What changed in this filing

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Item 1. Business

2025-02-24 compared with 2024-02-23 · 150 added, 141 removed, 171 unchanged (63% of the section changed)

Xerox is a workplace technology company, building and integrating software and hardware for enterprises large and small.

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 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 productivity challenges of a hybrid workplace and distributed workforce.

Xerox serves customers globally in North America, Central and South America, Brazil, Europe, Eurasia, the Middle East, Africa, and India.

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

2023 was the first full year of our Reinvention, which is expected to transform the way we operate, strengthening our core business and improving our financial flexibility so we can invest in solutions, initiatives, and capabilities that will position Xerox as a leading services-led, software-enabled technology solutions provider and deliver long-term, sustainable growth.

In January 2024, we announced a significant reorganization of our business, including the adoption of a business unit-led operating model, a greater focus on partner-led distribution and the establishment of a Global Business Services (GBS) organization to enable enterprise-wide efficiencies and productivity gains.

These changes are expected to both strengthen our core business and position us to capture new, ancillary revenue opportunities over time.

Reinvention is expected to deliver $300 million of annual net adjusted 1 operating income improvement above 2023 levels through 2026, and we expect to achieve more than one-third of that improvement in 2024, due in large part to organizational cost savings associated with the restructuring action that was announced in January 2024.

Operating profit improvement will be driven by three concurrent efforts over the next three years:

• Operating Model Simplification

– Continuous, tech-driven operating efficiencies enabled by GBS.

• Geographic and Offering Simplification:

– Replace direct to end-customer with partner-led distribution model in current markets with lower levels of profitability;

– Narrowed product and service offering focus to areas where we have strategic differentiation.

• Reposition for Growth:

– Tactical investments in Digital and IT Services, driving expanded services penetration among existing and new clients.

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(1) Refer to the "Non-GAAP Financial Measures" section for an explanation of this non-GAAP financial measure.

Divestitures and Other Strategic Changes

We divested certain businesses that are non-core to Print, Digital and IT Services, including PARC, Xerox Research Center of Canada (XRCC), and Elem, our 3D printing business.

We expanded our partnership with PEAC Solutions, an affiliate of HPS Investment Partners, allowing FITTLE to focus exclusively on financial solutions that support the direct sales of Xerox equipment and services.

We also reduced our presence in certain non-strategic markets with lower levels of profitability, such as paper and certain types of IT hardware.

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

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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.

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 customer's technology spending as well as the Total Addressable Market (TAM) through expanded penetration of existing solutions and the development of new, content-driven solutions.

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:

Strengthen Core Businesses, Structural Cost Improvements, and Balanced Capital Allocation.

Xerox 2023 Annual Report 1

Strengthen Core Businesses:

Our Print, Digital and IT Services businesses form the bedrock of our strategic repositioning, from which new capabilities and our client-centric mindset will be leveraged to drive incremental services opportunities and revenue diversification.

Recent changes to our organizational model, including the implementation of a business unit-led organizational structure, rather than a geographic-led go-to-market model, and greater focus on partner-led distribution models, are expected to both strengthen our core business and position us to capture new ancillary revenue opportunities over time.

A business unit-led organizational structure more closely aligns Xerox products and services with the economic buyers of today’s hybrid workplace.

And through the establishment of a global partner ecosystem, we will pursue new partner relationships to expand the reach of our core businesses.

Stronger end-market alignment and partner reach is expected to further improve equipment market share and Print, Digital, and IT services penetration rates with existing and prospective clients.

Structural Cost Improvements:

We continue to implement structural cost improvements to drive higher profitability and total shareholder returns.

Our newly formed GBS organization will drive enterprise-wide efficiency and scalability by centrally coordinating internal processes.

GBS serves as a catalyst for organizational savings in 2024 and an engine for continuous cost improvement going forward.

The optimization of our geographic footprint and product offerings are also expected to generate profit improvements in 2024.

Balanced Capital Allocation:

We believe it is important to directly reward shareholders as we execute our Reinvention.

In 2024, free cash flow is expected to be used to pay our $1 per share dividend and reduce leverage.

Excess free cash flow will be used to tactically invest in projects or acquisitions that deliver high rates of return on invested capital.

Acquisitions and Investments

We maintain a broad M&A pipeline that includes targets within the print industry and adjacent markets.

Further information about our acquisitions and investments can be found in Note 6 - Acquisitions and Divestitures in the Consolidated Financial Statements.

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 2023 we had two operating and reportable segments – Print and Other and FITTLE .

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.

• FITTLE – 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.

• 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

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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 which would have a material adverse effect on our business.

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 FITTLE.

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 the supplies and associated technical service and financing of those products through FITTLE (captured as post sale revenue).

• Entry primarily comprises A4 desktop monochrome and color printers and multifunction printers (MFPs) ranging from small personal devices to office workgroup devices.

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 primarily A3 devices that have more features and can handle higher print volumes and larger paper sizes than entry 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.

Xerox 2023 Annual Report 2

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, on-demand printing of a wide range of applications.

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 cut-sheet inkjet press enables new applications in true high-definition resolution with high fusion ink, AI Powered image quality and advanced productivity technologies.

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, from file preparation to final production, helping customers of all sizes address a wide range of business opportunities including automation, personalization, and even electronic publishing.

Xerox® Services includes 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.

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 Services (MPS), Xerox® Capture & Content Services (CCS) and Xerox® Customer Engagement Services (CES) as well as IT Services.

Our primary offerings in this area are Xerox® Managed Print Services 1 (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.

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As a result, we enhanced our focus on the development and promotion of offerings to help our customers accelerate their digital transformations.

• Managed Print Solutions (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.

• Managed Print Services 1 (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 via our channel partners.

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.

• Capture & Content Services (CCS) enables content digitization, management, workflow automation, and intelligent document processing and includes offerings such as Xerox® Digital Mailroom , where we use scanning and capture technology combined with AI to extract printed and digital information into usable data that is routed into business workflows (such as accounts payable) or into archives, integrating with cloud-based content management systems such as our DocuShare® software.

• Customer Engagement Services (CES) enable the integration of Xerox technology, software, and services to securely design and manage our clients’ personalization and customization of targeted communications.

These services include Xerox® Digital Hub and Cloud Print services, a one-stop shop where customers can 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.

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.

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• 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.

• IT Services provides small and mid-sized clients with cost efficient and secure solutions, including end user computing devices, network infrastructure, communications technology, and a range of managed IT solutions, such as technology product support, professional engineering, and commercial RPA.

FITTLE 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.

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.

Xerox 2023 Annual Report 3

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(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

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While we believe that our portfolio of patents and applications has value, in general no single patent is essential to our business.

In addition, any of our proprietary rights could be challenged, invalidated, or circumvented, or may not provide significant competitive advantages.

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.

We were also party to a number of cross-licensing agreements with companies that also hold substantial patent portfolios.

These agreements vary in subject matter, scope, compensation, significance, and duration.

These agreements vary in subject matter, scope, financials, significance, and duration.

In the U.S., we own 155 trademarks, either registered or applied for.

Outside of the U.S., we own 3,740 trademarks, either registered or applied for.

These trademarks have a perpetual life, subject to periodic renewal requirements.

We vigorously enforce and protect our trademarks.

Environmental, Social, and Governance (ESG)

At our core, is a deep and long-lasting commitment to ESG, a pledge to inspire and support our people, conduct business ethically across the value chain and preserve our planet.

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:

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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, diversity, inclusion and belonging, education, and disaster relief.

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 2023, Xerox employees volunteered for approximately 42,300 hours, an increase of nearly 75% as compared to 2022, and donated approximately $1.1 million, which includes the amount matched by Xerox.

The Xerox 2023 Corporate Social Responsibility (CSR) Report describes our management approach related to ESG.

In 2024, Xerox employees volunteered for approximately 35,200 hours and donated approximately $1 million, which includes the amount matched by Xerox.

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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 Task Force on Climate Change Related Disclosures (TCFD).

(The 2023 CSR Report, SASB report, and TCFD report are accessible at www.xerox.com/CSR.

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.)

With climate change being one of the defining issues of our time, we fast-tracked our net zero goal by 10 years to 2040 and integrated climate change-related risks and opportunities into our Enterprise Risk Management.

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.

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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 6.9% in 2022 (the latest year we reported GHG emissions in our CSR report), bringing our total reduction to approximately 46% from our 2016

Xerox 2023 Annual Report 4

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).

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Circular economy initiatives remain a part of our business strategy.

We have developed several collection and waste reduction programs, while also designing technology to align with the circular economy’s key elements.

Based on data from 2022 (the latest full year data is available), approximately 93% of spent toner cartridges and other consumables, returned through Green World Alliance (Xerox's customer recycling program), are recycled, reused or remanufactured.

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.

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Our Employees

As of December 31, 2023, we had approximately 20,100 employees;

a reduction of approximately 400 employees, or 2.0%, since December 31, 2022.

The reduction in headcount resulted from net attrition (attrition net of gross hires) and restructuring.

On a geographic basis, approximately 10,200 employees were located in the U.S.

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 10,400 employees or approximately 50% of our employees engaged in providing services to customers (direct service and managed services) and approximately 2,400 employees engaged in direct sales.

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.

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employees self-identified as diverse.

As a result of Xerox’s Reinvention and the implementation of our new operating model, in January 2024 the Company announced a 15 percent targeted workforce reduction.

The actions to be taken are expected to be across all levels and areas of the organization.

Proposed reductions will be subject to formal consultation with local works councils and employee representative bodies, where applicable, and we will fully comply with all required notifications, including U.S.

state WARN laws, at the appropriate time.

The decision to reduce our workforce was a difficult but necessary step toward establishing the long-term viability for the Company, and we are committed to providing transition support for affected employees.

Refer to the Recent Changes and Developments section above for additional information regarding Reinvention.

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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.

In 2023, we created and launched a safety training module to raise safety awareness globally, which was completed by approximately 99% of employees.

During 2023 the total number Day Away from Work Injury cases, which relies on employees to self-report, was 102 cases, as compared to 77 cases in 2022.

Diversity, Inclusion and Belonging

Our commitment to diversity began more than half a century ago with our first CEO, Joseph Wilson.

His call for social responsibility, diversity and inclusiveness is a Xerox core value and part of our company DNA.

Joseph Wilson’s vision is still reflected today in our diversity, inclusion and belonging (DIB) roadmap through the development and execution of ESG targets.

In 2023, we continued to make progress to our commitment to DIB by focusing on the areas where we can make the most significant impact.

Advancing our DIB roadmap enables us to have an inclusive approach that addresses client needs, create diverse work teams, facilitate diversity of thought, increase our talent pool, and foster accountability that supports our progress against our ESG metrics.

In 2021, we outlined a 5-year DIB roadmap comprising approximately 140 initiatives.

Through 2023, we have progressed or completed approximately 70% of those initiatives.

Xerox 2023 Annual Report 5

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 is committed to continuously revitalizing our employee experience and is focused on listening to the organization and taking distinct action based on feedback.

Beginning in 2022 and continuing into 2023, approximately 45% of Xerox employees were invited to participate in a variety of feedback processes, from digital focus groups to engagement and inclusion surveys, to ensure that we understand the sentiments of our employees.

The main areas of focus for Xerox based on employee feedback included areas such as employee well-being, leadership and belonging, and flexibility and remote work.

This initiative included a review of our total rewards package, how we support the development of our employees and our people leaders, and identifying how we leverage both our physical and virtual working environments to ensure maximum collaboration across the enterprise.

Our employee communications system is multi-channeled, including town halls, digital campaigns, and pod casts, to keep our employees linked to Xerox’s vision, mission, and values.

We evaluate our leaders against leadership attributes aligned to our corporate strategy.

We support a structured semi-annual performance management evaluation process, which enables focused goal setting, clarification of employee and career development needs, and performance evaluation.

In addition, Xerox sponsors numerous corporate development initiatives for targeted populations (i.e., high potentials, women in leadership, senior leaders identified for future executive roles, etc.), and corporate processes such as succession planning to ensure that we have a clear leadership pipeline for critical organizational roles.

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.

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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

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• Drive shareholder value :

support our business strategy and culture.

support our business strategy that drives value over time.

• Align with performance :

incentivize the right behaviors – when the Company wins, our employees win.

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 workforce.

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, and short-term and long-term incentive programs.

Our compensation offerings include base pay, as well as short-term and long-term incentive programs.

Our short-term programs include:

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and a sales compensation program that tightly aligns our sales force with business goals.

A Long-Term Incentive (LTI) equity-based program reinforces alignment of our leaders and key talent with shareholders.

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 benefit offerings provide our employees with choice and flexibility to help them reach their health and financial goals.

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:

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Employee Training

All employees are required to complete annual training in ethics, privacy, DIB, and security.

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.

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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 and Development (L&D) function is focused on business agility and driving digital transformation across our workforce.

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 L&D 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.

During 2023, approximately 95% of Xerox employees completed at least one or more formal learning offering, which includes both required and voluntary training.

Using Xerox’s global learning platform, Xerox employees completed approximately 257,000 courses, over approximately 203,000 hours.

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

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Material Government Regulations

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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.

However, as a result of increased government focus in the U.S.

and globally, we believe that environmental and global trade regulations could potentially materially impact our business in the future.

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 services that support the new hybrid workplace and distributed workforce.

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., U.K., and Canada through Xerox Business Solutions (XBS) which is comprised of regional core companies that provide office technology and services, including Managed IT Services, to small and mid-sized markets clients, and through the acquisitions of dealers and IT Services providers internationally.

and Canada along with Mexico, Brazil, Central and South America) and EMEA (comprised of Europe, the Middle East, Africa and India).

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.

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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, there may be additional non-print competitors.

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.

Customer Financing (FITTLE)

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.

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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, 2023, we had approximately $2.5 billion of finance receivables and $265 million of Equipment on operating leases, net, or Total Finance assets of approximately $2.8 billion.

We maintain an assumed 7:1 leverage ratio of debt to equity as

At December 31, 2024, we had

Xerox 2024 Annual Report 7

compared to our Finance assets, which results in approximately $2.4 billion of our $3.3 billion of debt being allocated to our financing business.

In December 2022, the Company entered into a 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.

Accordingly, the receivables sold were derecognized from our financial statements and HPS does not have recourse back to the Company for uncollectible receivables.

During the second quarter 2023, the finance receivables funding agreement with HPS was amended to expand the pools of finance receivables eligible for sale to include the sale of the underlying leased equipment to HPS.

The effect of these transactions has accordingly reduced financing debt as funding for certain new finance receivable originations is through the direct sale to HPS.

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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.

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Our manufacturing and distribution facilities are located around the world.

Our largest manufacturing site is in Webster, N.Y., where we produce the Xerox® iGen, Xerox® Nuvera, and Xerox® Baltoro production printing presses as well as key components and consumables for our products, such as toner.

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;

Venray, Netherlands;

Ontario, Canada;

and Oklahoma City, OK.

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FUJIFILM Business Innovation Corp.

(formerly Fuji Xerox Co., Ltd.) is our largest partner with whom we maintain product sourcing agreements for specific products primarily across our mid-range and high-end portfolios.

(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.

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we perform these operations at our facility in Cincinnati, OH, and globally with a network of various partners.

FUJIFILM Business Innovation Corp.

continues to be one of our strategic suppliers, and in 2023 we renewed our multi-year contract with them.

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.

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Xerox 2024 Annual Report 8

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Other Information

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Xerox®, ConnectKey®, FreeFlow®, Gen3®, Xerox Nuvera®, Baltoro® and any other trademarks that are used here are trademarks of Xerox Corporation in the United States and/or other countries.

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

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business