiture rate to date.
Should actual forfeitures differ from management’s estimate, the activity will be reflected in a subsequent period. In
addition, RSUs, PSUs and SOs awarded to employees who are retirement-eligible at the date of grant, become
retirement-eligible during the vesting period, or are terminated not-for-cause (e.g., as part of a restructuring
initiative), vest based on service provided from the date of grant to the date of separation.
Summary of Stock-based Compensation Activity
2024
2023
2022
Shares
Weighted
Average Grant
Date Fair Value
Shares
Weighted
Average Grant
Date Fair Value
Shares
Weighted
Average Grant
Date Fair Value
Restricted Stock Units
Outstanding at January 1
4,672
$
18.46
3,221
$
23.16
3,161
$
25.26
Granted(1)
4,159
14.09
3,382
16.56
2,444
21.75
Vested(2)
(2,030)
19.04
(1,593)
23.73
(1,975)
24.56
Forfeited
(487)
17.27
(338)
19.27
(409)
24.20
Outstanding at December 31
6,314
15.48
4,672
18.46
3,221
23.16
Performance Shares
Outstanding at January 1
2,039
$
24.18
1,729
$
28.38
2,818
$
25.47
Granted
1,243
13.89
940
22.97
977
25.72
Vested (2)
—
—
—
—
(644)
27.95
Forfeited/Expired (3)
(1,216)
17.67
(630)
33.86
(1,422)
20.98
Outstanding at December 31
2,066
21.59
2,039
24.18
1,729
28.38
____________
(1)
2023 includes approximately 445 RSUs associated with a special retention award.
(2)
2022 includes approximately 469 RSUs and 644 PSUs associated with the accelerated vesting of all outstanding equity awards, according
to the terms of the award agreement, in connection with the passing of Xerox Holding's former CEO. No other PSUs vested in 2022.
(3)
2022 includes approximately 1,125 PSUs granted in 2019 that were adversely affected permanently by the impacts from the COVID-19
pandemic, and therefore no shares were earned.
Unrecognized compensation cost related to non-vested stock-based awards at December 31, 2024 was as follows:
Awards
Unrecognized Compensation
Remaining Weighted-Average
Vesting Period (Years)
Restricted Stock Units
$
52
1.9
Performance Shares
15
1.8
Stock Options(1)
3
2.0
Total
$
70
____________
(1)
Reflects CareAR SOs granted in May 2022.
The aggregate intrinsic value of outstanding stock-based awards was as follows:
Awards
December 31, 2024
Restricted Stock Units
$
53
Performance Shares
17
The intrinsic value and actual tax benefit realized for all vested and exercised stock-based awards was as follows:
December 31, 2024
December 31, 2023
December 31, 2022
Awards
Total Intrinsic
Value
Tax Benefit
Total Intrinsic
Value
Tax Benefit
Total Intrinsic
Value
Tax Benefit
Restricted Stock Units
$
31
$
4
$
25
$
5
$
39
$
6
Performance Share Units
—
—
—
—
10
—
Xerox 2024 Annual Report 155
Note 24 – Other Comprehensive Loss
Other Comprehensive Loss is comprised of the following:
Year Ended December 31,
2024
2023
2022
Pre-tax
Net of Tax
Pre-tax
Net of Tax
Pre-tax
Net of Tax
Net Translation Adjustments (Losses) Gains
$
(112) $
(120) $
191
$
191
$
(376) $
(376)
Unrealized (Losses) Gains
Changes in fair value of cash flow hedges losses
—
—
(18)
(16)
(35)
(27)
Changes in cash flow hedges reclassed to
earnings(1)
10
9
18
17
35
26
Other losses
—
—
—
—
(1)
(1)
Net Unrealized Gains (Losses)
10
9
—
1
(1)
(2)
Defined Benefit Plans Gains (Losses)
Net actuarial/prior service gains (losses)
3
(3)
(400)
(300)
(373)
(284)
Prior service amortization/curtailment(2)
(7)
(3)
(10)
(8)
(18)
(14)
Actuarial loss amortization/settlement(2)
73
65
35
26
88
66
Other gains (losses)(3)
29
29
(49)
(49)
62
61
Changes in Defined Benefit Plans Gains (Losses)
98
88
(424)
(331)
(241)
(171)
Other Comprehensive Loss
$
(4) $
(23) $
(233) $
(139) $
(618) $
(549)
_____________
(1)
Reclassified to Cost of sales - refer to Note 16 - Financial Instruments for additional information regarding our cash flow hedges.
(2)
Reclassified to Total Net Periodic Benefit Cost - refer to Note 18 - Employee Benefit Plans for additional information.
(3)
Primarily represents currency impact on cumulative amount of benefit plan net actuarial losses and prior service credits in AOCL.
Accumulated Other Comprehensive Loss (AOCL)
AOCL is comprised of the following:
December 31,
2024
2023
2022
Cumulative translation adjustments
$
(2,166) $
(2,046) $
(2,237)
Other unrealized gains (losses), net
6
(3)
(4)
Benefit plans net actuarial losses and prior service credits
(1,539)
(1,627)
(1,296)
Total Accumulated Other Comprehensive Loss
$
(3,699) $
(3,676) $
(3,537)
We utilize the aggregate portfolio approach for releasing disproportionate income tax effects from AOCL.
Xerox 2024 Annual Report 156
Note 25 – Loss per Share
The following table sets forth the computation of basic and diluted loss per share of Xerox Holdings Corporation's
Common stock (shares in thousands):
Year Ended December 31,
2024
2023
2022
Basic Loss per Share:
Net (Loss) Income
$
(1,321) $
1
$
(322)
Accrued dividends on preferred stock
(14)
(14)
(14)
Adjusted Net Loss attributable to common shareholders
$
(1,335) $
(13) $
(336)
Weighted average common shares outstanding
124,210
149,116
156,006
Basic Loss per Share
$
(10.75) $
(0.09) $
(2.15)
Diluted Loss per Share:
Net (Loss) Income
$
(1,321) $
1
$
(322)
Accrued dividends on preferred stock
(14)
(14)
(14)
Adjusted Net Loss attributable to common shareholders
$
(1,335) $
(13) $
(336)
Weighted average common shares outstanding
124,210
149,116
156,006
Common shares issuable with respect to:
Stock options
—
—
—
Restricted stock and performance shares
—
—
—
Convertible preferred stock
—
—
—
Adjusted Weighted average common shares outstanding
124,210
149,116
156,006
Diluted Loss per Share
$
(10.75) $
(0.09) $
(2.15)
The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or
shares that if included would have been anti-dilutive (shares in thousands):
Stock options
147
231
586
Restricted stock and performance shares
8,623
6,711
4,950
Convertible preferred stock
6,742
6,742
6,742
Convertible notes(1)
19,196
—
—
Total Anti-Dilutive Securities
34,708
13,684
12,278
Dividends per Common Share
$
1.00
$
1.00
$
1.00
_____________
(1)
Refer to Note 15 - Debt for additional information related to the issuance of Xerox Holdings Corporation's $400 of 3.75% Convertible Senior
Notes due 2030.
Xerox 2024 Annual Report 157
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial
Disclosure
None.
Item 9A. Controls and Procedures
Xerox Holdings Corporation
Management's Responsibility for Financial Statements
The management of Xerox Holdings Corporation is responsible for the integrity and objectivity of all information
presented in this annual report. The Consolidated Financial Statements were prepared in conformity with
accounting principles generally accepted in the United States of America and include amounts based on
management's best estimates and judgments. Management believes the Consolidated Financial Statements fairly
reflect the form and substance of transactions and that the financial statements fairly represent the financial position
and results of operations of Xerox Holdings Corporation.
The Audit Committee of the Board of Directors, which is composed solely of independent directors, meets regularly
with the independent auditors, PricewaterhouseCoopers LLP, the internal auditors and representatives of
management to review accounting, financial reporting, internal control and audit matters, as well as the nature and
extent of the audit effort. The Audit Committee is responsible for the engagement of the independent auditors. The
independent auditors and internal auditors have access to the Audit Committee.
Evaluation of Disclosure Controls and Procedures
The management of Xerox Holdings Corporation evaluated, with the participation of our principal executive officer
and principal financial officer, or persons performing similar functions, the effectiveness of our disclosure controls
and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the
end of the period covered by this report. Based on this evaluation, our principal executive officer and principal
financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and
procedures were effective to ensure that information we are required to disclose in the reports that we file or submit
under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission’s rules and forms relating to Xerox Holdings
Corporation, including our consolidated subsidiaries, and was accumulated and communicated to Xerox Holdings
Corporation’s management, including the principal executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management's Report on Internal Control over Financial Reporting
The management of Xerox Holdings Corporation is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in the rules promulgated under the Securities Exchange Act
of 1934. Under the supervision and with the participation of our management, including our principal executive,
financial and accounting officers, we have conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework in “Internal Control - Integrated Framework (2013)” issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
Based on the above evaluation, management concluded that our internal control over financial reporting was
effective as of December 31, 2024.
The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which
appears in Part II, Item 8 of this combined Form 10-K.
Changes in Internal Control over Financial Reporting
In connection with the evaluation required by paragraph (d) of Rule 13a-15 under the Exchange Act, there was no
change identified in our internal control over financial reporting that occurred during the last fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
An assessment of internal controls over financial reporting of a recently acquired business may be excluded from
management's evaluation of disclosure controls and procedures for up to a year from the date of acquisition. We
excluded ITsavvy Acquisition Company, Inc. (ITsavvy) from our assessment of disclosure controls and procedures
as of December 31, 2024 as it was acquired by the Company during the fourth quarter 2024. ITsavvy is a wholly-
owned subsidiary whose total assets and total revenues excluded from management’s assessment of internal
controls represented less than 1%, respectively, of the related consolidated financial statement amounts as of and
for the year ended December 31, 2024.
Xerox 2024 Annual Report 158
Xerox Corporation
Management's Responsibility for Financial Statements
The management of Xerox Corporation is responsible for the integrity and objectivity of all information presented in
this annual report. The Consolidated Financial Statements were prepared in conformity with accounting principles
generally accepted in the United States of America and include amounts based on management's best estimates
and judgments. Management believes the Consolidated Financial Statements fairly reflect the form and substance
of transactions and that the financial statements fairly represent the financial position and results of operations of
Xerox Corporation.
The Audit Committee of the Xerox Holdings Corporation Board of Directors, which is composed solely of
independent directors, meets regularly with the independent auditors, PricewaterhouseCoopers LLP, the internal
auditors and representatives of management to review accounting, financial reporting, internal control and audit
matters, as well as the nature and extent of the audit effort. The Audit Committee is responsible for the engagement
of the independent auditors. The independent auditors and internal auditors have access to the Audit Committee.
Evaluation of Disclosure Controls and Procedures
The management of Xerox Corporation evaluated, with the participation of our principal executive officer and
principal financial officer, or persons performing similar functions, the effectiveness of our disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end
of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial
officer have concluded that, as of the end of the period covered by this report, our disclosure controls and
procedures were effective to ensure that information we are required to disclose in the reports that we file or submit
under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission’s rules and forms relating to Xerox
Corporation, including our consolidated subsidiaries, and was accumulated and communicated to Xerox
Corporation’s management, including the principal executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management's Report on Internal Control over Financial Reporting
The management of Xerox Corporation is responsible for establishing and maintaining adequate internal control
over financial reporting, as such term is defined in the rules promulgated under the Securities Exchange Act of
1934. Under the supervision and with the participation of our management, including our principal executive,
financial and accounting officers, we have conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework in “Internal Control - Integrated Framework (2013)” issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
Based on the above evaluation, management concluded that our internal control over financial reporting was
effective as of December 31, 2024.
The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which
appears in Part II, Item 8 of this combined Form 10-K.
Changes in Internal Control over Financial Reporting
In connection with the evaluation required by paragraph (d) of Rule 13a-15 under the Exchange Act, there was no
change identified in our internal control over financial reporting that occurred during the last fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
An assessment of internal controls over financial reporting of a recently acquired business may be excluded from
management's evaluation of disclosure controls and procedures for up to a year from the date of acquisition. We
excluded ITsavvy Acquisition Company, Inc. (ITsavvy) from our assessment of disclosure controls and procedures
as of December 31, 2024 as it was acquired by the Company during the fourth quarter 2024. ITsavvy is a wholly-
owned subsidiary whose total assets and total revenues excluded from management’s assessment of internal
controls represented less than 1%, respectively, of the related consolidated financial statement amounts as of and
for the year ended December 31, 2024.
Xerox 2024 Annual Report 159
Item 9B. Other Information
Trading Plans
None of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a Rule
10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-
K) during the quarterly period covered by this report.
Separation and Release Agreement
On February 23, 2025, Xerox Corporation entered into a General Release, Non-Competition and Non-Solicitation
Agreement (the Release Agreement) with Xavier Heiss, its former EVP, Chief Financial Officer who, as previously
disclosed, retired effective as of January 31, 2025 (the Retirement Date). Pursuant to the Release Agreement, Mr.
Heiss will be entitled to continued vesting of all outstanding restricted stock units held by him as of the Retirement
Date through their original vesting dates in exchange for a release of claims in favor of Xerox S.A.S. and its
affiliates. The Release Agreement also subjects Mr. Heiss to customary non-disparagement obligations, as well as
non-competition and non-solicitation covenants that will apply for 18 months following the Retirement Date and a
general cooperation covenant that survives for 36 months following the Retirement Date. The Release Agreement
also contains a release of claims in favor of Mr. Heiss and a non-disparagement covenant in his favor.
The foregoing description of the Release Agreement does not purport to be complete and is qualified in its entirety
by reference to the full text of the Release Agreement, a copy of which is attached as Exhibit 10(ff) to this Annual
Report on Form 10-K and incorporated herein by reference.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Xerox 2024 Annual Report 160
Part III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this Item, with the exception of the information concerning our executive officers, will be
included in the Company's definitive proxy statement to be filed with the SEC within 120 days after December 31,
2024, in connection with the solicitation of proxies for the Company's 2025 annual meeting of shareholders (the
2025 Proxy Statement), and is incorporated herein by reference.
Executive Officers of Xerox
The following is a list of the executive officers of Xerox, their current ages, their present positions and the year
appointed to their present positions. Each officer is elected to hold office until the meeting of the Board of Directors
held on the day of the next annual meeting of shareholders, subject to the provisions of the By-Laws.
Name
Age
Present Position
Year Appointed
to Present
Position
Xerox Officer
Since
Steven J. Bandrowczak
64
Chief Executive Officer
2022
2018
John G. Bruno
60
President and Chief Operating Officer
2022
2022
Flor Colón
61
Chief Legal Officer and Corporate Secretary
2024
2024
Mirlanda Gecaj
51
Chief Financial Officer
2025
2022
Jacques-Edouard Gueden
59
Chief Channel and Partner Officer
2024
2021
Louis J. Pastor
40
Chief Administrative Officer and Global Head of Operations
2024
2024
William Twomey
49
Chief Accounting Officer
2025
2025
Mr. Bandrowczak was appointed Chief Executive Officer of Xerox in 2022 and previously served as President and
Chief Operations Officer of Xerox since 2018. Prior to joining Xerox, Mr. Bandrowczak held leadership positions at
Alight Solutions, Sutherland Global Services and Hewlett-Packard Enterprises.
Mr. Bruno joined Xerox in 2022 as President and Chief Operating Officer, where he is responsible for the Print,
Digital Services, and IT Services business units. Prior to joining Xerox, Mr. Bruno served as Chief Operating Officer
of Aon, a global professional services firm, and Chief Executive Officer of Data & Analytics Services. Prior to AON,
Mr. Bruno was President, Industry & Field Operations and Executive Vice President of Corporate Development for
NCR Corporation. He has also held senior leadership positions with Goldman Sachs, Merrill Lynch, Cisco Systems,
and United Parcel Services.
Ms. Colón joined Xerox in 1999 and was named Executive Vice President, Chief Legal Officer and Corporate
Secretary in 2024, where she is responsible for Legal, Ethics and Compliance, and Environmental, Health, Safety
and Sustainability (EHS&S). Prior to that, Ms. Colón held various leadership positions within Xerox, most recently
serving as Deputy General Counsel, Corporate Secretary and Chief Ethics Officer.
Ms. Gecaj was named Executive Vice President and Chief Financial Officer in 2025. In her role, Ms. Gecaj oversees
the company’s finance organization, including global corporate finance strategy, planning and analysis, accounting,
treasury, taxes, audit, enterprise risk management, XeroxTM Financial Services, and investor relations. Prior to her
current role, Ms. Gecaj served as Vice President and Chief Accounting Officer. Previously, Ms. Gecaj spent five
years at Element Solutions Inc., where, she most recently served as Vice President, Global Shared Service
Strategy. Prior to joining Element Solutions, she was a senior manager with PricewaterhouseCoopers.
Mr. Gueden was named Executive Vice President and Chief Channel and Partner Officer in 2024. In this role, he
leads Xerox’s indirect business as head of Global Channels and Partner business. Mr. Gueden has held various
senior management roles during his more than 30-year career with Xerox, most recently as President of EMEA
Operations beginning in 2021, where he led the company’s go-to-market teams in Europe, the Middle East, Africa
and Eurasian countries to bring Xerox’s full portfolio of products, services and software to clients and partners.
Mr. Pastor joined Xerox in 2024 as Executive Vice President and Chief Administrative Officer and Global Head of
Operations. Mr. Pastor is responsible for information technology, information security, real estate, the Xerox
Reinvention Office, and Xerox’s Global Business Services organization. Mr. Pastor previously served as Executive
Vice President, Chief Corporate Development Officer and Chief Legal Officer for Xerox until April 2023, after first
joining the company in October 2018 as Executive Vice President and General Counsel.
Mr. Twomey joined Xerox in 2025 as Vice President and Chief Accounting officer. Prior to this appointment, Mr.
Twomey spent 10 years at Paramount Global where he most recently served as Senior Vice President, Global
Xerox 2024 Annual Report 161
Accounting Operations. Prior to his role at Paramount Global Mr. Twomey held various accounting roles at Trusted
Media Brands and Focus Financial Partners. Mr. Twomey began his career with PricewaterhouseCoopers where he
was an audit manager.
Code of Business Conduct
We have adopted a code of ethics that applies to all employees, including executive officers and directors. The
Code of Business Conduct is available on the Corporate Social Responsibility page of our website at
www.xerox.com. A copy of the Code of Business Conduct is available, free of charge, by submitting a written
request to: Xerox Corporation, Business Ethics and Compliance Office, 201 Merritt 7 Norwalk, CT 06851–1056
U.S.A.
If we ever were to amend or waive any provision of our Code of Business Conduct that applies to our principal
executive officer, principal financial officer, principal accounting officer or any person performing similar functions,
we intend to satisfy our disclosure obligations with respect to any such waiver or amendment by posting such
information on our internet website set forth above rather than filing a Form 8-K.
Item 11. Executive Compensation
The information required by this Item will be included in the 2025 Proxy Statement, and is incorporated herein by
reference, provided, however, that the information included under the heading “Pay Versus Performance” in our
definitive 2025 Proxy Statement is not incorporated herein by reference or subject to the liabilities of Section 18 of
the Securities Exchange Act of 1934, as amended.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
The information required by this Item will be included in the 2025 Proxy Statement, and is incorporated herein by
reference.
Item 13. Certain Relationships, Related Transactions and Director Independence
The information required by this Item will be included in the 2025 Proxy Statement, and is incorporated herein by
reference.
Item 14. Principal Accounting Fees and Services
The information required by this Item will be included in the 2025 Proxy Statement, and is incorporated herein by
reference.
Xerox 2024 Annual Report 162
Part IV
Item 15. Exhibit and Financial Statement Schedules
(a) (1) Index to Financial Statements filed as part of this report:
▪
Xerox Holdings Corporation Report of Independent Registered Public Accounting Firm (PCAOB ID
238);
▪
Xerox Corporation Report of Independent Registered Public Accounting Firm (PCAOB ID 238);
▪
Xerox Holdings Corporation Consolidated Statements of (Loss) Income for each of the years in the
three-year period ended December 31, 2024;
▪
Xerox Corporation Consolidated Statements of (Loss) Income for each of the years in the three-year
period ended December 31, 2024;
▪
Xerox Holdings Corporation Consolidated Statements of Comprehensive Loss for each of the three
years in the period ended December 31, 2024;
▪
Xerox Corporation Consolidated Statements of Comprehensive Loss for each of the three years in the
period ended December 31, 2024;
▪
Xerox Holdings Corporation Consolidated Balance Sheets as of December 31, 2024 and 2023;
▪
Xerox Corporation Consolidated Balance Sheets as of December 31, 2024 and 2023;
▪
Xerox Holdings Corporation Consolidated Statements of Cash Flows for each of the three years in the
period ended December 31, 2024;
▪
Xerox Corporation Consolidated Statements of Cash Flows for each of the three years in the period
ended December 31, 2024;
▪
Xerox Holdings Corporation Consolidated Statements of Shareholders' Equity for each of the three
years in the period ended December 31, 2024;
▪
Xerox Corporation Consolidated Statements of Shareholder's Equity for each of the three years in the
period ended December 31, 2024;
▪
Notes to the Consolidated Financial Statements; and
▪
All other schedules are omitted as they are not applicable, or the information required is included in the
financial statements or notes thereto.
(2) Financial Statement Schedules:
▪
Xerox Holdings Corporation Schedule II - Valuation and Qualifying Accounts for each of the three years
in the period ended December 31, 2024;
▪
Xerox Corporation Schedule II - Valuation and Qualifying Accounts for each of the three years in the
period ended December 31, 2024.
(3) Exhibits required to be filed by Item 601 of Regulation S-K: See the Index of Exhibits at pages 166
through 175 inclusive, which is attached to and incorporated into and made a part of this Annual Report.
Xerox 2024 Annual Report 163
Xerox Holdings Corporation
Schedule II Valuation and Qualifying Accounts
Receivables - Allowance for Doubtful Accounts:
(in millions)
Balance
at beginning
of period
Additions
charged to bad
debt provision (1)
Amounts
charged to
other income
statement
accounts (1)
Deductions
and other, net
of recoveries (2)
Balance
at end
of period
Year Ended December 31, 2024
Accounts Receivable
$
64
$
25
$
—
$
(20) $
69
Finance Receivables
92
17
2
(54)
57
$
156
$
42
$
2
$
(74) $
126
Year Ended December 31, 2023
Accounts Receivable
$
52
$
22
$
6
$
(16) $
64
Finance Receivables
117
6
2
(33)
92
$
169
$
28
$
8
$
(49) $
156
Year Ended December 31, 2022
Accounts Receivable
$
58
$
17
$
(9) $
(14) $
52
Finance Receivables
118
26
2
(29)
117
$
176
$
43
$
(7) $
(43) $
169
_____________
(1)
Bad debt provisions relate to estimated losses due to credit and similar collectibility issues. Other charges (credits) relate to adjustments to
reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.
(2)
Deductions and other, net of recoveries primarily relates to receivable write-offs, but also includes the impact of foreign currency translation
adjustments and recoveries of previously written off receivables.
Deferred Tax Asset Valuation Allowances:
(in millions)
Balance
at beginning
of period
Additions
charged to
income tax
expense (benefit)
Amounts
credited to
other accounts (1)
Balance
at end
of period
Year Ended December 31, 2024
$
375
195
(59) $
511
Year Ended December 31, 2023
$
366
(4)
13
$
375
Year Ended December 31, 2022
$
357
7
2
$
366
_____________
(1)
Reflects other increases (decreases) to our valuation allowance, including the effects of currency. These did not affect Income tax benefit in
total as there was a corresponding adjustment to Deferred tax assets or Other comprehensive loss.
Xerox 2024 Annual Report 164
Xerox Corporation
Schedule II Valuation and Qualifying Accounts
Receivables - Allowance for Doubtful Accounts:
(in millions)
Balance
at beginning
of period
Additions
charged to bad
debt provision (1)
Amounts
charged to
other income
statement
accounts (1)
Deductions
and other, net
of recoveries (2)
Balance
at end
of period
Year Ended December 31, 2024
Accounts Receivable
$
64
$
25
$
—
$
(20) $
69
Finance Receivables
92
17
2
(54)
57
$
156
$
42
$
2
$
(74) $
126
Year Ended December 31, 2023
Accounts Receivable
$
52
$
22
$
6
$
(16) $
64
Finance Receivables
117
6
2
(33)
92
$
169
$
28
$
8
$
(49) $
156
Year Ended December 31, 2022
Accounts Receivable
$
58
$
17
$
(9) $
(14) $
52
Finance Receivables
118
26
2
(29)
117
$
176
$
43
$
(7) $
(43) $
169
_____________
(1)
Bad debt provisions relate to estimated losses due to credit and similar collectibility issues. Other charges (credits) relate to adjustments to
reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.
(2)
Deductions and other, net of recoveries primarily relates to receivable write-offs, but also includes the impact of foreign currency translation
adjustments and recoveries of previously written off receivables.
Deferred Tax Asset Valuation Allowances:
(in millions)
Balance
at beginning
of period
Additions
charged to
income tax
expense (benefit)
Amounts
credited to
other accounts (1)
Balance
at end
of period
Year Ended December 31, 2024
$
375
195
(59) $
511
Year Ended December 31, 2023
$
366
(4)
13
$
375
Year Ended December 31, 2022
$
357
7
2
$
366
_____________
(1)
Reflects other increases (decreases) to our valuation allowance, including the effects of currency. These did not affect Income tax benefit in
total as there was a corresponding adjustment to Deferred tax assets or Other comprehensive loss.
Xerox 2024 Annual Report 165
Index of Exhibits
Xerox Holdings Corporation
Xerox Corporation
Document and Location
3(a)(1)
Restated Certificate of Incorporation of Xerox Corporation's filed with the Department of State of
New York on July 31, 2019.
Incorporated by reference to Exhibit 3.2 to Xerox Corporation's Report on Form 8-K dated July 31,
2019. See SEC File Number 001-04471.
3(a)(2)
Restated Certificate of Incorporation of Xerox Holdings Corporation filed with the Department of
State of New York on May 19, 2022.
Incorporated by reference to Exhibit 3.2 to Xerox Holdings Corporation's Quarterly Report on
Form 10-Q dated May 19, 2022. See SEC File Number 001-39013.
3(b)(1)
Second Amended and Restated By-Laws of Xerox Corporation dated February 14, 2024.
Incorporated by reference to Exhibit 3(b)(1) to Xerox Holdings Corporation's and Xerox
Corporation's Combined Annual Report on Form 10-K dated February 23, 2024. See SEC File
Numbers 001-39013 and 001-04471.
3(b)(2)
Amended and Restated By-Laws of Xerox Holdings Corporation dated February 17, 2022.
Incorporated by reference to Exhibit 3(b)(2) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2022. See SEC File Number 001-39013.
4(b)
[Reserved]
4(c)
Form of Indenture dated as of December 4, 2009 between Xerox Corporation and the Bank of
New York Mellon, as trustee, relating to an unlimited amount of senior debt securities.
Incorporated by reference to Exhibit 4(b)(5) to Post-Effective Amendment No. 1 to Xerox
Corporation's Registration Statement No. 333-142900. See SEC File Number 001-04471.
4(d)
Form of Indenture dated August 6, 2020 among Xerox Holdings Corporation, Xerox Corporation
and U.S. Bank National Association, as Trustee, with respect to Xerox Holdings Corporation’s
5.000% Senior Notes due 2025.
Incorporated by reference to Exhibit 4.1 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Current Report on Form 8-K dated August 6, 2020. See SEC File Numbers 001-39013
and 001-04471.
4(e)
Form of Indenture dated August 6, 2020 among Xerox Holdings Corporation, Xerox Corporation
and U.S. Bank National Association, as Trustee, with respect to Xerox Holdings Corporation’s
5.500% Senior Notes due 2028.
Incorporated by reference to Exhibit 4.2 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Current Report on Form 8-K dated August 6, 2020. See SEC File Numbers 001-39013
and 001-04471.
4(f)
Description of Xerox Holdings Corporation Capital Stock.
4(g)
Form of Registration Rights Agreement dated as of April 2021 by and among Xerox Holdings
Corporation, Carl C. Icahn and the named Icahn companies.
Incorporated by reference to Exhibit 4.1 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. See SEC File
Numbers 001-39013 and 001-04471.
4(h)
Indenture, dated March 20, 2024 (the “Indenture”), by and among Xerox Holdings Corporation,
Xerox Corporation and Xerox Business Solutions, LLC, as guarantors, and U.S. Bank Trust
Company, National Association, as trustee, with respect to Xerox Holdings Corporation’s 8.875%
Senior Notes due 2029.
Incorporated by reference to Exhibit 4.1 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 8-K dated March 25, 2024. See SEC File Numbers
001-39013 and 001-04471.
Xerox 2024 Annual Report 166
4(i)
Indenture, dated March 11, 2024 (the “Indenture”), among Xerox Holdings Corporation, as issuer,
Xerox Corporation and Xerox Business Solutions, LLC, as guarantors, and U.S. Bank Trust
Company, National Association, as trustee., with respect to Xerox Holding Corporation’s 3.75%
Senior Notes due 2030.
Incorporated by reference to Exhibit 4.1 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 8-K dated March 12, 2024. See SEC File Numbers
001-39013 and 001-04471.
4(j)
Instruments with respect to long-term debt where the total amount of securities authorized
thereunder does not exceed 10 percent of the total assets of Xerox Holdings Corporation and/or
Xerox Corporation, as applicable, and its subsidiaries on a consolidated basis have not been filed.
Xerox Holdings Corporation and/or Xerox Corporation, as applicable, agrees to furnish to the
Commission a copy of each such instrument upon request.
*10(a)
Officer Severance Program, as amended and restated effective March 11, 2024.
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Annual Report on Form 8-K dated March 15, 2024 See SEC File Nos. 001-39013 and
001-04471.
10(b)
[Reserved]
*10(c)
Compensation Plan Agreement, dated as of July 31, 2019 between Xerox Corporation and Xerox
Holdings Corporation.
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation’s Current Report on Form
8-K Dated July 31, 2019. See SEC File Number 001-39013.
*10(d)(1)
Xerox Corporation's 2004 Equity Compensation Plan for Non-Employee Directors, as amended
and restated as of July 31, 2019 ("2004 ECPNED").
Incorporated by reference to Exhibit 10.3 to Xerox Holdings Corporation's Current Report on Form
8-K dated July 31, 2019. See SEC File Number 001-0447139013.
*10(d)(2)
Form of Agreement under 2004 ECPNED.
Incorporated by reference to Exhibit 10(d)(2) to Xerox Corporation's Quarterly Report on Form 10-
Q for the Quarter ended March 31, 2005. See SEC File Number 001-04471.
10(d)(3)
[Reserved]
10(d)(4)
[Reserved]
*10(d)(5)
Form of Deferred Stock Unit (“DSU”) Agreement under 2004 ECPNED.
Incorporated by reference to Exhibit 10.13 to Xerox Holdings Corporation’s and Xerox
Corporation’s combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019.
See SEC File Nos. 001-39013 and 001-04471.
10(d)(6)
[Reserved]
*10(d)(7)
Form of Restricted Stock Unit ("RSU") Agreement under 2004 ECPNED.
Incorporated by reference to Exhibit 10.15 to Xerox Holdings Corporation’s and Xerox
Corporation’s combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019.
See SEC File Nos. 001-39013 and 001-04471.
10(d)(8)
[Reserved]
*10(d)(9)
Xerox Holdings Corporation's 2004 Equity Compensation Plan for Non-Employee Directors, 2021
Amendment and Restatement ("2021 ECPNED")
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation's Current Report on Form
8-K dated May 20, 2021. See SEC File Number 001-39013.
*10(d)(10)
Form of Deferred Stock Unit (“DSU”) Agreement under 2021 ECPNED.
Incorporated by reference to Exhibit 10.9 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended March 31, 2021. See SEC File
Nos. 001-39013 and 001-04471.
10(d)(11)
[Reserved]
*10(d)(12)
Form of Restricted Stock Unit (“RSU”) Agreement under 2021 ECPNED.
Incorporated by reference to Exhibit 10.11 to Xerox Holdings Corporation’s and Xerox
Corporation’s combined Quarterly Report on Form 10-Q for the Quarter ended March 31, 2021.
See SEC File Nos. 001-39013 and 001-04471.
10(d)(13)
[Reserved]
Xerox 2024 Annual Report 167
*10(e)(1)
Xerox Corporation's 2004 Performance Incentive Plan, as amended and restated as of June 30,
2017 ("2017 PIP").
Incorporated by reference to Exhibit 10(e)(1) to Xerox Corporation's Quarterly Report on Form 10-
Q for the Quarter ended June 30, 2017. See SEC File Number 001-04471.
*10(e)(2)
Amendment No. 1 dated February 1, 2018 to 2017 PIP.
Incorporated by reference to Exhibit 10(e)(18) to Xerox Corporation’s Annual Report on Form 10-K
for the year ended December 31, 2017. See SEC File Number 001-04471.
*10(e)(3)
Form of Omnibus Award Agreement under PIP; ELTIP; PSU & RSU (ratable).
Incorporated by reference to Exhibit 10(e)(32) to Xerox Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 2017. See SEC File Number 001-04471.
10(e)(4)
[Reserved]
*10(e)(5)
Form of Omnibus Award Agreement under PIP; ELTIP; RSU (ratable).
Incorporated by reference to Exhibit 10(e)(34) to Xerox Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 2017. See SEC File Number 001-04471.
10(e)(6)
[Reserved]
*10(e)(7)
Form of Omnibus Award Agreement under PIP; ELTIP: Stock Options.
Incorporated by reference to Exhibit 10(e)(36) to Xerox Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 2017. See SEC File Number 001-04471.
10(e)(8)
[Reserved]
*10(e)(9)
Amendment No. 2 dated May 14, 2018 to 2017 PIP.
Incorporated by reference to Exhibit 10.5 to Xerox Corporation's Quarterly Report on Form 10-Q
for the Quarter ended June 30, 2018. See SEC File Number 001-04471.
10(e)(10)
[Reserved]
*10(e)(11)
Amendment No. 3 dated January 14, 2019 to 2017 PIP.
Incorporated by reference to Exhibit 10(e)(42) to Xerox Corporation’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2018. See SEC File Number 001-04471.
*10(e)(12)
Performance Elements for 2019 Executive Long-Term Incentive Program.
Incorporated by reference to Exhibit 10(e)(44) to Xerox Corporation’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2018. See SEC File Number 001-04471.
*10(e)(13)
Form of Omnibus Award Agreement under PIP; ELTIP; PSU & RSU (ratable).
Incorporated by reference to Exhibit 10(e)(45) to Xerox Corporation’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2018. See SEC File Number 001-04471.
*10(e)(14)
Form of Omnibus Award Agreement under PIP; ELTIP; RSU (ratable).
Incorporated by reference to Exhibit 10(e)(46) to Xerox Corporation’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2018. See SEC File Number 001-04471.
*10(e)(15)
Form of Omnibus Award Agreement under PIP; ELTIP; Stock Options.
Incorporated by reference to Exhibit 10.3 to Xerox Corporation's Quarterly Report on Form 10-Q
for the quarter ended March 31, 2019. See SEC File Number 001-04471.
*10(e)(16)
Xerox Corporation's 2004 Performance Incentive Plan, as amended and restated as of July 31,
2019.
Incorporated by reference to Exhibit 10.2 to Xerox Holdings Corporation’s Current Report on Form
8-K dated July 31, 2019. See SEC File No. 001-39013.
*10(e)(17)
Form of Performance Share Unit (“PSU”) Award Agreement under Xerox Corporation 2004
Performance Incentive Plan, as amended.
Incorporated by reference to Exhibit 10.3 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019. See SEC File
Nos. 001-39013 and 001-04471.
*10(e)(18)
Form of Restricted Stock Unit (“RSU”) Award Agreement under Xerox Corporation 2004
Performance Incentive Plan, as amended.
Incorporated by reference to Exhibit 10.4 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019. See SEC File
Nos. 001-39013 and 001-04471.
Xerox 2024 Annual Report 168
*10(e)(19)
Form of One-Year RSU Agreement under Xerox Corporation 2004 Performance Incentive Plan, as
amended.
Incorporated by reference to Exhibit 10.5 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019. See SEC File
Nos. 001-39013 and 001-04471.
*10(e)(20)
Form of Two-Year RSU Agreement under Xerox Corporation 2004 Performance Incentive Plan, as
amended.
Incorporated by reference to Exhibit 10.6 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019. See SEC File
Nos. 001-39013 and 001-04471.
*10(e)(21)
Form of Three-Year RSU Agreement under Xerox Corporation 2004 Performance Incentive Plan,
as amended.
Incorporated by reference to Exhibit 10.7 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019. See SEC File
Nos. 001-39013 and 001-04471.
*10(e)(22)
Form of Stock Option Agreement under Xerox Corporation 2005 Performance Incentive Plan, as
amended.
Incorporated by reference to Exhibit 10.8 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019. See SEC File
Nos. 001-39013 and 001-04471.
*10(e)(23)
Form of PSU Award Summary under Xerox Corporation 2004 Performance Incentive Plan, as
amended.
Incorporated by reference to Exhibit 10.9 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019. See SEC File
Nos. 001-39013 and 001-04471.
*10(e)(24)
Form of RSU Award Summaries under Xerox Corporation 2004 Performance Incentive Plan, as
amended.
Incorporated by reference to Exhibit 10.10 to Xerox Holdings Corporation’s and Xerox
Corporation’s combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019.
See SEC File Nos. 001-39013 and 001-04471.
*10(e)(25)
Form of Stock Option Award Summary under Xerox Corporation 2004 Performance Incentive
Plan, as amended.
Incorporated by reference to Exhibit 10.11 to Xerox Holdings Corporation’s and Xerox
Corporation’s combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019.
See SEC File Nos. 001-39013 and 001-04471.
*10(f)(1)
Xerox Holdings Corporation Performance Incentive Plan (“XHCPIP”).
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Current Report on Form 8-K dated May 28, 2020. See SEC File Numbers 001-39013
and 001-04471.
*10(f)(2)
Form of Omnibus Award Agreement under XHCPIP: PIP; ELTIP; PSU.
Incorporated by reference to Exhibit 10.2 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2020. See SEC File
Nos. 001-39013 and 001-04471.
*10(f)(3)
Form of Omnibus Award Agreement under XHCPIP: PIP; ELTIP; RSUs (ratable).
Incorporated by reference to Exhibit 10.3 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2020. See SEC File
Nos. 001-39013 and 001-04471.
*10(f)(4)
Form of Omnibus Award Agreement under XCHPIP: PIP; ELTIP; 1-year RSUs.
Incorporated by reference to Exhibit 10.4 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2020. See SEC File
Nos. 001-39013 and 001-04471.
*10(f)(5)
Form of Omnibus Award Agreement under XHCPIP: PIP; ELTIP; 2-year RSUs.
Incorporated by reference to Exhibit 10.5 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2020. See SEC File
Nos. 001-39013 and 001-04471.
Xerox 2024 Annual Report 169
*10(f)(6)
Form of Omnibus Award Agreement under XHCPIP: PIP; ELTIP; 3-year RSUs.
Incorporated by reference to Exhibit 10.6 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2020. See SEC File
Nos. 001-39013 and 001-04471.
*10(f)(7)
Form of Omnibus Award Agreement under XHCPIP: PIP; ELTIP; Stock Options.
Incorporated by reference to Exhibit 10.7 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2020. See SEC File
Nos. 001-39013 and 001-04471.
10(f)(8)
[Reserved]
10(f)(9)
[Reserved]
*10(f)(10)
Form of Omnibus Award Agreement under XHCPIP: PIP; ELTIP; RSUs (2-year ratable 50/50).
Incorporated by reference to Exhibit 10(f)(10) to Xerox Holdings Corporation’s and Xerox
Corporation’s combined Annual Report on Form 10-K for the fiscal year ended December 31,
2020. See SEC File Numbers 001-39013 and 001-04471.
*10(f)(11)
Form of Omnibus Award Agreement under XHCPIP: PIP; ELTIP; RSUs (3-year ratable 33/33/34).
Incorporated by reference to Exhibit 10(f)(11) to Xerox Holdings Corporation’s and Xerox
Corporation’s combined Annual Report on Form 10-K for the fiscal year ended December 31,
2020. See SEC File Numbers 001-39013 and 001-04471.
*10(f)(12)
Form of PSU Award Summary under XHCPIP.
Incorporated by reference to Exhibit 10.9 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019. See SEC File
Nos. 001-39013 and 001-04471.
*10(f)(13)
Form of RSU Award Summary under XHCPIP.
Incorporated by reference to Exhibit 10.10 to Xerox Holdings Corporation’s and Xerox
Corporation’s combined Quarterly Report on Form 10-Q for the Quarter ended June 30, 2019.
See SEC File Nos. 001-39013 and 001-04471.
10(f)(14)
[Reserved]
10(f)(15)
[Reserved]
*10(f)(16)
Xerox Holdings Corporation Performance Incentive Plan, as amended through October 21, 2021.
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation's and Xerox Corporation’s
Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2021. See SEC File
Numbers 001-39013 and 001-04471.
*10(f)(17)
Form of E-LTIP Performance Share Unit (“PSU”) Award Agreement (2022) under XHCPIP.
Incorporated by reference to Exhibit 10(f)(17) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2022. See SEC File Number 001-39013.
*10(f)(18)
Form of E-LTIP Restricted Stock Unit (“RSU”) Graduated-Vesting Award Agreement (2022) under
XHCPIP.
Incorporated by reference to Exhibit 10(f)(18) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2022. See SEC File Number 001-39013.
*10(f)(19)
Form of E-LTIP RSU Cliff-Vesting Award Agreement (2022) under XHCPIP.
Incorporated by reference to Exhibit 10(f)(19) to Xerox Holdings Corporation's Annual Report on
Form on Form 10-K dated February 23, 2022. See SEC File Number 001-39013.
*10(f)(20)
Form of International Appendix to E-LTIP PSU and RSU Award Agreements (2022) under XHCPIP.
Incorporated by reference to Exhibit 10(f)(20) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2022. See SEC File Number 001-39013.
10(f)(21)
[Reserved]
10(f)(22)
[Reserved]
*10(f)(23)
Form of 2023 Restricted Stock Unit Award Agreement, 3-year, cash-settled under XHCPIP,
amended and effective as of October 21, 2021.
Incorporated by reference to Exhibit 10(f)(23) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2023. See SEC File Number 001-39013.
Xerox 2024 Annual Report 170
*10(f)(24)
Form of 2023 Restricted Stock Unit Award Agreement, 2-year, cash-settled under XHCPIP,
amended and effective as of October 21, 2021.
Incorporated by reference to Exhibit 10(f)(24) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2023. See SEC File Number 001-39013.
*10(f)(25)
Form of 2023 Performance Stock Unit Award Agreement, cash-settled under XHCPIP, amended
and effective as of October 21, 2021.
Incorporated by reference to Exhibit 10(f)(25) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2023. See SEC File Number 001-39013.
*10(f)(26)
Form of 2023 E-LTIP Restricted Stock Unit Award Agreement, 3-Year under XHCPIP, amended
and effective as of October 21, 2021.
Incorporated by reference to Exhibit 10(f)(26) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2023. See SEC File Number 001-39013.
*10(f)(27)
Form of 2023 E-LTIP Restricted Stock Unit Award Agreement, 2-Year under XHCPIP, amended
and effective as of October 21, 2021.
Incorporated by reference to Exhibit 10(f)(27) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2023. See SEC File Number 001-39013.
*10(f)(28)
Form of 2023 Restricted Stock Unit Award Agreement, 3-year under XHCPIP, amended and
effective as of October 21, 2021.
Incorporated by reference to Exhibit 10(f)(28) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2023. See SEC File Number 001-39013.
*10(f)(29)
Form of 2023 Restricted Stock Unit Award Agreement, 2-year under XHCPIP, amended and
effective as of October 21, 2021.
Incorporated by reference to Exhibit 10(f)(29) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2023. See SEC File Number 001-39013.
*10(f)(30)
Form of 2023 E-LTIP Performance Stock Unit Award Agreement, 2-year under XHCPIP, amended
and effective as of October 21, 2021.
Incorporated by reference to Exhibit 10(f)(30) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2023. See SEC File Number 001-39013.
*10(f)(31)
Form of 2023 Performance Stock Unit Award Agreement under XHCPIP, amended and effective
as of October 21, 2021.
Incorporated by reference to Exhibit 10(f)(31) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2023. See SEC File Number 001-39013.
10(f)(32)
[Reserved]
10(f)(33)
[Reserved]
10(f)(34)
[Reserved]
10(f)(35)
[Reserved]
10(f)(36)
[Reserved]
10(f)(37)
[Reserved]
*10(f)(38)
Form of 2023 XSIP Performance Stock Unit Award Agreement, cash-settled under XHCPIP,
amended and effective on February 21, 2024.
Incorporated by reference to Exhibit 10(f)(38) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2024. See SEC File Number 001-39013.
*10(f)(39)
Form of 2023 XSIP Performance Stock Unit Award Agreement, stock-settled under XHCPIP,
amended and effective on February 21, 2024.
Incorporated by reference to Exhibit 10(f)(39) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2024. See SEC File Number 001-39013.
*10(f)(40)
Form of 2023 E-LTIP Performance Stock Unit Award Agreement, under XHCPIP, amended and
effective on February 21, 2024.
Incorporated by reference to Exhibit 10(f)(40) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2024. See SEC File Number 001-39013.
*10(f)(41)
Form of 2024 XSIP Performance Stock Unit Award Agreement, cash-settled under XHCPIP,
amended and effective on February 21, 2024.
Incorporated by reference to Exhibit 10(f)(41) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2024. See SEC File Number 001-39013.
Xerox 2024 Annual Report 171
*10(f)(42)
Form of 2024 XSIP Performance Stock Unit Award Agreement, stock-settled under XHCPIP,
amended and effective on February 21, 2024.
Incorporated by reference to Exhibit 10(f)(42) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2024. See SEC File Number 001-39013.
*10(f)(43)
Form of 2024 E-LTIP Performance Stock Unit Award Agreement.
Incorporated by reference to Exhibit 10(f)(43) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2024. See SEC File Number 001-39013.
*10(f)(44)
Form of 2024 XSIP Restricted Stock Unit Award Agreement, under XHCPIP, amended and
effective on February 21, 2024.
Incorporated by reference to Exhibit 10(f)(44) to Xerox Holdings Corporation's Annual Report on
Form 10-K dated February 23, 2024. See SEC File Number 001-39013.
*10(f)(45)
Performance Elements for 2025 Executive Long-Term Incentive Program
*10(f)(46)
Management Incentive Plan for 2024 Performance
*10(f)(47)
Management Incentive Plan for 2025
*10(f)(48)
Form of 2025 ELTIP Performance Share Unit Award Agreement Pursuant To Xerox Holdings
Corporation 2024 Equity And Performance Incentive Plan - 3 Year, Effective February 19, 2025.
*10(f)(49)
Form of 2025 ELTIP Restricted Stock Unit Award Agreement Pursuant To Xerox Holdings
Corporation 2024 Equity And Performance Incentive Plan - 2 Year CEO/COO, Effective February
19, 2025.
*10(f)(50)
Form of 2025 ELTIP Restricted Stock Unit Award Agreement Pursuant To Xerox Holdings
Corporation 2024 Equity And Performance Incentive Plan - 3 Year, Effective February 19, 2025.
*10(f)(51)
Form of 2025 ELTIP Restricted Stock Unit Award Agreement Pursuant To Xerox Holdings
Corporation 2024 Equity And Performance Incentive Plan - 3 Year CEO/COO, Effective February
19, 2025.
*10(f)(52)
Form of 2025 XSIP Restricted Stock Unit Award Agreement Pursuant To Xerox Holdings
Corporation 2024 Equity And Performance Incentive Plan - 2 Year, Effective February 19, 2025.
*10(f)(53)
Form of 2025 XSIP Restricted Stock Unit Award Agreement Pursuant To Xerox Holdings
Corporation 2024 Equity And Performance Incentive Plan - 2 Year Cash-Settled, Effective
February 19, 2025.
*10(f)(54)
Form of 2025 XSIP Restricted Stock Unit Award Agreement Pursuant To Xerox Holdings
Corporation 2024 Equity And Performance Incentive Plan - 3 Year, Effective February 19, 2025.
*10(f)(55)
Form of 2025 XSIP Restricted Stock Unit Award Agreement Pursuant To Xerox Holdings
Corporation 2024 Equity And Performance Incentive Plan - 3 Year Cash Settled, Effective
February 19, 2025.
*10(f)(56)
Form of 2025 ELTIP Performance Share Unit Award Agreement For CEO And COO Pursuant To
Xerox Holdings Corporation 2024 Equity And Performance Incentive Plan - 3 Year, Effective
February 19, 2025.
*10(f)(57)
Form of 2025 ELTIP Restricted Stock Unit Award Agreement Pursuant To Xerox Holdings
Corporation 2024 Equity And Performance Incentive Plan - 2 Year, Effective February 19, 2025.
*10(f)(58)
2025 Appendix To International Award Agreements Pursuant To Xerox Holdings Corporation 2024
Equity And Performance Incentive Plan.
10(g)
[Reserved]
*10(h)
Uniform Rule dated December 17, 2008 for all Deferred Compensation Promised by Xerox
Corporation.
Incorporated by reference to Exhibit 10(r) to Xerox Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 2008. See SEC File Number 001-04471.
10(i)
Nomination and Standstill Agreement, dated as of January 26, 2021, by and among Xerox
Holdings Corporation, Carl C. Icahn and the other parties named therein.
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation's and Xerox Corporation’s
Current Report on Form 8-K dated January 26, 2021. See SEC File Numbers 001-39013 and
001-04471.
10(j)
Nomination and Standstill Agreement, dated as of January 26, 2021, by and between Xerox
Holdings Corporation and Darwin Deason.
Incorporated by reference to Exhibit 10.2 to Xerox Holdings Corporation's and Xerox Corporation’s
Current Report on Form 8-K dated January 26, 2021. See SEC File Numbers 001-39013 and
001-04471.
Xerox 2024 Annual Report 172
10(k)(1)
[Reserved]
10(k)(2)
[Reserved]
*10(k)(3)
Offer Letter, dated December 29, 2023, by and between Xerox Corporation and Louie Pastor.
Incorporated by reference to Exhibit 10.2 to Xerox Holdings Corporation’s and Xerox Corporation’s
Current Report on Form 8-K dated December 29, 2023. See SEC File Numbers 001-39013 and
001-04471.
*10(l)
Form of Change in Control Severance Agreement, effective January 1, 2024, as approved by the
Compensation Committee of the Board of Directors of Xerox Holdings Corporation.
Incorporated by reference to Exhibit 10.3 to Xerox Holdings Corporation’s and Xerox Corporation’s
Current Report on Form 8-K dated December 29, 2023. See SEC File Numbers 001-39013 and
001-04471.
*10(m)
Form of Indemnification Agreement.
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 10-Q dated November 2, 2022. See SEC File Number
001-39013 and 001-04471.
10(n)
Credit Agreement, dated as of November 17, 2023, by and among XEROX CORPORATION, a
New York corporation, XEROX HOLDINGS CORPORATION, a New York corporation, and each
other Guarantor party thereto, the lenders party thereto and Jefferies Finance LLC, as
administrative agent and collateral agent.
Incorporated by reference to Exhibit 10.1 to Xerox Holding Corporation’s and Xerox Corporation’s
combined Current Report on Form 8-K dated November 17, 2023. See SEC File Numbers
001-39013 and 001-04471.
10(o)
Credit Agreement, dated as of July 7, 2022, among Xerox Corporation, Xerox Holdings
Corporation, certain Lenders signatory thereto, and Citibank, N.A., as administrative agent.
Incorporated by reference to Exhibit 4.2 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Current Report on Form 8-K dated July 13, 2022. See SEC File Numbers 001-39013
and 001-04471.
10(p)
Credit Agreement, dated May 22, 2023, by and among Xerox Corporation, a New York
Corporation, Xerox Holdings Corporation, a New York corporation, and each other Guarantor party
thereto, the lenders and issuing banks party thereto and Citibank, N.A., as administrative agent
and collateral agent.
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated May 23, 2023. See SEC File Number 001-39013.
10(q)
Purchase Agreement dated September 28, 2023 by and between the Company and the Icahn
Parties.
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated September 28, 2023. See SEC File Number
001-39013.
*10(r)
General Release, Non-Competition and Non-Solicitation Agreement, between Xerox Corporation
and Joanne Collins Smee, dated January 10, 2024.
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 8-K dated January 12, 2024. See SEC File Numbers
001-39013 and 001-04471.
10(s)
Form of Capped Call Confirmation
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation’s and Xerox Corporation’s
combined Quarterly Report on Form 8-K dated March 12, 2024. See SEC File Numbers
001-39013 and 001-04471.
10(t)
Amendment No. 2 to Credit Agreement, dated as of June 10, 2024, by and among XEROX
CORPORATION, a New York corporation, XEROX HOLDINGS CORPORATION, a New York
corporation, the other Loan Parties party thereto, the 2024 Incremental Revolving Lenders party
thereto and CITIBANK, N.A., as administrative agent and collateral agent.
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated June 12, 2024. See SEC File Number 001-39013.
*10(u)
2024 Equity and Performance Incentive Plan
Incorporated by reference to Exhibit 99.1 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form S-8 dated June 28, 2024. See SEC File Number 001-39013.
Xerox 2024 Annual Report 173
10(v)
Securities Purchase Agreement by and among Xerox, ITsavvy Holdings, LLC and ITsavvy
Acquisition Company, Inc., dated as of October 15, 2024 (including the form of the Notes).
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated October 17, 2024. See SEC File Number
001-39013.
10(w)
Secured Promissory Note, dated November 20, 2024, by and between Xerox Corporation and
ITsavvy Holdings, LLC.
Incorporated by reference to Exhibit 4.1 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated November 21, 2024. See SEC File Number
001-39013.
10(x)
Secured Promissory Note, dated November 20, 2024, by and between Xerox Corporation and
ITsavvy Holdings, LLC.
Incorporated by reference to Exhibit 4.2 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated November 21,2024. See SEC File Number
001-39013.
10(y)
Equity Purchase Agreement, dated December 22, 2024, by and among Xerox Corporation,
Ninestar Group Company Limited and Lexmark.
Incorporated by reference to Exhibit 2.1 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated December 23,2024. See SEC File Number
001-39013.
10(z)
Commitment Letter, dated December 22, 2024, by and among Xerox Corporation and Morgan
Stanley Senior Funding, Inc., MUFG Bank, LTD., Regions Bank, Truist Bank and Citigroup Global
Markets Inc.
Incorporated by reference to Exhibit 10.2 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated December 23,2024. See SEC File Number
001-39013.
10(aa)
Commitment Letter, dated December 22, 2024, by and among Xerox Holdings Corporation and
DCS Finance, LLC and Christy 2017, LP.
Incorporated by reference to Exhibit 10.3 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated December 23,2024. See SEC File Number
001-39013.
10(bb)
Commitment Letter, dated December 22, 2024, by and among Xerox Corporation, Jefferies
Finance LLC and Jefferies LLC.
Incorporated by reference to Exhibit 10.4 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated December 23,2024. See SEC File Number
001-39013.
*10(cc)
Offer Letter dated September 16, 2024 between Xerox Corporation and Mirlanda Gecaj.
*10(dd)
Offer Letter dated October 31, 2022 between the Company and John G. Bruno.
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated November 14, 2022. See SEC File Number
001-39013.
*10(ee)
Offer Letter dated August 2, 2022, between Steven Bandrowczak, Xerox Holdings Corporation
and Xerox Corporation.
Incorporated by reference to Exhibit 10.1 to Xerox Holdings Corporation's and Xerox Corporation's
combined Current Report on Form 8-K dated August 2, 2022. See SEC File Number 001-39013.
*10(ff)
General Release, Non-Competition and Non-Solicitation Agreement, between Xerox Corporation
and Xavier Heiss, dated February 23, 2025.
14
Company Code of Conduct
19
Company Insider Trading Policy
Incorporated by reference to Exhibit 19 to Xerox Holdings Corporation's Annual Report on Form
10-K dated February 23, 2024. See SEC File Number 001-39013.
21
Subsidiaries of Registrant.
23(a)
Consent of PricewaterhouseCoopers LLP re Xerox Holdings Corporation.
23(b)
Consent of PricewaterhouseCoopers LLP re Xerox Corporation.
31(a)(1)
Certification of Xerox Holdings Corporation CEO pursuant to Rule 13a-14(a) or Rule 15d-14(a).
Xerox 2024 Annual Report 174
31(a)(2)
Certification of Xerox Corporation CEO pursuant to Rule 13a-14(a) or Rule 15d-14(a).
31(b)(1)
Certification of Xerox Holdings Corporation CFO pursuant to Rule 13a-14(a) or Rule 15d-14(a).
31(b)(2)
Certification of Xerox Corporation CFO pursuant to Rule 13a-14(a) or Rule 15d-14(a).
32(a)
Certification of Xerox Holdings Corporation CEO and CFO pursuant to 18 U.S.C. §1350 as
adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
32(b)
Certification of Xerox Corporation CEO and CFO pursuant to 18 U.S.C. §1350 as adopted
pursuant to §906 of the Sarbanes-Oxley Act of 2002.
97
Company Clawback Policy
Incorporated by reference to Exhibit 97 to Xerox Holdings Corporation's Annual Report on Form
10-K dated February 23, 2024. See SEC File Number 001-39013.
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Calculation Linkbase Document
101.LAB
Inline XBRL Taxonomy Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Presentation Linkbase Document
101.DEF
Inline XBRL Taxonomy Definition Document
104
The Cover Page Interactive Data File (formatted as Inline iXBRL and contained in Exhibit 101)
*
Indicates a management contract or compensatory plan or arrangement.
Item 16. Form 10-K Summary
None
Xerox 2024 Annual Report 175
Signatures
Xerox Holdings Corporation
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
XEROX HOLDINGS CORPORATION
/s/ STEVEN J. BANDROWCZAK
Steven J. Bandrowczak
Chief Executive Officer
February 24, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the date indicated.
February 24, 2025
Signature
Title
Principal Executive Officer:
/s/ STEVEN J. BANDROWCZAK
Chief Executive Officer and Director
Steven J. Bandrowczak
Principal Financial Officer:
/S/ MIRLANDA GECAJ
Executive Vice President and Chief Financial Officer
Mirlanda Gecaj
Principal Accounting Officer:
/s/ WILLIAM TWOMEY
Vice President and Chief Accounting Officer
William Twomey
Directors:
/S/ A. SCOTT LETIER
Chairman and Director
A. Scott Letier
/S/ JOHN G. BRUNO
Director
John G. Bruno
/S/ TAMI A. ERWIN
Director
Tami A. Erwin
/S/ PRISCILLA HUNG
Director
Priscilla Hung
/S/ NICHELLE MAYNARD-ELLIOTT
Director
Nichelle Maynard-Elliott
/S/ EDWARD G. MCLAUGHLIN
Director
Edward G. McLaughlin
/S/ JOHN J. ROESE
Director
John J. Roese
/S/ AMY SCHWETZ
Director
Amy Schwetz
Xerox 2024 Annual Report 176
Signatures
Xerox Corporation
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
XEROX CORPORATION
/s/ STEVEN J. BANDROWCZAK
Steven J. Bandrowczak
Chief Executive Officer
February 24, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the date indicated.
February 24, 2025
Signature
Title
Principal Executive Officer:
/s/ STEVEN J. BANDROWCZAK
Chief Executive Officer and Director
Steven J. Bandrowczak
Principal Financial Officer:
/S/ MIRLANDA GECAJ
Executive Vice President and Chief Financial Officer
Mirlanda Gecaj
Principal Accounting Officer:
/s/ WILLIAM TWOMEY
Vice President and Chief Accounting Officer
William Twomey
Directors:
/S/ A. SCOTT LETIER
Chairman and Director
A. Scott Letier
/S/ JOHN G. BRUNO
Director
John G. Bruno
/S/ TAMI A. ERWIN
Director
Tami A. Erwin
/S/ PRISCILLA HUNG
Director
Priscilla Hung
/S/ NICHELLE MAYNARD-ELLIOTT
Director
Nichelle Maynard-Elliott
/S/ EDWARD G. MCLAUGHLIN
Director
Edward G. McLaughlin
/S/ JOHN J. ROESE
Director
John J. Roese
/S/ AMY SCHWETZ
Director
Amy Schwetz
Xerox 2024 Annual Report 177
FYI
Shareholder Information
For investor information, including comprehensive earnings
releases: https://investors.xerox.com/
For shareholder services, call 800.828.6396 (TDD: 800.368.0328)
or 781.575.3222; or write to Computershare Trust Company, N.A.,
PO BOX 43078, Providence, RI 02940-3078; or via online access at
www.computershare.com.
Electronic Delivery Enrollment: Xerox offers shareholders
the convenience of electronic delivery, including immediate
receipt of the Proxy Statement and Annual Report and online
proxy voting.
Registered Shareholders, visit: www.computershare.com/
investor. You are a registered shareholder if you have your stock
certificate in your possession or if the shares are being held
by our transfer agent, Computershare.
Beneficial Shareholders, visit: http://enroll.icsdelivery.com/
xrx. You are a beneficial shareholder if you maintain your
position in Xerox within a brokerage account.
Investor Relations Contact: investorrelations@xerox.com
A D DI T IO N A L I N F O R M AT IO N
Independent Auditors
PricewaterhouseCoopers LLP
263 Tresser Boulevard, Suite 800
Stamford, CT 06901
203.539.3000
2024 Corporate Social Responsibility Report:
https://www.xerox.com/en-us/about/corporate-social-
responsibility
Ethics Helpline:
• Online submission tool: www.xeroxethicshelpline.com
• Phone numbers: U.S. and Canada: 866.XRX.0001;
International numbers located at: www.xerox.com/ethics
Environment, Health, Safety and Sustainability:
www.xerox.com/environment
Governance:
https://www.xerox.com/en-us/about/corporate-social-
responsibility/governance
Xerox Holdings Corporation
401 Merritt 7
Norwalk, CT 06851-1056
United States
www.xerox.com
© 2025 Xerox Holdings Corporation.
All rights reserved. BR41239