1 unchanged sentence
Xerox 2024 Annual Report 70
+Added: Table of Contents Legal Sign-off 2.24.25
Report of Independent Registered Public Accounting Firm
1 unchanged sentence
Opinions on the Financial Statements and Internal Control over Financial Reporting
−Removed: We have audited the accompanying consolidated balance sheets of Xerox Holdings Corporation and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income (loss), of comprehensive loss, of shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2023, 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”).
+Added: 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).
14 unchanged sentences
We believe that our audits provide a reasonable basis for our opinions.
+Added: As described in Management’s Report on Internal Control over Financial Reporting, management has excluded ITsavvy Acquisition Company, Inc.
+Added: ("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.
+Added: We have also excluded ITsavvy from our audit of internal control over financial reporting.
+Added: 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.
+Added: Xerox 2024 Annual Report 71
+Added: Table of Contents Legal Sign-off 2.24.25
Definition and Limitations of Internal Control over Financial Reporting
3 unchanged sentences
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.
−Removed: Xerox 2023 Annual Report 63
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
3 unchanged sentences
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.
−Removed: Realizability of Deferred Tax Assets - U.S.
−Removed: Foreign Tax Credit Carryforwards
−Removed: As described in Note 19 to the consolidated financial statements, the Company has recorded $892 million of deferred tax assets, net of a valuation allowance of $375 million, as of December 31, 2023, which includes U.S.
−Removed: foreign tax credit carryforwards with a limited life.
−Removed: Management records the estimated future tax effects of temporary differences between the tax bases of assets and amounts reported, as well as net operating loss and tax credit carryforwards.
−Removed: 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.
−Removed: Management applied judgment in assessing the realizability of these deferred tax assets and the need for any valuation allowances, in particular the realizability of U.S.
−Removed: foreign tax credit carryforwards with a limited life.
−Removed: In determining the amount of deferred tax assets that are more-likely-than-not to be realized, management considered historical profitability, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies.
−Removed: The principal considerations for our determination that performing procedures relating to the realizability of deferred tax assets related to the U.S.
−Removed: foreign tax credit carryforwards is a critical audit matter are (i) the significant judgment by management in assessing the realizability of deferred tax assets related to the Company’s U.S.
−Removed: foreign tax credit carryforwards with a limited life;
−Removed: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and in evaluating management’s significant assumptions related to projected future taxable income;
−Removed: (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
+Added: Goodwill Impairment Assessment - Print and Other Reporting Unit
+Added: 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.
+Added: Management assesses goodwill for impairment at least annually, and more frequently if indicators of impairment exist.
+Added: If the fair value exceeds the carrying value, goodwill is not considered impaired.
+Added: If the carrying value exceeds the fair value, goodwill is considered impaired, and management would recognize an impairment loss for the excess.
+Added: 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.
+Added: In the third quarter of 2024, management concluded that a quantitative impairment test of goodwill was required.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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;
+Added: (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;
+Added: 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.
−Removed: These procedures included testing the effectiveness of controls relating to the realizability of deferred tax assets, including controls over projected future taxable income.
−Removed: These procedures also included, among others, evaluating management’s assessment of the realizability of deferred tax assets related to the Company’s U.S.
−Removed: foreign tax credit carryforwards with a limited life, including evaluating the reasonableness of the assumptions related to projected future taxable income.
−Removed: Evaluating management’s assumptions related to projected future taxable income involved evaluating whether the assumptions were reasonable by considering historical profitability as well as other audit evidence related to management’s forecasts.
−Removed: Professionals with specialized skill and knowledge were used to assist in the evaluation of management’s application of income tax law in determining projected future taxable income and the assessment of the realizability of deferred tax assets related to the Company’s U.S.
−Removed: foreign tax credit carryforwards with a limited life.
+Added: 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.
+Added: These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Print and Other reporting unit;
+Added: (ii) evaluating the appropriateness of the discounted cash flow method used by management;
+Added: (iii) testing the completeness and
+Added: Xerox 2024 Annual Report 72
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: accuracy of underlying data used in the discounted cash flow method;
+Added: 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.
+Added: 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;
+Added: (ii) the consistency with external market and industry data;
+Added: and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.
+Added: 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
3 unchanged sentences
Xerox 2024 Annual Report 73
+Added: Table of Contents Legal Sign-off 2.24.25
Report of Independent Registered Public Accounting Firm
1 unchanged sentence
Opinions on the Financial Statements and Internal Control over Financial Reporting
−Removed: We have audited the accompanying consolidated balance sheets of Xerox Corporation and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income (loss), of comprehensive loss, of shareholder’s equity and of cash flows for each of the three years in the period ended December 31, 2023, 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”).
+Added: 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).
14 unchanged sentences
We believe that our audits provide a reasonable basis for our opinions.
+Added: As described in Management’s Report on Internal Control over Financial Reporting, management has excluded ITsavvy Acquisition Company, Inc.
+Added: ("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.
+Added: We have also excluded ITsavvy from our audit of internal control over financial reporting.
+Added: 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.
+Added: Xerox 2024 Annual Report 74
+Added: Table of Contents Legal Sign-off 2.24.25
Definition and Limitations of Internal Control over Financial Reporting
3 unchanged sentences
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.
−Removed: Xerox 2023 Annual Report 65
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
3 unchanged sentences
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.
−Removed: Realizability of Deferred Tax Assets - U.S.
−Removed: Foreign Tax Credit Carryforwards
−Removed: As described in Note 19 to the consolidated financial statements, the Company has recorded $892 million of deferred tax assets, net of a valuation allowance of $375 million, as of December 31, 2023, which includes U.S.
−Removed: foreign tax credit carryforwards with a limited life.
−Removed: Management records the estimated future tax effects of temporary differences between the tax bases of assets and amounts reported, as well as net operating loss and tax credit carryforwards.
−Removed: 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.
−Removed: Management applied judgment in assessing the realizability of these deferred tax assets and the need for any valuation allowances, in particular the realizability of U.S.
−Removed: foreign tax credit carryforwards with a limited life.
−Removed: In determining the amount of deferred tax assets that are more-likely-than-not to be realized, management considered historical profitability, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies.
−Removed: The principal considerations for our determination that performing procedures relating to the realizability of deferred tax assets related to the U.S.
−Removed: foreign tax credit carryforwards is a critical audit matter are (i) the significant judgment by management in assessing the realizability of deferred tax assets related to the Company’s U.S.
−Removed: foreign tax credit carryforwards with a limited life;
−Removed: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and in evaluating management’s significant assumptions related to projected future taxable income;
−Removed: (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
+Added: Goodwill Impairment Assessment - Print and Other Reporting Unit
+Added: 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.
+Added: Management assesses goodwill for impairment at least annually, and more frequently if indicators of impairment exist.
+Added: If the fair value exceeds the carrying value, goodwill is not considered impaired.
+Added: If the carrying value exceeds the fair value, goodwill is considered impaired, and management would recognize an impairment loss for the excess.
+Added: 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.
+Added: In the third quarter of 2024, management concluded that a quantitative impairment test of goodwill was required.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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;
+Added: (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;
+Added: 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.
−Removed: These procedures included testing the effectiveness of controls relating to the realizability of deferred tax assets, including controls over projected future taxable income.
−Removed: These procedures also included, among others, evaluating management’s assessment of the realizability of deferred tax assets related to the Company’s U.S.
−Removed: foreign tax credit carryforwards with a limited life, including evaluating the reasonableness of the assumptions related to projected future taxable income.
−Removed: Evaluating management’s assumptions related to projected future taxable income involved evaluating whether the assumptions were reasonable by considering historical profitability as well as other audit evidence related to management’s forecasts.
−Removed: Professionals with specialized skill and knowledge were used to assist in the evaluation of management’s application of income tax law in determining projected future taxable income and the assessment of the realizability of deferred tax assets related to the Company’s U.S.
−Removed: foreign tax credit carryforwards with a limited life.
+Added: 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.
+Added: These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Print and Other reporting unit;
+Added: (ii) evaluating the appropriateness of the discounted cash flow method used by management;
+Added: (iii) testing the completeness and
+Added: Xerox 2024 Annual Report 75
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: accuracy of underlying data used in the discounted cash flow method;
+Added: 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.
+Added: 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;
+Added: (ii) the consistency with external market and industry data;
+Added: and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.
+Added: 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
3 unchanged sentences
Xerox 2024 Annual Report 76
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Holdings Corporation
13 unchanged sentences
/s/ S TEVEN J.
−Removed: /s/ X AVIER H EISS
/s/ M IRLANDA G ECAJ
+Added: /s/ W ILLIAM T WOMEY
Chief Executive Officer Chief Financial Officer Chief Accounting Officer
Xerox 2024 Annual Report 77
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Corporation
13 unchanged sentences
/s/ S TEVEN J.
−Removed: /s/ X AVIER H EISS
/s/ M IRLANDA G ECAJ
+Added: /s/ W ILLIAM T WOMEY
Chief Executive Officer Chief Financial Officer Chief Accounting Officer
Xerox 2024 Annual Report 78
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Holdings Corporation
−Removed: Consolidated Statements of Income (Loss)
+Added: Consolidated Statements of (Loss) Income
Year Ended December 31,
13 unchanged sentences
Amortization of intangible assets 73 43 42
+Added: Divestitures 47 — —
PARC donation — 132 —
2 unchanged sentences
Loss before Income Taxes ( 1,216 ) ( 28 ) ( 325 )
−Removed: Income tax benefit ( 29 ) ( 3 ) ( 17 )
−Removed: Net Income (Loss) 1 ( 322 ) ( 455 )
+Added: Income tax expense (benefit) 105 ( 29 ) ( 3 )
+Added: Net (Loss) Income ( 1,321 ) 1 ( 322 )
Preferred stock dividends, net ( 14 ) ( 14 ) ( 14 )
4 unchanged sentences
Xerox 2024 Annual Report 79
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Holdings Corporation
2 unchanged sentences
(in millions) 2024 2023 2022
−Removed: Net Income (Loss) $ 1 $ ( 322 ) $ ( 455 )
−Removed: Other Comprehensive Income (Loss), Net (1)
+Added: Net (Loss) Income $ ( 1,321 ) $ 1 $ ( 322 )
+Added: Other Comprehensive (Loss) Income, Net (1)
Translation adjustments, net ( 120 ) 191 ( 376 )
1 unchanged sentence
Changes in defined benefit plans, net 88 ( 331 ) ( 171 )
−Removed: Other Comprehensive (Loss) Income, Net ( 139 ) ( 549 ) 344
+Added: Other Comprehensive Loss, Net ( 23 ) ( 139 ) ( 549 )
Comprehensive Loss, Net $ ( 1,344 ) $ ( 138 ) $ ( 871 )
_____________
−Removed: (1) Refer to Note 24 - Other Comprehensive (Loss) Income for gross components of Other Comprehensive (Loss) Income, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.
+Added: (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
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Holdings Corporation
41 unchanged sentences
Xerox 2024 Annual Report 81
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Holdings Corporation
3 unchanged sentences
Cash Flows from Operating Activities
−Removed: Net Income (Loss) $ 1 $ ( 322 ) $ ( 455 )
−Removed: Adjustments required to reconcile Net income (loss) to Cash flows provided by operating activities
+Added: Net (Loss) Income $ ( 1,321 ) $ 1 $ ( 322 )
+Added: Adjustments required to reconcile Net (loss) income to Cash flows provided by operating activities
Depreciation and amortization 274 251 270
2 unchanged sentences
Net gain on sales of businesses and assets ( 8 ) ( 39 ) ( 56 )
+Added: Divestitures 47 — —
PARC donation — 132 —
5 unchanged sentences
Contributions to retirement plans ( 145 ) ( 102 ) ( 124 )
−Removed: (Increase) decrease in accounts receivable and billed portion of finance receivables ( 5 ) ( 48 ) 41
−Removed: Decrease (increase) in inventories 123 ( 143 ) 88
+Added: Decrease (increase) in accounts receivable and billed portion of finance receivables 71 ( 5 ) ( 48 )
+Added: (Increase) decrease in inventories ( 122 ) 123 ( 143 )
Increase in equipment on operating leases ( 107 ) ( 141 ) ( 112 )
Decrease (increase) in finance receivables 663 614 ( 141 )
−Removed: Decrease in other current and long-term assets 16 27 68
+Added: (Increase) decrease in other current and long-term assets ( 14 ) 16 27
(Decrease) increase in accounts payable ( 48 ) ( 290 ) 278
−Removed: Increase in accrued compensation 48 34 9
+Added: (Decrease) increase in accrued compensation ( 78 ) 48 34
(Decrease) increase in other current and long-term liabilities ( 47 ) ( 114 ) 9
12 unchanged sentences
Payments on long-term debt ( 992 ) ( 1,874 ) ( 1,723 )
+Added: Purchases of capped calls ( 23 ) — —
Dividends ( 141 ) ( 165 ) ( 174 )
3 unchanged sentences
Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 28 ) ( 1 ) ( 29 )
−Removed: Decrease in cash, cash equivalents and restricted cash ( 522 ) ( 770 ) ( 782 )
+Added: 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
2 unchanged sentences
Xerox 2024 Annual Report 82
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Holdings Corporation
7 unchanged sentences
Balance at December 31, 2021 $ 168 $ 1,802 $ ( 177 ) $ 5,631 $ ( 2,988 ) $ 4,436 $ 7 $ 4,443
−Removed: Comprehensive (loss) income, net — — — ( 455 ) 344 ( 111 ) — ( 111 )
+Added: Comprehensive loss, net — — — ( 322 ) ( 549 ) ( 871 ) — ( 871 )
Cash dividends declared-common (3)
8 unchanged sentences
Balance at December 31, 2022 $ 156 $ 1,588 $ — $ 5,136 $ ( 3,537 ) $ 3,343 $ 10 $ 3,353
−Removed: Comprehensive loss, net — — — ( 322 ) ( 549 ) ( 871 ) — ( 871 )
+Added: Comprehensive income (loss), net — — — 1 ( 139 ) ( 138 ) — ( 138 )
Cash dividends declared-common (3)
8 unchanged sentences
Balance at December 31, 2023 $ 123 $ 1,114 $ — $ 4,977 $ ( 3,676 ) $ 2,538 $ 10 $ 2,548
−Removed: Comprehensive income (loss), net — — — 1 ( 139 ) ( 138 ) — ( 138 )
+Added: Comprehensive loss, net — — — ( 1,321 ) ( 23 ) ( 1,344 ) — ( 1,344 )
Cash dividends declared-common (3)
2 unchanged sentences
— — — ( 14 ) — ( 14 ) — ( 14 )
+Added: Purchases of capped calls (5)
+Added: — ( 17 ) — — — ( 17 ) — ( 17 )
Stock option and incentive plans, net 1 40 — — — 41 — 41
−Removed: Common stock repurchased — — ( 553 ) — — ( 553 ) — ( 553 )
−Removed: Cancellation of treasury stock ( 34 ) ( 519 ) 553 — — — — —
Transactions with noncontrolling interests — — — — — — ( 4 ) ( 4 )
6 unchanged sentences
(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.
+Added: (5) The purchases of the capped calls resulted in a tax benefit of approximately $ 6 .
+Added: 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
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Corporation
−Removed: Consolidated Statements of Income (Loss)
+Added: Consolidated Statements of (Loss) Income
Year Ended December 31,
13 unchanged sentences
Amortization of intangible assets 73 43 42
+Added: Divestitures 47 — —
PARC donation — 132 —
2 unchanged sentences
Loss before Income Taxes ( 1,211 ) ( 28 ) ( 325 )
−Removed: Income tax benefit ( 29 ) ( 3 ) ( 17 )
−Removed: Net Income (Loss) $ 1 $ ( 322 ) $ ( 455 )
+Added: Income tax expense (benefit) 105 ( 29 ) ( 3 )
+Added: Net (Loss) Income $ ( 1,316 ) $ 1 $ ( 322 )
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 84
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Corporation
2 unchanged sentences
(in millions) 2024 2023 2022
−Removed: Net Income (Loss) $ 1 $ ( 322 ) $ ( 455 )
−Removed: Other Comprehensive Income (Loss), Net (1)
+Added: Net (Loss) Income $ ( 1,316 ) $ 1 $ ( 322 )
+Added: Other Comprehensive (Loss) Income , Net (1)
Translation adjustments, net ( 120 ) 191 ( 376 )
1 unchanged sentence
Changes in defined benefit plans, net 88 ( 331 ) ( 171 )
−Removed: Other Comprehensive (Loss) Income, Net ( 139 ) ( 549 ) 344
+Added: Other Comprehensive Loss, Net ( 23 ) ( 139 ) ( 549 )
Comprehensive Loss, Net $ ( 1,339 ) $ ( 138 ) $ ( 871 )
_____________
−Removed: (1) Refer to Note 24 - Other Comprehensive (Loss) Income for gross components of Other Comprehensive (Loss) Income, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.
+Added: (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
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Corporation
18 unchanged sentences
Short-term debt and current portion of long-term debt $ 197 $ 567
+Added: Short-term related party debt 388 —
Accounts payable 1,023 1,044
3 unchanged sentences
Long-term debt 1,180 1,213
−Removed: Related party debt 1,497 1,496
+Added: Long-term related party debt 1,634 1,497
Pension and other benefit liabilities 1,088 1,216
13 unchanged sentences
Xerox 2024 Annual Report 86
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Corporation
3 unchanged sentences
Cash Flows from Operating Activities
−Removed: Net Income (Loss) $ 1 $ ( 322 ) $ ( 455 )
−Removed: Adjustments required to reconcile Net income (loss) to Cash flows provided by operating activities
+Added: Net (Loss) Income $ ( 1,316 ) $ 1 $ ( 322 )
+Added: Adjustments required to reconcile Net (loss) income to Cash flows provided by operating activities
Depreciation and amortization 274 251 270
2 unchanged sentences
Net gain on sales of businesses and assets ( 8 ) ( 39 ) ( 56 )
+Added: Divestitures 47 — —
PARC donation — 132 —
5 unchanged sentences
Contributions to retirement plans ( 145 ) ( 102 ) ( 124 )
−Removed: (Increase) decrease in accounts receivable and billed portion of finance receivables ( 5 ) ( 48 ) 41
−Removed: Decrease (increase) in inventories 123 ( 143 ) 88
+Added: Decrease (increase) in accounts receivable and billed portion of finance receivables 71 ( 5 ) ( 48 )
+Added: (Increase) decrease in inventories ( 122 ) 123 ( 143 )
Increase in equipment on operating leases ( 107 ) ( 141 ) ( 112 )
Decrease (increase) in finance receivables 663 614 ( 141 )
−Removed: Decrease in other current and long-term assets 16 27 68
+Added: (Increase) decrease in other current and long-term assets ( 19 ) 16 27
(Decrease) increase in accounts payable ( 48 ) ( 290 ) 278
−Removed: Increase in accrued compensation 48 34 9
+Added: (Decrease) increase in accrued compensation ( 78 ) 48 34
(Decrease) increase in other current and long-term liabilities ( 47 ) ( 114 ) 9
16 unchanged sentences
Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 28 ) ( 1 ) ( 29 )
−Removed: Decrease in cash, cash equivalents and restricted cash ( 522 ) ( 770 ) ( 782 )
+Added: 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
2 unchanged sentences
Xerox 2024 Annual Report 87
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Corporation
6 unchanged sentences
Balance at December 31, 2021 $ 3,202 $ 4,476 $ ( 2,988 ) $ 4,690 $ 7 $ 4,697
−Removed: Comprehensive (loss) income, net — ( 455 ) 344 ( 111 ) — ( 111 )
−Removed: Dividends declared to parent — ( 903 ) — ( 903 ) — ( 903 )
−Removed: Intercompany loan capitalization (2)
−Removed: ( 1,494 ) — — ( 1,494 ) — ( 1,494 )
−Removed: Transfers to parent ( 193 ) — — ( 193 ) — ( 193 )
−Removed: Transactions with noncontrolling interests 1 — — 1 4 5
−Removed: Distributions to noncontrolling interests — — — — ( 1 ) ( 1 )
−Removed: Balance at December 31, 2021 $ 3,202 $ 4,476 $ ( 2,988 ) $ 4,690 $ 7 $ 4,697
Comprehensive loss, net — ( 322 ) ( 549 ) ( 871 ) — ( 871 )
10 unchanged sentences
Balance at December 31, 2023 $ 3,485 $ 2,959 $ ( 3,676 ) $ 2,768 $ 10 $ 2,778
+Added: Comprehensive loss, net — ( 1,316 ) ( 23 ) ( 1,339 ) — ( 1,339 )
+Added: Dividends declared to parent — ( 139 ) — ( 139 ) — ( 139 )
+Added: Transfers from parent 2 — — 2 — 2
+Added: Transactions with noncontrolling interests — — — — ( 4 ) ( 4 )
+Added: Distributions to noncontrolling interests — — — — ( 2 ) ( 2 )
+Added: Balance at December 31, 2024 $ 3,487 $ 1,504 $ ( 3,699 ) $ 1,292 $ 4 $ 1,296
_____________
(1) AOCL - Accumulated other comprehensive loss.
−Removed: (2) Refer to Note 15 - Debt for information regarding capitalization of balance to Intercompany Loan with Xerox Holdings Corporation.
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2024 Annual Report 88
+Added: Table of Contents Legal Sign-off 2.24.25
Xerox Holdings Corporation
3 unchanged sentences
Note 1 – Basis of Presentation
−Removed: 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.
+Added: 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.
4 unchanged sentences
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).
+Added: 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.
4 unchanged sentences
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.
−Removed: Xerox serves customers globally in North America, Central and South America, Brazil, Europe, Eurasia, the Middle East, Africa and India.
−Removed: Xerox Holdings' other direct subsidiary, Xerox Ventures LLC, 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.
+Added: Xerox serves customers globally in North America, Latin America, Brazil, Europe, Eurasia, the Middle East, Africa and India.
+Added: 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.
+Added: At December 31, 2023 Xerox Ventures, LLC held investments of $ 26 .
+Added: 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.
−Removed: Xerox Ventures LLC had investments of approximately $ 26 and $ 21 at December 31, 2023 and 2022, respectively.
−Removed: In January 2024, Myriad Ventures Fund I LP was established, and Xerox Ventures LLC investments were transferred to this new entity, which will continue to be fully consolidated by Xerox Holdings.
+Added: At December 31, 2024, Myriad had investments of $ 40 .
Basis of Consolidation
1 unchanged sentence
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.
−Removed: Operating results of acquired businesses are included in the Consolidated Statements of Income (Loss) from the date of acquisition.
+Added: 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.
−Removed: Operating results for variable interest entities in which we are determined to be the primary beneficiary are included in the Consolidated Statements of Income (Loss) from the date such determination is made.
−Removed: For convenience and ease of reference, we refer to the financial statement caption “Loss before Income Taxes” as “pre-tax loss” throughout the Notes to the Consolidated Financial Statements.
−Removed: Certain reclassifications have been made to the amounts for prior years in order to conform to the current year’s presentation.
−Removed: Xerox 2023 Annual Report 79
+Added: 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
1 unchanged sentence
Future events and their effects cannot be predicted with certainty;
−Removed: accordingly, our accounting estimates require the exercise of judgment.
+Added: accordingly, our accounting estimates
+Added: Xerox 2024 Annual Report 89
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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.
9 unchanged sentences
Accounting Standard Updates to be Adopted:
+Added: Income Tax Disclosures
+Added: In December 2023, the FASB issued ASU 2023-09 , Income Taxes (Topic 740):
+Added: 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.
+Added: 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.
+Added: We are currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.
+Added: Income Statement
+Added: In November 2024, the FASB issued ASU 2024-03 , Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
+Added: Disaggregation of Income Statement Expenses , which is intended to improve disclosures related to certain income statement expenses of the Company.
+Added: 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.
+Added: We are currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.
+Added: In November 2024, the FASB issued ASU 2024-04 , Debt with Conversion and Other Options (Subtopic 470-20):
+Added: 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.
+Added: 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.
+Added: We are currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.
+Added: Accounting Standard Updates Recently Adopted:
Reference Rate Reform
3 unchanged sentences
These ASUs were effective commencing with our quarter ended March 31, 2020 through December 31, 2022.
−Removed: In December 2022, the FASB issued ASU 2022-06 , Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, which defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.
−Removed: There has been no material impact to date as a result of adopting these ASUs on reference rate reform.
−Removed: However, we continue to evaluate potential future impacts that may result from the discontinuation of LIBOR or other reference rates as well as the accounting provided in this update on our financial condition, results of operations, and cash flows.
+Added: 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,
+Added: Xerox 2024 Annual Report 90
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 2024, after which entities will no longer be permitted to apply the relief in Topic 848.
+Added: This ASU did not have an impact on our financial condition, results of operations, and cash flows.
Segment Disclosures
1 unchanged sentence
Improvements to Reportable Segment Disclosures , which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses.
−Removed: The update will require 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.
−Removed: The amendments are effective for the Company's annual periods beginning January 1, 2024, and interim periods beginning January 1, 2025, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements.
−Removed: We are currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.
−Removed: Income Tax Disclosures
−Removed: In December 2023, the FASB issued ASU 2023-09 , Income Taxes (Topic 740):
−Removed: 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.
−Removed: The amendments are effective for the Company’s annual periods beginning January 1, 2025, with early adoption
−Removed: Xerox 2023 Annual Report 80
−Removed: permitted, and should be applied either prospectively or retrospectively.
−Removed: We are currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.
−Removed: Accounting Standard Updates Recently Adopted:
+Added: 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.
+Added: 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.
+Added: This ASU only requires additional disclosures, and did not have an impact on the company’s financial condition, results of operations or cash flows.
+Added: Refer to Note 4 - Segment and Geographic Area Reporting for the required disclosures effective January 1, 2024.
In September 2022, the FASB issued ASU 2022-04 , Liabilities - Supplier Finance Programs (Subtopic 405-50):
2 unchanged sentences
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.
−Removed: The new standard’s requirement to disclose a rollforward of obligations outstanding will be effective for our fiscal year beginning on January 1, 2024.
−Removed: Refer to Note 14 - Supplementary Financial Information for the required disclosures effective January 1, 2023.
+Added: The new standard’s requirement to disclose a rollforward of obligations outstanding was effective for our fiscal year beginning on January 1, 2024.
+Added: Refer to Note 14 - Supplementary Financial Information for the required disclosures.
Financial Instruments
12 unchanged sentences
Impacts on future periods will depend on the amounts of government assistance received.
−Removed: 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, we do not expect the adoption to have a material impact on our financial condition, results of operations, and cash flows in future periods.
+Added: 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
4 unchanged sentences
The adoption of this update did not have a material impact on the Company’s consolidated financial statements and related disclosures.
−Removed: The impact of adopting the new standard will depend on the magnitude of future acquisitions.
The standard did not impact contract assets or liabilities acquired in business combinations that occurred prior to the adoption date.
+Added: Xerox 2024 Annual Report 91
+Added: Table of Contents Legal Sign-off 2.24.25
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).
1 unchanged sentence
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.
−Removed: We adopted this
−Removed: Xerox 2023 Annual Report 81
−Removed: update effective for our fiscal year beginning January 1, 2022.
−Removed: The adoption of this update did not have a material impact on the Company’s consolidated financial statements and related disclosures.
−Removed: In December 2019, the FASB issued ASU 2019-12 , Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes, which was intended to simplify various aspects related to accounting for income taxes .
−Removed: ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.
We adopted this update effective for our fiscal year beginning January 1, 2022.
−Removed: The adoption did not have a material impact on our results of operations, financial position, cash flows or disclosures.
+Added: The adoption of this update did not have a material impact on the Company’s consolidated financial statements and related disclosures.
Other Updates
1 unchanged sentence
Those updates are as follows:
+Added: • Codification Improvements:
+Added: ASU 2024-02 , Codification Improvements - Amendments to Remove References to the Concepts Statements.
+Added: This update is effective for our fiscal year beginning after December 15, 2024.
+Added: • Compensation - Stock Compensation:
+Added: ASU 2024-01 , Compensation - Stock Compensation (Topic 718) -
+Added: Scope Applications of Profits Interest and Similar Awards.
+Added: 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:
24 unchanged sentences
Revenue Recognition
−Removed: We generate revenue through the sale of equipment and supplies and by providing maintenance and printing services.
+Added: 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.
4 unchanged sentences
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.
−Removed: For equipment placements that require us to install the product at the customer location, revenue is normally recognized when the equipment has been delivered and installed at the customer location.
+Added: For equipment placements that require us to install the product at
+Added: Xerox 2024 Annual Report 92
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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.
+Added: 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.
−Removed: In arrangements that include minimums, those minimums are normally set below the customer’s estimated page volumes and are not
−Removed: Xerox 2023 Annual Report 82
−Removed: considered substantive.
+Added: 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.
1 unchanged sentence
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.
−Removed: 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.
+Added: Maintenance and support associated with our IT Solutions are recorded as our performance obligations are satisfied.
+Added: A substantial portion of our products are sold with full-service maintenance agreements.
+Added: 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:
−Removed: The Company’s primary service offerings include Managed Print Services, Digital Services and IT Services.
+Added: 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.
15 unchanged sentences
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.
−Removed: 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.
+Added: 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 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.
2 unchanged sentences
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.
−Removed: 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.
+Added: These arrangements also typically include an incremental, variable
+Added: Xerox 2024 Annual Report 93
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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).
2 unchanged sentences
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.
−Removed: 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 billed to the
−Removed: Xerox 2023 Annual Report 83
+Added: 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.
22 unchanged sentences
Shipping and Handling:
−Removed: Shipping and handling costs are accounted for as a fulfillment cost and are included in Cost of sales in the Consolidated Statements of Income (Loss).
+Added: 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.
+Added: Xerox 2024 Annual Report 94
+Added: Table of Contents Legal Sign-off 2.24.25
Other Significant Accounting Policies
6 unchanged sentences
This is the level at which we develop and document our methodology to determine the allowance for credit losses.
−Removed: Xerox 2023 Annual Report 84
−Removed: projected loss rates are primarily based upon historical loss 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.
+Added: 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.
7 unchanged sentences
These securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of securitization.
−Removed: The receivables remain on the balance sheet and classified as Finance receivables, net.
−Removed: The Company continues recognize finance income over the lives of these receivables.
+Added: The receivables remain on the balance sheet and are classified as Finance receivables, net.
+Added: 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.
−Removed: Gains and losses stemming from transfers reported as sales are normally included in revenue in the accompanying statements of income.
+Added: 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.
9 unchanged sentences
Refer to Note 9 - Inventories and Equipment on Operating Leases, Net for further discussion.
+Added: Xerox 2024 Annual Report 95
+Added: Table of Contents Legal Sign-off 2.24.25
Land, Buildings and Equipment on Operating Leases
4 unchanged sentences
Depreciation is computed using the straight-line method.
−Removed: Significant improvements are capitalized, and maintenance and repairs are expensed.
+Added: 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.
3 unchanged sentences
Accordingly, the two primary criteria we use to classify transactions as operating leases or finance leases are:
−Removed: (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
−Removed: Xerox 2023 Annual Report 85
−Removed: 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.
+Added: (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.
23 unchanged sentences
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).
−Removed: Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred.
+Added: Costs incurred for upgrades and enhancements that will not result
+Added: Xerox 2024 Annual Report 96
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: in additional functionality are expensed as incurred.
Amounts expended for Internal Use Software are included in Cash Flows from Investing activities.
8 unchanged sentences
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.
−Removed: Goodwill is not amortized, but rather is
−Removed: Xerox 2023 Annual Report 86
−Removed: 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.
−Removed: We assess Goodwill for impairment at least annually, during the fourth quarter based on balances as of October 1st, and more frequently if indicators of impairment exist or if a decision is made to sell or exit a business.
+Added: 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.
+Added: 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.
−Removed: Consistent with the determination that we had two operating/reportable segments we determined that we had two reporting units – Print and Other, and FITTLE.
+Added: 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.
−Removed: The qualitative impairment test assesses several factors to determine whether it is more-likely-than-not that the fair value of the entity is less than its carrying amount.
−Removed: If we conclude it is more-likely-than-not that the fair value of the entity is less than its carrying amount, a quantitative fair value test is performed.
+Added: 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.
+Added: 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.
−Removed: In a quantitative impairment test, we assess Goodwill by comparing the carrying amount of the entity to its fair value.
−Removed: Fair value of the entity is determined by using a weighted combination of an income approach and a market approach.
+Added: In a quantitative impairment test, we assess Goodwill by comparing the carrying amount of the reporting unit to its fair value.
+Added: 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.
7 unchanged sentences
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.
−Removed: The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations.
−Removed: If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value.
+Added: 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.
+Added: 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.
2 unchanged sentences
Refer to Note 13 - Restructuring Programs for additional information regarding the impairment of long-lived assets in connection with our restructuring programs and initiatives.
+Added: Xerox 2024 Annual Report 97
+Added: Table of Contents Legal Sign-off 2.24.25
Pension and Post-Retirement Benefit Obligations
9 unchanged sentences
Actual returns on plan assets are not immediately recognized in our income statement due to the delayed recognition requirement.
−Removed: 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
−Removed: Xerox 2023 Annual Report 87
−Removed: are specifically allocated to Transitional Retirement Accounts (which are accounted for based on specific plan terms).
+Added: 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.
2 unchanged sentences
The market-related value approach reduces the volatility in net periodic pension cost that would result from using the fair market value approach.
−Removed: The discount rate is used to present value our future anticipated benefit obligations.
+Added: 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.
11 unchanged sentences
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.
+Added: 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.
+Added: 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.
+Added: These restrictions did not apply for all of 2024 and there is settlement accounting for full lump sums paid early in 2024.
+Added: 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.
+Added: Xerox 2024 Annual Report 98
+Added: Table of Contents Legal Sign-off 2.24.25
Research, Development and Engineering (RD&E)
2 unchanged sentences
Sustaining engineering costs were $ 49 , $ 55 and $ 58 in for the years ended December 31, 2024, 2023 and 2022, respectively.
−Removed: Government Grants/Assistance
−Removed: Government grants related to income are recognized as a reduction of related expenses in the Consolidated Statements of Income (Loss) when there is a reasonable assurance that the entity will comply with the conditions attached to the grant and that the grants will be received.
−Removed: The timing and pattern of recognition of government grants is made on a systematic basis over the periods in which the Company recognizes the related expenses or losses that the grants are intended to compensate.
Foreign Currency Translation and Remeasurement
6 unchanged sentences
dollar effects of rate changes recorded in Currency (gains) and losses within Other expenses, net together with other foreign currency remeasurements.
−Removed: Xerox 2023 Annual Report 88
Note 3 – Revenue
11 unchanged sentences
Supplies, paper and other sales (2)
+Added: 1,000 1,065 1,176
Maintenance agreements (3)
14 unchanged sentences
(1) Geographic area data is based upon the location of the subsidiary reporting the revenue.
−Removed: (2) Includes revenues from maintenance agreements on sold equipment as well as revenues associated with service agreements sold through our channel partners.
−Removed: (3) Primarily includes revenues from our Print outsourcing arrangements including revenues from embedded operating leases in those arrangements, which were not significant.
+Added: (2) Other sales include revenues associated with hardware and software from our IT Solutions.
+Added: (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.
+Added: (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.
4 unchanged sentences
The majority of the balance at December 31, 2024 will be amortized to revenue over approximately the next 30 months.
+Added: Xerox 2024 Annual Report 99
+Added: Table of Contents Legal Sign-off 2.24.25
Contract Costs:
We incur the following contract costs as part of our revenue arrangements:
−Removed: • Incremental direct costs of obtaining a contract, which are primarily sales commissions paid to salespeople and agents in connection with the placement of equipment with associated post sale services arrangements.
+Added: • 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 .
−Removed: We pay commensurate sales commissions upon customer renewals;
−Removed: therefore, our amortization period is aligned to our initial contract term.
−Removed: • Contract fulfillment costs, which are costs incurred for resources and assets that will be used to satisfy our future performance obligations included in our service arrangements.
+Added: • 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.
−Removed: • Contract inducements, which are capitalized and amortized as a reduction of revenue over the term of the contract.
−Removed: Xerox 2023 Annual Report 89
+Added: • 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:
3 unchanged sentences
Amortization of customer contract costs ( 64 ) ( 69 ) ( 73 )
+Added: ( 3 ) — ( 4 )
Balance at December 31st, $ 138 $ 136 $ 135
3 unchanged sentences
Note 4 – Segment and Geographic Area Reporting
−Removed: Our reportable segments – Print and Other , and FITTLE – are aligned to how the Chief Operating Decision Maker (CODM), our Chief Executive Officer (CEO), 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.
−Removed: Segment Reporting Change
−Removed: During the second quarter 2023, as a result of the strategic shift in the Company’s approach to funding FITTLE’s new originations through funding agreements that involve the sale of lease receivables, the measures for FITTLE’s segment revenues and profits used by our CODM were recast as follows to correspond with this change in strategy:
−Removed: • The management and oversight of the equipment on operating leases portion of our financing business was transferred from the FITTLE segment to the marketing and sales groups in the Print and Other segment since the funding agreements currently exclude the sale of operating lease arrangements.
−Removed: • The allocation of shared expenses as well as commissions and other payments made by the FITTLE segment to the Print and Other segment were recast to better reflect the operations of FITTLE in line with the change in strategic direction.
−Removed: The following provides segment revenues and profit for 2022 and 2021, recast to conform to our new segment measurements:
−Removed: Segment Revenues Segment Profit
−Removed: 2022 2021 2022 2021
−Removed: Print and Other $ 6,667 $ 6,548 $ 238 $ 293
−Removed: FITTLE 610 695 37 82
−Removed: Intersegment revenue (1)
−Removed: ( 170 ) ( 205 ) — —
−Removed: Total External Revenue $ 7,107 $ 7,038 $ 275 $ 375
−Removed: Print and Other $ 137 $ 181 $ 20 $ 18
−Removed: FITTLE ( 217 ) ( 294 ) ( 20 ) ( 18 )
−Removed: Intersegment revenue (1)
−Removed: Total External Revenue $ — $ — $ — $ —
−Removed: Print and Other $ 6,804 $ 6,729 $ 258 $ 311
−Removed: FITTLE 393 401 17 64
−Removed: Intersegment revenue (1)
−Removed: ( 90 ) ( 92 ) — —
−Removed: Total External Revenue $ 7,107 $ 7,038 $ 275 $ 375
−Removed: _____________
−Removed: (1) Intersegment revenue is primarily commissions and other payments made by the FITTLE Segment to the Print and Other Segment for the lease of Xerox equipment placements.
−Removed: Xerox 2023 Annual Report 90
+Added: 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.
+Added: 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.
−Removed: This segment also includes IT services and software.
+Added: This segment also includes Digital and IT services and software.
Our product groupings range from:
4 unchanged sentences
Customers also include graphic communication enterprises as well as channel partners including distributors and resellers.
−Removed: Segment revenues also include commissions and other payments from the FITTLE segment for the exclusive right to provide lease financing for Xerox products.
+Added: 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.
−Removed: The FITTLE segment provides 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.
+Added: 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.
−Removed: 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.
−Removed: During the second quarter 2023, the finance receivables funding agreement with HPS was amended to expand the pools of finance receivables eligible for sale and to include the sale of the underlying leased equipment to HPS.
−Removed: Refer to Note 8 - Finance Receivables, Net for additional information on the sale of receivables.
+Added: Xerox 2024 Annual Report 100
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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.
+Added: (DLL) in Canada.
+Added: 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.
−Removed: In the fourth quarter 2023, our partnership with PEAC Solutions was further expanded to include the transition of some FITTLE U.S.
+Added: 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.
−Removed: Upon completion of this transition, PEAC Solutions will become the preferred financing partner, primary funder, and service provider for XBS leases in the U.S.
+Added: 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
2 unchanged sentences
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.
−Removed: Accordingly, the financial results for the segments may not be indicative of the results the businesses would have as on a standalone basis or what might be presented for the businesses in stand-alone financial statements.
−Removed: The CODM measures the performance of each segment based on several metrics, including segment revenues and profit.
−Removed: The CODM uses these results, in part, to evaluate the performance of, and to allocate resources to each segment.
−Removed: The FITTLE segment also includes interest expense associated with allocated debt of the Company in support of its Finance assets, while no interest expense is allocated to the Print and Other segment.
+Added: 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.
+Added: The CODM measures the performance of each segment based on several metrics, including segment revenues, significant segment expenses, and segment profit.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: The analysis of segment expenses has been applied retrospectively to all periods presented in the financial statements.
Xerox 2024 Annual Report 101
−Removed: Selected financial information for our reportable segments was as follows:
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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
−Removed: Print and Other FITTLE Total Print and Other FITTLE Total Print and Other FITTLE Total
+Added: 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
1 unchanged sentence
71 — 71 86 — 86 90 — 90
−Removed: Total Segment revenue $ 6,571 $ 401 $ 6,972 $ 6,804 $ 393 $ 7,197 $ 6,729 $ 401 $ 7,130
−Removed: Segment profit $ 360 $ 29 $ 389 $ 258 $ 17 $ 275 $ 311 $ 64 $ 375
−Removed: Segment margin (3)
+Added: Total Segment net revenue $ 5,935 $ 357 $ 6,292 $ 6,571 $ 401 $ 6,972 $ 6,804 $ 393 $ 7,197
+Added: Reconciliation to Segment Profit
+Added: Cost of sales (2)
$ 1,477 $ 77 $ 1,554 $ 1,686 $ 92 $ 1,778 $ 1,906 $ 96 $ 2,002
+Added: Cost of services, maintenance and rentals 2,536 14 2,550 2,647 17 2,664 2,662 17 2,679
+Added: Cost of financing (3)
+Added: — 106 106 — 130 130 — 108 108
+Added: Research, development and engineering expenses 191 — 191 229 — 229 304 — 304
+Added: Selling, administrative and general expenses (4)(5)
+Added: 1,392 126 1,518 1,563 133 1,696 1,584 155 1,739
+Added: Intersegment expense (6)
+Added: 71 — 71 86 — 86 90 — 90
+Added: Segment profit $ 268 $ 34 $ 302 $ 360 $ 29 $ 389 $ 258 $ 17 $ 275
Interest income $ — $ 151 $ 151 $ — $ 191 $ 191 $ — $ 207 $ 207
−Removed: Interest expense — 130 130 — 108 108 — 111 111
Depreciation and amortization 201 — 201 208 — 208 228 — 228
3 unchanged sentences
_____________
−Removed: (1) Amounts for 2022 and 2021 have been recast to conform to the current year's reporting presentation.
−Removed: See the Segment Reporting Change section above.
−Removed: (2) Intersegment revenue is primarily commissions and other payments made by the FITTLE Segment to the Print and Other Segment for the lease of Xerox equipment placements.
−Removed: (3) Segment margin based on External revenue only.
+Added: (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.
+Added: (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.
+Added: (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.
+Added: (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.
+Added: (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.
+Added: (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.
+Added: Xerox 2024 Annual Report 102
+Added: Table of Contents Legal Sign-off 2.24.25
Selected financial information for our reportable segments was as follows:
8 unchanged sentences
Accelerated share vesting — — ( 21 )
+Added: Inventory-related impact - exit of certain production print manufacturing operations ( 51 ) — —
+Added: Divestitures ( 47 ) — —
+Added: Reinvention costs ( 12 ) — —
+Added: Transaction and related costs, net ( 7 ) — —
Other expenses, net ( 158 ) ( 75 ) ( 60 )
12 unchanged sentences
Total Interest income $ 165 $ 207 $ 218
−Removed: Xerox 2023 Annual Report 92
Geographic Area Data
10 unchanged sentences
(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.
+Added: Xerox 2024 Annual Report 103
+Added: Table of Contents Legal Sign-off 2.24.25
Note 5 – Lessor
2 unchanged sentences
The components of lease income are as follows:
−Removed: Location in Statements of Income (Loss)
+Added: Location in Statements of (Loss) Income
Year Ended December 31,
6 unchanged sentences
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.
−Removed: Xerox 2023 Annual Report 93
Note 6 – Acquisitions and Divestitures
The following table summarizes the purchase price allocations for our acquisitions as of the acquisition dates:
−Removed: Year Ended December 31, 2022 Year Ended December 31, 2021
+Added: Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022
+Added: Weighted-Average Life Acquisitions (1)
Weighted-Average Life Acquisitions Weighted-Average Life Acquisitions
2 unchanged sentences
Customer relationships 10 years 134 — 10 years 41
−Removed: Trademarks 5 years 7 5 years 3
−Removed: Technology — 3 years 1
+Added: Trademarks 1 year 2 — 5 years 7
Other assets 15 — 30
2 unchanged sentences
( 124 ) — ( 76 )
−Removed: Total Cash Purchase Price $ 93 $ 53
+Added: Acquisition-related debt (4)
$ 161 $ — $ 93
−Removed: (1) Goodwill from 2022 acquisitions included approximately $ 20 of goodwill that is expected to be deductible for tax purposes.
+Added: _____________
+Added: (1) For details related to our 2024 acquisition activity, refer to the "2024 Acquisition" section below.
+Added: (2) Goodwill from 2024 and 2022 acquisitions included approximately $ 42 and $ 20 of goodwill that is expected to be deductible for tax purposes.
+Added: 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 .
+Added: (4) Reflects the secured promissory notes, net of unamortized discounts, issued in connection with the acquisition of ITsavvy Acquisition Company, Inc.
+Added: (5) Total is net of cash acquired .
+Added: 2024 Acquisition
+Added: On November 20, 2024, we completed the acquisition of ITsavvy Acquisition Company, Inc.
+Added: (ITsavvy), a technology infrastructure solutions provider for total consideration of $ 405 , which resulted in 100 % ownership of ITsavvy.
+Added: 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.
+Added: For additional information related to the secured promissory notes issued in connection with the acquisition of ITsavvy, refer to Note 15 - Debt.
+Added: Xerox 2024 Annual Report 104
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: Total Purchase Consideration
+Added: The table below details the total fair value of consideration for the ITsavvy acquisition:
+Added: November 20, 2024
+Added: Secured promissory notes due in 2025, net of $ 3 discount
+Added: Secured promissory notes due in 2026, net of $ 7 discount
+Added: Total Fair value of consideration transferred $ 405
+Added: Assets Acquired and Liabilities Assumed
+Added: 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.
+Added: No change-in-control or contingent consideration liabilities were recorded by Xerox.
+Added: 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:
+Added: November 20, 2024
+Added: Assets acquired
+Added: Cash and cash equivalents $ 34
+Added: Accounts receivable, net 58
+Added: Inventories 4
+Added: Other current assets 3
+Added: Land, buildings and equipment, net 5
+Added: Intangible assets, net 136
+Added: Other long-term assets 3
+Added: Total Assets acquired $ 529
+Added: Liabilities assumed
+Added: Accounts payable $ 57
+Added: Accrued compensation and benefits costs 7
+Added: Accrued expenses and other liabilities (1)
+Added: Deferred tax liability 18
+Added: Other long-term liabilities (1)
+Added: Total Liabilities acquired $ 124
+Added: Net Assets acquired $ 405
+Added: _____________
+Added: (1) Includes Deferred revenue accounted for in accordance with ASC 606 Revenue .
+Added: The purchase price allocation for ITsavvy is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available.
+Added: Xerox has one year from the acquisition date to finalize the purchase price allocation which may result in measurement period adjustments.
+Added: 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.
+Added: Intangible Assets
+Added: The following table is a summary of the fair value estimates of the identifiable intangible assets and their estimated average useful lives:
+Added: November 20, 2024 Estimated Useful Life
+Added: Customer relationships $ 134 10 years
+Added: Trademarks 2 1 year
+Added: Total consideration transferred $ 136
+Added: The majority of customer-related intangible assets relates to customer contracts and related relationships.
+Added: 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.
+Added: The asset was valued using a multi-
+Added: Xerox 2024 Annual Report 105
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: period excess earnings method which calculates the present value of the estimated revenues and net cash flows derived from it.
+Added: The present value of projected future cash flows included judgment and assumptions regarding projected future revenues, projected expenses, attrition rates, and the discount rate.
+Added: Trademark represents the preliminary estimated fair value of the ITsavvy trade name.
+Added: The fair value was determined by applying the relief-from-royalty method under the income approach.
+Added: This method is based on the application of a royalty rate to forecasted revenue under the trade name.
+Added: Intangible assets of approximately $ 59 is deductible for tax purposes as a result of previous taxable acquisitions made by ITsavvy.
+Added: 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.
+Added: Goodwill of approximately $ 42 is deductible for tax purposes as a result of previous taxable acquisitions made by ITsavvy.
+Added: All of the goodwill associated with the ITsavvy acquisition is related to our Print and Other Segment.
+Added: Deferred Taxes
+Added: 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.
+Added: Pro Forma Information (Unaudited)
+Added: 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.
+Added: 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.
+Added: 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.
+Added: The following table summarizes the pro forma financial information:
+Added: Year Ended December 31,
+Added: Total revenue $ 6,630 $ 7,296
+Added: Net loss ( 1,332 ) ( 8 )
+Added: 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.
+Added: 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
5 unchanged sentences
Approximately $ 11 was accrued as part of the purchase price reflecting the estimated fair value payout for this element.
−Removed: During 2023 $ 6 of contingent consideration was paid.
+Added: 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.
2 unchanged sentences
The Goodwill associated with both acquisitions is included in our Print and Other segment.
−Removed: 2021 Acquisitions
−Removed: In 2021, Xerox continued its strategy of focusing on further penetrating the small-to-medium sized business (SMB) market through acquisitions of local area resellers and partners, including multi-brand dealers as well as companies with an adjacent or sole IT services business.
−Removed: During 2021, we acquired businesses associated with this initiative that totaled $ 50 , net of cash acquired, which included an office equipment dealer in Canada for approximately $ 31 , as well as two acquisitions in the U.S.
−Removed: for approximately $ 19 .
−Removed: 2021 also included smaller acquisitions totaling approximately $ 3 .
−Removed: The Goodwill associated with these acquisitions is included in our Print and Other segment.
−Removed: Our acquisitions in 2022 and 2021 resulted in 100 % ownership of the acquired companies.
+Added: Xerox 2024 Annual Report 106
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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.
−Removed: Xerox 2023 Annual Report 94
Revenue Impact
4 unchanged sentences
2022 196 215 163
−Removed: 2021 42 37 19
Total Contributed Aggregate Revenue $ 244 $ 215 $ 163
−Removed: ServiceNow Inc.
−Removed: Investment in CareAR
−Removed: In August 2021, in connection with Xerox Holdings Corporation's formation of the CareAR software business, ServiceNow, Inc.
−Removed: acquired a noncontrolling interest in CareAR Holdings LLC for $ 10 .
−Removed: CareAR Holdings LLC is a direct operating subsidiary of Xerox Corporation and includes Xerox’s XMPie, Inc., DocuShare LLC and CareAR, Inc.
−Removed: business units.
−Removed: ServiceNow’s investment includes a fair value redemption right, which is contingent on the non-occurrence of a future liquidity event (e.g., sale, public offering, spin-off, etc.) within 6 years of the closing of the investment.
−Removed: As a result of this contingent redemption right, we classified ServiceNow’s noncontrolling interest in CareAR Holdings LLC as temporary equity within Xerox’s Consolidated Balance Sheet.
+Added: Pending Acquisition of Lexmark International II, LLC
+Added: Equity Purchase Agreement
+Added: 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).
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Xerox Corporation has obtained representation and warranty insurance, which provides coverage for certain breaches of representations and warranties, subject to certain terms and conditions.
+Added: 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).
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Xerox Corporation expects to close the transaction in the second half of 2025.
+Added: 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).
+Added: 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).
+Added: Xerox 2024 Annual Report 107
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Voting Agreement
+Added: 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.
+Added: The shareholders party to the Voting Agreement collectively beneficially own approximately 32.12 % of the outstanding Ninestar shares.
+Added: Committed Debt Financing
+Added: 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.
+Added: (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).
+Added: 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.
+Added: 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.
+Added: As of December 31, 2024, Xerox accrued in Other current liabilities approximately $ 22 in commitment fees, for the commitments discussed above.
+Added: The fees will become payable upon the closing of the financing transaction.
+Added: Xerox 2024 Annual Report 108
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: Sales of Argentina and Chile
+Added: 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 .
+Added: 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.
+Added: This transaction aligns with the Company's ongoing Reinvention.
+Added: 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 .
+Added: During the second quarter of 2024 we recorded a purchase price adjustment credit of $ 3 .
+Added: 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.
+Added: 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.
+Added: 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 .
+Added: Other Divestitures
+Added: During the fourth quarter 2024 we sold the rights to sell paper in certain European countries.
+Added: The sale resulted in a net disposal gain of $ 4 .
+Added: 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)
9 unchanged sentences
Xerox 2024 Annual Report 109
+Added: Table of Contents Legal Sign-off 2.24.25
Note 7 – Accounts Receivable, Net
19 unchanged sentences
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.
−Removed: Of the accounts receivable sold and derecognized from our balance sheet, $ 99 and $ 159 remained uncollected as of December 31, 2023 and 2022, respectively.
Accounts receivable sales activity was as follows:
6 unchanged sentences
Xerox 2024 Annual Report 110
+Added: Table of Contents Legal Sign-off 2.24.25
Note 8 – Finance Receivables, Net
21 unchanged sentences
Our finance receivable portfolios are primarily in the U.S., Canada and EMEA.
−Removed: We generally establish customer credit limits and estimate the allowance for credit losses on a country or geographic basis.
−Removed: Customer credit limits are based upon an initial evaluation of the customer's credit quality, and we adjust that limit accordingly based upon ongoing credit assessments of the customer, including payment history and changes in credit quality.
−Removed: The allowance for doubtful credit losses is principally 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.
+Added: We generally establish customer credit limits and estimate the allowance for doubtful credit losses on a country or geographic basis.
+Added: 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.
+Added: 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.
+Added: 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.
1 unchanged sentence
The net bad debt provision was $ 17 for the year ended December 31, 2024.
−Removed: This compares to the bad debt provision of $ 26 for the year ended December 31, 2022.
−Removed: The decrease in the bad debt provision was primarily due to a credit of $( 12 ) related to a reserve release in the U.S.
−Removed: as the result of a favorable reassessment of the credit exposure on a large customer receivable balance after a contract amendment, which improved our credit position.
−Removed: In addition, the bad debt provision benefited from the sales of finance lease receivables and a lower balance of finance receivables in 2023 as compared to 2022.
+Added: 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.
−Removed: Our assessment also includes a review of current portfolio credit metrics and the level of write-offs incurred over the past year.
+Added: 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.
1 unchanged sentence
Xerox 2024 Annual Report 111
+Added: Table of Contents Legal Sign-off 2.24.25
The allowance for credit losses as well as the related investment in finance receivables were as follows:
Allowance for Credit Losses:
−Removed: United States Canada EMEA (1)
+Added: United States Canada EMEA Total
Balance at December 31, 2022 $ 83 $ 7 $ 27 $ 117
1 unchanged sentence
Charge-offs, net ( 17 ) ( 3 ) ( 14 ) ( 34 )
−Removed: 1 1 ( 3 ) ( 1 )
Balance at December 31, 2023 $ 58 $ 7 $ 27 $ 92
1 unchanged sentence
Charge-offs, net ( 23 ) ( 11 ) ( 17 ) ( 51 )
+Added: 1 ( 1 ) ( 1 ) ( 1 )
Balance at December 31, 2024 $ 29 $ 5 $ 23 $ 57
5 unchanged sentences
_____________
−Removed: (1) Includes developing market countries.
(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.
−Removed: In the U.S., customers are further evaluated by class based on the type of lease origination.
+Added: 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.
17 unchanged sentences
Xerox 2024 Annual Report 112
+Added: Table of Contents Legal Sign-off 2.24.25
Details about our finance receivables portfolio based on geography, origination year and credit quality indicators are as follows:
31 unchanged sentences
Xerox 2024 Annual Report 113
+Added: Table of Contents Legal Sign-off 2.24.25
December 31, 2023
6 unchanged sentences
Total $ 260 $ 122 $ 135 $ 88 $ 32 $ 8 $ 645
+Added: Charge-offs $ 1 $ 1 $ 1 $ 1 $ 1 $ 2 $ 7
United States (Indirect):
3 unchanged sentences
Total $ 259 $ 154 $ 95 $ 39 $ 13 $ — $ 560
+Added: Charge-offs $ 4 $ 3 $ 3 $ 2 $ 2 $ 3 $ 17
Low Credit Risk $ 45 $ 24 $ 16 $ 9 $ 4 $ — $ 98
2 unchanged sentences
Total $ 114 $ 65 $ 38 $ 26 $ 11 $ 1 $ 255
+Added: Charge-offs $ — $ — $ — $ 2 $ — $ 1 $ 3
Low Credit Risk $ 251 $ 182 $ 110 $ 48 $ 19 $ 6 $ 616
2 unchanged sentences
Total $ 462 $ 346 $ 194 $ 91 $ 40 $ 9 $ 1,142
+Added: Charge-offs $ 3 $ 8 $ 4 $ 2 $ — $ — $ 17
Total Finance Receivables
3 unchanged sentences
Total $ 1,095 $ 687 $ 462 $ 244 $ 96 $ 18 $ 2,602
−Removed: _____________
−Removed: (1) Includes developing market countries.
+Added: Total Charge-offs $ 8 $ 12 $ 8 $ 7 $ 3 $ 6 $ 44
+Added: Xerox 2024 Annual Report 114
+Added: Table of Contents Legal Sign-off 2.24.25
The aging of our receivables portfolio is based upon the number of days an invoice is past due.
16 unchanged sentences
Total $ 35 $ 8 $ 7 $ 50 $ 1,752 $ 1,802 $ 55
−Removed: Xerox 2023 Annual Report 100
December 31, 2023
9 unchanged sentences
Total $ 53 $ 12 $ 10 $ 75 $ 2,527 $ 2,602 $ 61
−Removed: _____________
−Removed: (1) Includes developing market countries.
Sales of Receivables
−Removed: 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 and we have received an opinion to that effect from outside legal counsel.
+Added: 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.
+Added: 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.
−Removed: During the second quarter 2023, the finance receivables funding agreement with HPS was amended to expand the pools of finance receivables eligible for sale and to include the sale of the underlying leased equipment to HPS.
−Removed: The commission paid by HPS was also accordingly amended to cover the value associated with the underlying equipment being sold to HPS.
−Removed: The company retained 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.
−Removed: The amended finance receivables funding agreement automatically renews each year for a one-year period, unless terminated by either the Company or HPS.
−Removed: Additionally, the Company will continue to service the lease receivables for a specified fee and will also be paid a commission on lease receivables sold under the finance receivables funding agreement.
−Removed: Of the finance receivables sold and derecognized from our balance sheet, $ 994 and $ 60 remained uncollected as of December 31, 2023 and 2022, respectively.
+Added: 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.
+Added: 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.
+Added: 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 .
+Added: This agreement automatically renews for a one-year period unless terminated by either the Company or HPS.
+Added: Xerox will be required to pay a specified fee to service the Company’s retained receivables.
+Added: Xerox will continue to service the lease receivables from prior service arrangements with HPS for a specified fee.
+Added: In October 2024, the Company entered into a finance receivables funding agreement with De Lage Landen Financial Services Canada Inc.
+Added: (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.
+Added: 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.
+Added: 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.
+Added: If the portfolio performs above a certain level of incremental service, a fee can be earned annually.
+Added: Xerox 2024 Annual Report 115
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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,
+Added: 2024 2023 2022
Finance receivable sales - net proceeds (1)
+Added: $ 752 $ 1,102 $ 60
Gain on sale/Commissions (2)(3)
4 unchanged sentences
Amounts include revenues associated with the sale of the underlying leased equipment.
−Removed: (3) The year ended December 31, 2023 includes $ 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.
+Added: (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
−Removed: In 2022 and 2021 we sold certain finance receivables to consolidated special purpose entities included in our Consolidated Balance Sheet as collateral for secured loans.
+Added: 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.
−Removed: Xerox 2023 Annual Report 101
Note 9 – Inventories and Equipment on Operating Leases, Net
4 unchanged sentences
Total Inventories $ 695 $ 661
+Added: _____________
+Added: (1) Finished goods at December 31, 2024 includes a reduction of approximately $ 7 , related to the exit of certain production print manufacturing operations.
+Added: (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.
−Removed: Equipment on operating lease and similar arrangements consists of our equipment rented to customers and depreciated to estimated salvage value at the end of the lease term.
+Added: 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:
2 unchanged sentences
Equipment on operating leases, net $ 245 $ 265
+Added: Xerox 2024 Annual Report 116
+Added: Table of Contents Legal Sign-off 2.24.25
Depreciable lives generally vary from four to five years consistent with our planned and historical usage of the equipment subject to operating leases.
9 unchanged sentences
Secured Borrowings and Collateral
−Removed: In 2021, 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.
+Added: 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.
−Removed: Xerox 2023 Annual Report 102
Note 10 - Land, Buildings, Equipment and Software, Net
14 unchanged sentences
(1) Depreciation expense was $ 57 , $ 60 and $ 68 for the three years ended December 31, 2024, 2023 and 2022, respectively.
−Removed: We lease buildings and equipment, substantially all of which are accounted for as operating leases.
+Added: 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.
2 unchanged sentences
Useful lives of our internal use software generally vary from three to seven years .
+Added: Xerox 2024 Annual Report 117
+Added: Table of Contents Legal Sign-off 2.24.25
Note 11 – Lessee
2 unchanged sentences
Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations.
−Removed: Our leases have remaining terms of up to eleven years and a variety of renewal and/or termination options.
+Added: 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:
8 unchanged sentences
(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.
−Removed: As of December 31, 2023, we had approximately $ 6 additional operating leases that had not yet commenced.
+Added: 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:
3 unchanged sentences
Total Operating lease liabilities $ 188 $ 182
−Removed: Xerox 2023 Annual Report 103
Supplemental information related to operating leases is as follows:
11 unchanged sentences
12 months $ 69
−Removed: Thereafter 21
Total Lease payments 217
1 unchanged sentence
Total Operating lease liabilities $ 188
+Added: Xerox 2024 Annual Report 118
+Added: Table of Contents Legal Sign-off 2.24.25
Finance Leases
Xerox has finance leases for equipment in the U.S.
−Removed: and Europe and related infrastructure, within outsourced warehouse supply arrangements, in the U.S.
−Removed: These leases have remaining maturities up to four years with a maximum expiration date through August 2027.
−Removed: As of December 31, 2023 and 2022, the remaining lease obligation for all finance leases is $ 17 and $ 16 , respectively, based on discount rates of 7.28 % and 6.40 %, respectively.
−Removed: The ROU asset balances associated with these finance leases at December 31, 2023 and 2022 of $ 19 and $ 18 , respectively are included in Land, buildings and equipment, net in the Consolidated Balance Sheets.
+Added: and Europe, as well as for vehicles and related infrastructure, within outsourced warehouse supply arrangements, in the U.S.
+Added: These leases have remaining maturities up to five years .
+Added: 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.
+Added: As of December 31, 2024, we had no additional financing leases that had not yet commenced.
+Added: Finance lease ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as follows:
+Added: Land, buildings and equipment, net $ 55 $ 19
+Added: Accrued expenses and other current liabilities $ 15 $ 8
+Added: Other long-term liabilities 38 9
+Added: Total Finance lease liabilities $ 53 $ 17
+Added: Supplemental information related to finance leases is as follows:
+Added: Year Ended December 31,
+Added: 2024 2023 2022
+Added: Cash paid for amounts included in the measurement of lease liabilities $ 12 $ 8 $ 4
+Added: Right-of-use assets obtained in exchange for new lease liabilities (1)
+Added: $ 42 $ 7 $ 12
+Added: Weighted-average remaining lease term 4 Years 2 Years 3 years
+Added: Weighted-average discount rate 10.53 % 7.28 % 6.40 %
+Added: _____________
+Added: (1) Includes the impact of new leases as well as remeasurements and modifications to existing leases.
+Added: Maturities and additional information related to finance lease liabilities are as follows:
+Added: 12 months $ 19 $ 9
+Added: 24 months 15 6
+Added: 36 months 12 3
+Added: 48 months 11 1
+Added: 60 months 8 —
+Added: Thereafter — —
+Added: Total Lease payments 65 19
+Added: Imputed interest 12 2
+Added: Total Finance Lease Liabilities $ 53 $ 17
+Added: Xerox 2024 Annual Report 119
+Added: Table of Contents Legal Sign-off 2.24.25
Note 12 - Goodwill, Net and Intangible Assets, Net
6 unchanged sentences
Goodwill Activity:
−Removed: Foreign currency translation 47 ( 120 ) ( 23 )
−Removed: Acquisitions (1) :
+Added: Foreign currency translation - Gross ( 29 ) 47 ( 120 )
Acquisitions (1) :
+Added: Acquisition 286 — —
Acquisitions — 5 28
Canada Acquisition — — 34
−Removed: Other — 3 ( 5 )
Dispositions (2)
+Added: ( 16 ) ( 125 ) —
Goodwill impairment ( 1,058 ) — ( 412 )
+Added: Foreign currency translation - Impairment 6 — —
Goodwill $ 4,182 $ 3,940 $ 4,013
2 unchanged sentences
_____________
+Added: (1) 2024 primarily relates to our acquisition of ITsavvy.
Refer to Note 6 - Acquisitions and Divestitures for additional information related to acquisitions.
−Removed: (2) Primarily includes the write-off of $ 115 of goodwill associated with the donation of our Palo Alto Research Center (PARC) as well as other immaterial dispositions.
−Removed: Refer to Note 6 - Acquisitions and Divestitures for additional information related to the PARC donation.
−Removed: Xerox 2023 Annual Report 104
−Removed: Total Goodwill is fully allocated to the Print and Other segment and no Goodwill has been allocated to the FITTLE segment for the three years ended December 31, 2023, 2022 or 2021, respectively.
−Removed: We performed our annual Goodwill assessment in the fourth quarter of 2023 qualitatively and concluded that it is more likely-than-not that the fair value of the Print and Other reporting unit, the only reporting unit with Goodwill, is higher than its carrying amount and Goodwill was not impaired.
+Added: (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.
+Added: 2023 primarily includes the write-off of $ 115 of Goodwill associated with the donation of our Palo Alto Research Center (PARC).
+Added: 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.
+Added: 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.
+Added: In the third quarter of 2024, we concluded that a quantitative test of Goodwill was required.
+Added: 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.
−Removed: In the fourth quarter of 2021, after completing our annual impairment test, we concluded that the estimated fair value of the Company had declined below its carrying value.
−Removed: As a result, we recognized an after-tax non-cash impairment charge of $ 750 ($ 781 pre-tax) related to our Goodwill for the year ended December 31, 2021.
+Added: 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
13 unchanged sentences
Total Intangible Assets $ 497 $ 261 $ 236 $ 545 $ 368 $ 177
−Removed: Excluding the impact of future acquisitions, amortization expense is expected to approximate $ 39 in 2024 and $ 32 in 2025, 2026, 2027 and in 2028, respectively.
−Removed: Distribution network, technology and non-compete assets are expected to be fully amortized by 2025.
+Added: Excluding the impact of future acquisitions, amortization expense is expected to approximate $ 36 in 2025, 2026, 2027, and 2028, respectively, and $ 33 in 2029.
+Added: Trademark assets are expected to be fully amortized by 2029.
+Added: Xerox 2024 Annual Report 120
+Added: Table of Contents Legal Sign-off 2.24.25
Note 13 – Restructuring Programs
−Removed: We engage in restructuring actions and other transformation efforts in order to reduce our cost structure and realign it to the changing nature of our business.
−Removed: As part of our efforts to reduce costs, our restructuring actions may also include the offshoring and/or outsourcing of certain operations, services and other functions, as well as reducing our real estate footprint.
+Added: 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.
+Added: 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:
6 unchanged sentences
Restructuring charges, net primarily includes employee severance costs and other contractual termination costs that may result from restructuring actions and initiatives.
−Removed: 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 applied for most of our Restructuring actions.
+Added: 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.
1 unchanged sentence
Contractual termination costs, including facility exit costs, are generally recognized when it has been determined that a liability has been incurred.
−Removed: 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 within countries and is net of any gains we may realize on the disposal
−Removed: Xerox 2023 Annual Report 105
−Removed: of those assets.
+Added: 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.
3 unchanged sentences
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.
+Added: Xerox 2024 Annual Report 121
+Added: Table of Contents Legal Sign-off 2.24.25
Restructuring Charges, Net
−Removed: Restructuring charges, net primarily relate to the Print and Other segment as amounts related to the FITTLE segment were immaterial for all periods presented.
+Added: 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:
18 unchanged sentences
_____________
−Removed: (1) Represents net amount recognized within the Consolidated Statements of Income (Loss) for the years shown for restructuring.
+Added: (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.
9 unchanged sentences
Impairments are net of any potential sublease income or other recovery amounts.
+Added: 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.
−Removed: 2023 also includes impairments associated with strategic actions taken as a result of the Company's Project Reinvention, including the outsourcing of certain back-office functions and geographic simplification.
−Removed: Xerox 2023 Annual Report 106
+Added: 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,
4 unchanged sentences
Gain on sales of owned assets (2)
−Removed: — ( 22 ) ( 4 )
Adjustments/Reversals ( 2 ) ( 4 ) ( 1 )
3 unchanged sentences
(2) Reflect gain on the sales of exited surplus facilities and land.
−Removed: Related Costs
+Added: Xerox 2024 Annual Report 122
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: Related Cost, Net
In connection with our restructuring programs, we also incurred certain related costs as follows:
12 unchanged sentences
Xerox 2024 Annual Report 123
+Added: Table of Contents Legal Sign-off 2.24.25
Note 14 - Supplementary Financial Information
45 unchanged sentences
Xerox 2024 Annual Report 124
+Added: Table of Contents Legal Sign-off 2.24.25
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.
−Removed: 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 continuing the litigation.
+Added: 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.
8 unchanged sentences
__________________________
−Removed: (1) Includes collections on finance receivables pledged for secured borrowings or sold that will be remitted in the following month.
+Added: (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:
27 unchanged sentences
(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.
−Removed: (2) Amortization of patents is reported in Decrease in other current and long-term assets on the Consolidated Statements of Cash Flows.
−Removed: (3) Amortization of customer contract costs is reported in Decrease in other current and long-term assets on the Consolidated Statements of Cash Flows.
+Added: (2) Amortization of patents is reported in (Increase) decrease in other current and long-term assets on the Consolidated Statements of Cash Flows.
+Added: (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
+Added: Table of Contents Legal Sign-off 2.24.25
Supplier Finance Programs
−Removed: The Company has a program through a financial institution that enables vendors and suppliers, at their option, to receive early payment for their invoices.
−Removed: The program operates in a similar manner to a purchasing card program, however with this program the Company directly receives invoices associated with those vendors and suppliers participating in the program.
−Removed: The Company confirms and validates those invoices and the amounts due before submitting the invoices to the financial institution for early payment at a discounted amount.
−Removed: The financial institution subsequently invoices the Company 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.
−Removed: The overall impact of the program generally results in the Company paying its supplier and vendor invoices consistent with their original terms.
−Removed: This program is generally available to all non-inventory vendors and suppliers.
−Removed: Spending associated with this program during 2023 was approximately $ 125 .
+Added: 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.
−Removed: The amounts due to vendors and suppliers participating in this program and included in Accounts payable were approximately $ 40 at both December 31, 2023 and 2022, respectively.
+Added: 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.
+Added: 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.
+Added: The overall impact of the program generally results in paying our supplier and vendor invoices consistent with their original terms.
+Added: This program is generally available to all non-inventory vendors and suppliers.
+Added: Activity related to the Company's supplier finance program is as follows:
+Added: Balance at January 1st, 40 40
+Added: Amounts invoiced 110 125
+Added: Invoices paid ( 120 ) ( 125 )
+Added: Balance at December 31st, $ 30 $ 40
Note 15 – Debt
9 unchanged sentences
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.
−Removed: These costs are amortized as interest expense in our Consolidated Statements of Income (Loss).
+Added: These costs are amortized as interest expense in our Consolidated Statements of (Loss) Income.
Xerox 2024 Annual Report 126
+Added: Table of Contents Legal Sign-off 2.24.25
Long-term debt was as follows:
3 unchanged sentences
Senior Notes due 2028 5.50 % 5.40 % 750 750
+Added: Senior Notes due 2029 8.88 % 8.88 % 500 —
+Added: Convertible Senior Notes due 2030 3.75 % 3.75 % 400 —
Subtotal - Xerox Holdings Corporation $ 2,038 $ 1,500
1 unchanged sentence
Senior Notes due 2024 3.80 % 3.84 % $ — $ 300
−Removed: 4.38 % 4.63 % $ — $ 300
−Removed: Senior Notes due 2024 3.80 % 3.84 % 300 300
Term Loan B due 2029 (2)
9.34 % 8.34 % 523 550
+Added: Secured Promissory Note due 2025 (2)
+Added: — % 5.53 % 110 —
+Added: Secured Promissory Note due 2026 (2)
+Added: — % 5.53 % 110 —
Senior Notes due 2035 4.80 % 4.84 % 250 250
14 unchanged sentences
_____________
−Removed: (1) Represents the weighted average effective interest rate, which includes the effect of discounts and premiums on issued debt.
−Removed: (2) As a result of the downgrade of our debt ratings in February 2022, the coupon rate of 4.375 % increased by 0.25 % to 4.625 % effective March 15, 2022.
+Added: (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.
10 unchanged sentences
(2) Represents subsidiaries of Xerox Corporation.
+Added: Secured Promissory Notes
+Added: In connection with Xerox's acquisition of ITsavvy Acquisition Company, Inc.
+Added: (ITsavvy), Xerox issued two , non-interest bearing, secured promissory notes (the 2025 Note and the 2026 Note, or the Notes).
+Added: Each of the Notes has a principal amount of $ 110 .
+Added: The 2025 Note has a maturity date of October 8, 2025, and the 2026 Note has a maturity date of January 30, 2026.
+Added: 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.
+Added: To the extent not previously paid, each of the Notes shall be paid in full in cash on their respective maturity date.
+Added: We recorded the non-interest-bearing promissory notes at their present value in our Consolidated Financial Statements.
+Added: The total amount recorded was $ 210 , and was net of unamortized debt discount of $ 10 .
+Added: 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.
+Added: 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
+Added: Xerox 2024 Annual Report 127
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: events of default.
+Added: Each of the Notes are subordinated in lien priority to certain outstanding indebtedness of Xerox.
+Added: 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.
+Added: and Canadian subsidiaries of Xerox.
+Added: Holdings and certain U.S.
+Added: and Canadian subsidiaries of Xerox are guarantors under each of the Notes.
+Added: For additional information related to our acquisition of ITsavvy , refer to Note 6 - Acquisitions and Divestitures.
+Added: 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 .
+Added: 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.
+Added: 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.
+Added: Interest is payable semi-annually in arrears on May 30th and November 30th of each year, beginning on November 30, 2024.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Refer to the Use of Aggregate Proceeds from Senior Notes section below for additional information regarding the use of net proceeds.
+Added: Convertible Senior Notes and Capped Call
+Added: Convertible Senior Notes
+Added: In March 2024, Xerox Holdings Corporation issued an aggregate $ 400 of 3.75 % Convertible Senior Notes due in 2030 (the 2030 Notes).
+Added: 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.
+Added: The 2030 Notes were issued in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
+Added: 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.
+Added: The net proceeds from this offering were approximately $ 390 , after deducting the debt issuance costs.
+Added: 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.
+Added: Refer to the Use of Aggregate Proceeds from Senior Notes section below for additional information regarding the use of net proceeds.
+Added: 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:
+Added: (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;
+Added: (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;
+Added: (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;
+Added: (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
+Added: Xerox 2024 Annual Report 128
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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;
+Added: or (v) upon the occurrence of specified corporate events (as determined in accordance with the indenture governing the 2030 Notes).
+Added: 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.
+Added: As of December 31, 2024, none of the conditions permitting the holders of the 2030 Notes to convert their notes early had been met.
+Added: Therefore, the 2030 Notes are classified as long-term debt.
+Added: 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.
+Added: The conversion rate will be subject to adjustment under certain circumstances.
+Added: 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.
+Added: 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.
+Added: We may not redeem the 2030 Notes prior to September 20, 2027.
+Added: 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.
+Added: No sinking fund for the notes has been provided.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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 .
+Added: The Capped Calls cover, subject to anti-dilution adjustments, the number of shares of the Company's common stock initially underlying the 2030 Notes.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: The purchases of the Capped Calls resulted
+Added: Xerox 2024 Annual Report 129
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: in a tax benefit of approximately $ 6 , the impact of which was included in Additional paid-in capital.
+Added: Refer to Note 17 - Shareholders' Equity of Xerox Holdings for additional information regarding the Capped Calls.
+Added: Use of Aggregate Proceeds from Senior Notes
+Added: 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).
+Added: 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.
+Added: 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.
+Added: 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.
+Added: The net gain on the extinguishment of $ 3 was recorded in Other expenses, net.
Xerox Holdings Corporation/Xerox Corporation Intercompany Loan
−Removed: In February 2021, Xerox Holdings Corporation and Xerox Corporation entered into an Intercompany Loan agreement for the net proceeds of $ 1,494 contributed by Xerox Holdings Corporation to Xerox Corporation in 2020.
−Removed: The contribution was the result of the net debt proceeds Xerox Holdings Corporation received in connection with the issuance of the Senior Notes.
−Removed: The intercompany loan was established to mirror the terms of Xerox Holdings Corporation’s 2025 and 2028 Senior Notes, including interest rates and payment dates.
−Removed: The intercompany interest expense also includes a ratable amount to reimburse Xerox Holdings Corporation for its debt issuance costs and premium.
+Added: 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).
+Added: As a result, Xerox Corporation recorded approximately $ 900 of related party debt.
+Added: 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.
−Removed: Xerox 2023 Annual Report 111
Revolving Credit Facility
−Removed: In May 2023, Xerox Corporation, as borrower, its parent company, Xerox Holdings Corporation, 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 and collateral agent and several participating lending banks including Citibank N.A.
−Removed: The aggregate outstanding principal amount of the ABL is payable in full at maturity on May 22, 2028, and there are no scheduled principal payments prior to maturity.
−Removed: We deferred approximately $ 7 of debt issuance costs in connection with the ABL Facility, which will be amortized over the five-year term.
−Removed: Our previous $ 250 Revolving Credit Facility due July 2024 was terminated prior to entering into the ABL Facility and resulted in a debt extinguishment loss of approximately $ 1 related to the write-off of deferred debt issuance costs.
−Removed: Under the ABL Facility, Xerox Corporation may borrow up to the lesser of (x) $ 300 and (y) a borrowing base calculated based on working capital amounts (Accounts receivable and Inventories) of the loan parties thereunder as set forth in the ABL Facility.
+Added: 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.
+Added: 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.
+Added: We deferred approximately $ 7 of debt issuance costs in connection with the ABL Facility, which are being amortized over the five-year term.
+Added: 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.
+Added: In June 2024, Xerox Corporation and Xerox Holdings Corporation, entered into Amendment No.
+Added: 2 to Credit Agreement (the Amendment) with the ABL agent, and the lenders party thereto.
+Added: 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.
+Added: 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.
−Removed: Xerox Corporation's borrowings under the ABL Facility are supported by guarantees from Xerox Holdings Corporation and certain of Xerox Corporation's Canadian and English subsidiaries (and, within a specified period following the closing date of the TLB - see below - certain U.S., German and Belgian subsidiaries), and by security interests in substantially all of the working capital assets of Xerox Corporation, Xerox Holdings Corporation, and such Canadian and English subsidiaries (and, within a specified period following the closing date of the TLB (see below), substantially all 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).
−Removed: At Xerox Corporation’s election, the loans under the ABL Facility will bear interest at either:
+Added: 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.
+Added: Xerox 2024 Annual Report 130
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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);
(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).
−Removed: The applicable margin for ABR loans ranges from 0.5 % to 1.0 % depending on the Company’s average excess availability.
+Added: 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.
−Removed: At December 31, 2023, there were no borrowings under the ABL Facility, and no letters of credits were issued under the facility.
+Added: 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 .
−Removed: The 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) $ 22.5 and (B) 10 % of the Line Cap (the lesser of the aggregate amount of Revolving Commitments and the then-applicable Borrowing Base).
+Added: 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.
−Removed: The ABL Facility also contains negative covenants governing dividends, investments, indebtedness, and other matters customary for similar facilities.
−Removed: As of December 31, 2023, we were in full compliance with all covenants under the ABL Facility and no Event of Default (as such term is defined in the ABL Facility) had occurred.
−Removed: If an event of default occurs under the 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.
+Added: The amended ABL Facility also contains negative covenants governing dividends, investments, indebtedness, liens, and other matters customary for similar facilities.
+Added: 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
−Removed: In November 2023, Xerox Corporation, as borrower, and its parent company, Xerox Holdings Corporation, and certain of Xerox’s subsidiaries, as guarantors, entered into a first lien term loan Credit Agreement with Jefferies Finance LLC (Jefferies Finance), as Administrative Agent and Collateral Agent, and a syndicate of Lenders providing for a first lien senior secured term loan credit facility (the Term Loan B or “TLB”) to Xerox Corporation of $ 550 , which was fully extended as term loans to Xerox Corporation at closing.
−Removed: The term loans under this facility
−Removed: Xerox 2023 Annual Report 112
−Removed: included an aggregate Original Issue Discount (OID) of $ 17 and debt issuance costs of $ 9 resulting in net proceeds of approximately $ 524 .
+Added: 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.
+Added: 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.
−Removed: The proceeds of the term loans were used to repay in full the bridge Loan Facility of $ 555 extended to Xerox under a credit agreement, dated as of September 28, 2023, entered into with Jefferies Finance as Administrative Agent, Collateral Agent and Lender.
−Removed: The Loan Facility was a 5-year agreement with a final maturity date of September 28, 2028 and bore interest at an annual rate of 8.50 %.
−Removed: The proceeds from that bridge loan were used to finance the repurchase of an aggregate of approximately 34 million shares of the Company’s common stock from Carl C.
−Removed: Icahn and certain of his affiliates pursuant to the terms of a related purchase agreement as disclosed in Note 22 – Shareholders’ Equity.
−Removed: The repayment of the Loan Facility resulted in a debt extinguishment loss of $ 7 primarily related to the write-off of deferred debt issuance costs.
−Removed: Xerox’s obligations under the TLB are supported by, (i) on the closing date thereof, guarantees from the Company and certain of Xerox’s U.S., Canadian 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 (ii) within a specified period following such closing date, guarantees from certain of Xerox’s German and Belgium subsidiaries, and security interests in the finance lease receivables of such German and Belgium subsidiaries.
−Removed: Liens in favor of the Lenders under the TLB are subject to an intercreditor agreement entered into on the Closing Date with the Administrative Agent and Collateral Agent under Xerox’s existing ABL Facility, dated as of May 22, 2023.
−Removed: 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.
−Removed: Based on Xerox’s current elections, the $ 550 of term loans at December 31, 2023 currently bear interest at an average of 9.34 % through January 31, 2024, at which time the interest rate will reset based on Xerox’s elections.
+Added: 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.
+Added: Liens in favor of the lenders under the TLB are subject to an intercreditor agreement with the ABL Agent.
+Added: At Xerox’s election, the term loans will bear interest at a per annum rate of either:
+Added: (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
+Added: (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.
+Added: There are $ 523 of term loans outstanding at December 31, 2024.
+Added: 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.
−Removed: If the term loans are voluntarily prepaid in connection with a repricing transaction within six months of the closing date, a prepayment premium of 1 % will apply.
+Added: 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.
+Added: Xerox 2024 Annual Report 131
+Added: Table of Contents Legal Sign-off 2.24.25
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.
−Removed: The TLB also contains customary excess cash flow and asset sale mandatory prepayments, reporting covenants and negative covenants governing dividends, investments, indebtedness, and other matters that are customary for similar term loan B facilities.
+Added: 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
−Removed: Over the past three years, 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.
+Added: 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.
1 unchanged sentence
For certain loans, we entered into interest rate hedge agreements to either fix or cap the interest rate over the life of the loan.
−Removed: The sales of the receivables to the SPEs were structured as "true sales at law," and we have received opinions to that effect from outside legal counsel.
−Removed: However, the transactions were accounted for as secured borrowings as we fully consolidate the SPEs in our financial statements.
−Removed: As a result, the assets of the SPEs are not available to satisfy any of our other obligations.
−Removed: Conversely, the credit holders of these SPEs do not have legal recourse to the Company’s general credit.
−Removed: Xerox 2023 Annual Report 113
+Added: 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.
+Added: However, the transactions were accounted for as secured borrowings as we fully consolidated the SPEs in our financial statements.
+Added: As a result, the assets of the SPEs were not available to satisfy any of our other obligations.
+Added: 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.
4 unchanged sentences
Expected Maturity
−Removed: United States (4)
−Removed: January 2022 209 — 77 6.82 % 2024
−Removed: September 2021 89 2 25 6.76 % 2024
−Removed: $ 298 $ 2 $ 102
−Removed: Canada (4)(5)
−Removed: July 2023 $ 86 $ — $ 77 6.74 % 2026
November 2023 $ 58 $ — $ 70 4.62 % 2026
6 unchanged sentences
United States (4)(5)
−Removed: December 2022 (7)
−Removed: $ 370 $ — $ 247 7.43 % 2025
January 2022 $ 209 $ — $ 77 6.82 % 2024
1 unchanged sentence
$ 298 $ 2 $ 102
−Removed: April 2022 $ 63 $ — $ 57 5.45 % 2025
−Removed: December 2022 $ 235 $ — $ 195 3.03 % 2025
+Added: Canada (4)(6)
+Added: July 2023 $ 86 $ — $ 77 6.74 % 2026
+Added: November 2023 $ 235 $ — $ 182 5.42 % 2026
Total $ 619 $ 2 $ 361
4 unchanged sentences
(4) Secured assets and obligations held by SPEs.
−Removed: (5) In July 2023, the outstanding balance from the April 2022 loan, was refinanced into a new loan, resulting in additional net proceeds of approximately $ 52 .
−Removed: (6) In November 2023, the outstanding balance from the December 2022 loan, was refinanced into a new loan, resulting in additional net proceeds of approximately $ 107 .
−Removed: (7) In the second quarter of 2023, we repaid the remaining balance of $ 185 early, and incurred a $ 2 loss on extinguishment.
+Added: (5) In the second quarter of 2024, we repaid the remaining balance on these secured borrowings.
+Added: (6) Prior to entering the new finance receivable sales agreement with De Lage Landen Financial Services Canada Inc.
+Added: (DLL), in October 2024, the remaining balance of this secured debt was repaid.
+Added: Refer to Note 8 - Finance Receivables, Net for additional information related to our arrangement with DLL.
+Added: Xerox 2024 Annual Report 132
+Added: Table of Contents Legal Sign-off 2.24.25
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.
6 unchanged sentences
_____________
−Removed: (1) Includes Equipment financing interest as well as non-financing interest expense included in Other expenses, net in the Consolidated Statements of Income (Loss).
+Added: (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.
−Removed: (3) Includes Finance income, as well as other interest income that is included in Other expenses, net in the Consolidated Statements of Income (Loss).
−Removed: Xerox 2023 Annual Report 114
+Added: (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.
21 unchanged sentences
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.
−Removed: At December 31, 2023 there were four interest rate derivatives outstanding on our finance receivable secured borrowings that are designated as cash flow hedges as follows:
−Removed: Borrowing Derivative Type Principal Debt (1)
−Removed: Notional Amount
−Removed: Expected Maturity Pre-Hedged Rate Hedged Rate Net Fair Value
−Removed: (September 2021) Cap $ 25 $ 30 2024 6.76 % 0.50 % —
−Removed: Canada Swap 77 77 2026 6.74 % 5.19 % ( 1 )
+Added: During first quarter 2024, the following derivatives were dedesignated as cash flow hedges.
+Added: 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.
+Added: Xerox 2024 Annual Report 133
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: Secured Borrowing Derivative Type Notional Amount
France Cap 43
France Cap 34
+Added: 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).
+Added: The TLB had an outstanding principal balance of $ 523 as of December 31, 2024.
+Added: The following is a summary of our swaps at December 31, 2024:
+Added: Counterparty Derivative Type Principal Debt
+Added: Notional Amount
+Added: Expected Maturity Fixed Rate Paid
+Added: Floating Rate Received
+Added: Net Fair Value
+Added: Mizuho Swap 175 175 2027 3.271 % 4.604 % $ 3
+Added: Credit Agricole Swap 125 125 2027 3.276 % 4.604 % 2
Total $ 300 $ 300 $ 5
−Removed: _____________
−Removed: (1) Reflects principal debt and excludes debt issuance costs of $ 1 at December 31, 2023.
−Removed: No material amount of ineffectiveness was recorded in the Consolidated Statements of Income (Loss) for these designated cash flow hedges and all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
−Removed: In December 2023, an interest rate Cap associated with the December 2022 U.S.
−Removed: secured borrowing with a notional value of $ 173 was dedesignated as a cash flow hedge and the net fair value recorded in Accumulated Other Comprehensive Loss was reclassified to earnings.
−Removed: Xerox 2023 Annual Report 115
+Added: The remaining portion of the TLB of $ 223 is not hedged, and is subject to interest rate fluctuations.
+Added: 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
5 unchanged sentences
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.
−Removed: During second quarter 2023, as a result of a change in the currency terms included in a significant supplier inventory contract, forecasted purchases of inventory in YEN were no longer expected.
−Removed: This change resulted in decrease in our YEN/USD and YEN/EUR hedging positions in 2023.
There have not been any other material changes in our hedging strategy during 2024.
3 unchanged sentences
Value Fair Value
+Added: Asset (Liability) (1)
Gross Notional
Value Fair Value
+Added: Asset (Liability) (1)
Pound Sterling $ 337 $ 1 $ 385 $ 3
6 unchanged sentences
Dollar/Canadian Dollar 194 — — —
−Removed: Swedish Krona/Euro — — 49 —
+Added: Swiss Franc/Euro 19 — — —
Euro/Swedish Krona — — — —
5 unchanged sentences
_____________
−Removed: (1) Represents the net receivable (payable) amount included in the Consolidated Balance Sheet at December 31, 2023.
+Added: (1) Represents the net receivable (payable) amount included in the Consolidated Balance Sheet at December 31, 2024 and 2023.
+Added: Xerox 2024 Annual Report 134
+Added: Table of Contents Legal Sign-off 2.24.25
Foreign Currency Cash Flow Hedges
1 unchanged sentence
All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
−Removed: The amount of ineffectiveness recorded in the Consolidated Statements of Income (Loss) for these designated cash flow hedges was not material for the three years ended December 31, 2023.
+Added: 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.
−Removed: Xerox 2023 Annual Report 116
Summary of Derivative Instruments Gains (Losses)
13 unchanged sentences
Total $ — $ ( 18 ) $ ( 35 ) $ ( 10 ) $ ( 18 ) $ ( 35 )
−Removed: For the three years ended December 31, 2023, 2022 and 2021 no amount of ineffectiveness was recorded in the Consolidated Statements of Income (Loss) for these designated cash flow hedges.
+Added: 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.
−Removed: At December 31, 2023, a net after-tax loss of $ 3 was recorded in Accumulated other comprehensive loss associated with our cash flow hedging activity.
+Added: 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.
2 unchanged sentences
They are not designated as hedges since there is a natural offset for the remeasurement of the underlying foreign currency-denominated asset or liability.
−Removed: The net asset fair value of these contracts was $ 5 and $ 12 as of December 31, 2023 and 2022, respectively.
+Added: 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,
−Removed: Derivatives NOT Designated as Hedging Instruments Location of Derivative Gain (Loss) 2023 2022 2021
−Removed: Foreign exchange contracts – forwards Other expense – Currency gains (losses), net $ 26 $ 17 $ ( 26 )
−Removed: For the three years ended December 31, 2023, 2022 and 2021, we recorded net currency losses, net of $ 28 , $ 13 and $ 7 , respectively.
+Added: Derivatives NOT Designated as Hedging Instruments Location of Derivative Gain 2024 2023 2022
+Added: Foreign exchange contracts – forwards Other expense – Currency gains, net $ 24 $ 26 $ 17
+Added: 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
+Added: Table of Contents Legal Sign-off 2.24.25
Note 17 – Fair Value of Financial Assets and Liabilities
19 unchanged sentences
Short-term debt and current portion of long-term debt (1)
+Added: 585 592 567 567
Long-term debt
2 unchanged sentences
Xerox - Other Subsidiaries (2)
−Removed: 117 117 476 478
Total Long-term debt $ 2,814 $ 2,383 $ 2,710 $ 2,550
_____________
+Added: (1) Includes $ 388 of Xerox Corporation related party debt.
(2) Represents subsidiaries of Xerox Corporation.
3 unchanged sentences
Xerox 2024 Annual Report 136
+Added: Table of Contents Legal Sign-off 2.24.25
Note 18 – Employee Benefit Plans
7 unchanged sentences
In December 2023, the Trustees for the U.K.
−Removed: pension plan entered an insurance buy-in contract, in accordance with U.K.
+Added: pension plan entered a second insurance buy-in contract, in accordance with U.K.
pension regulations.
−Removed: 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.
+Added: 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.
1 unchanged sentence
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.
−Removed: The insurance 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.
+Added: 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.
−Removed: This buy-in contract was an extension of a similar contract purchased in 2022 that covered a portion of member benefit payments.
+Added: 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.
−Removed: 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 in the existing pension plan in the Netherlands.
+Added: 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.
−Removed: From a Company risk perspective, this portion of the 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.
+Added: 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.
1 unchanged sentence
Xerox 2024 Annual Report 137
+Added: Table of Contents Legal Sign-off 2.24.25
Pension Benefits
5 unchanged sentences
Service cost — — 5 5 1 1
−Removed: Interest cost (income) 116 ( 65 ) 188 123 10 8
+Added: Interest cost 88 116 182 188 8 10
Plan participants' contributions — — 1 1 5 7
−Removed: Actuarial loss (gain) 75 ( 643 ) 165 ( 1,697 ) ( 5 ) ( 59 )
+Added: Actuarial (gain) loss (1)
+Added: ( 136 ) 75 ( 281 ) 165 ( 3 ) ( 5 )
Currency exchange rate changes — — ( 157 ) 205 ( 8 ) 2
Plan amendment — — 54 36 — ( 3 )
−Removed: Plan curtailments — — — ( 20 ) — —
Benefits paid/settlements ( 165 ) ( 147 ) ( 274 ) ( 273 ) ( 23 ) ( 28 )
8 unchanged sentences
Benefits paid/settlements ( 165 ) ( 147 ) ( 274 ) ( 273 ) ( 23 ) ( 28 )
−Removed: Other — — — ( 2 ) — —
Fair Value of Plan Assets, December 31 $ 1,407 $ 1,528 $ 4,220 $ 4,662 $ — $ —
9 unchanged sentences
_____________
+Added: (1) Changes in actuarial (gains) losses are primarily due to changes in discount rates.
(2) Includes under-funded and unfunded plans.
6 unchanged sentences
__________________________
−Removed: (1) Reflects pension net funded status liability.
+Added: (1) Reflects pension net funded status liability for both U.S.
(2) Includes amounts measured at fair value on a recurring basis at December 31, 2024 and 2023 of $ 11 and $ 13 , respectively.
9 unchanged sentences
Xerox 2024 Annual Report 138
+Added: Table of Contents Legal Sign-off 2.24.25
Aggregate information for pension plans with an accumulated benefit obligation in excess of plan assets is presented below.
34 unchanged sentences
Xerox 2024 Annual Report 139
+Added: Table of Contents Legal Sign-off 2.24.25
The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows:
11 unchanged sentences
Recognized net actuarial loss (gain) 18 16 13 62 11 23 ( 12 ) ( 12 ) ( 4 )
−Removed: Amortization of prior service (credit) cost — — ( 1 ) 5 1 ( 1 ) ( 15 ) ( 8 ) ( 66 )
+Added: Amortization of prior service cost (credit) — — — 8 5 1 ( 15 ) ( 15 ) ( 8 )
Recognized settlement loss 5 19 56 — 1 — — — —
3 unchanged sentences
Net Periodic Benefit Cost (Credit) $ 57 $ 67 $ 96 $ 87 $ 14 $ ( 50 ) $ ( 18 ) $ ( 16 ) $ ( 3 )
−Removed: Other changes in plan assets and benefit obligations recognized in Other Comprehensive (Loss) Income:
−Removed: Net actuarial loss (gain)
+Added: Other changes in plan assets and benefit obligations recognized in Other Comprehensive Loss:
+Added: Net actuarial (gain) loss
$ ( 8 ) $ 74 $ 16 $ ( 44 ) $ 298 $ 368 $ ( 3 ) $ ( 5 ) $ ( 57 )
1 unchanged sentence
Amortization of net actuarial (loss) gain ( 23 ) ( 35 ) ( 69 ) ( 62 ) ( 12 ) ( 23 ) 12 12 4
−Removed: Amortization of net prior service credit (cost) — — 1 ( 5 ) ( 1 ) 1 15 15 66
+Added: Amortization of net prior service (cost) credit — — ( 8 ) ( 5 ) ( 1 ) 15 15 15
Curtailment gain — — — — — 4 — — —
−Removed: Total Recognized in Other Comprehensive (Loss) Income (3)
+Added: Total Recognized in Other Comprehensive Loss (3)
$ ( 31 ) $ 39 $ ( 53 ) $ ( 62 ) $ 317 $ 420 $ 24 $ 19 $ ( 64 )
−Removed: Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive (Loss) Income $ 106 $ 43 $ ( 92 ) $ 331 $ 370 $ ( 511 ) $ 3 $ ( 67 ) $ ( 41 )
+Added: Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive Loss $ 26 $ 106 $ 43 $ 25 $ 331 $ 370 $ 6 $ 3 $ ( 67 )
_____________
−Removed: (1) Interest cost for Pension Benefits includes interest expense on non-TRA obligations of $ 284 , $ 205 and $ 150 and interest expense/(income) directly allocated to TRA participant accounts of $ 20 , $( 147 ) and $ 18 for the years ended December 31, 2023, 2022 and 2021, respectively.
−Removed: (2) Expected return on plan assets includes expected investment income on non-TRA assets of $ 300 , $ 302 and $ 307 and actual investment income/(loss) on TRA assets of $ 20 , $( 147 ) and $ 18 for the years ended December 31, 2023, 2022 and 2021, respectively.
−Removed: (3) Amounts represent the pre-tax effect included in Other comprehensive income.
−Removed: Refer to Note 24 - Other Comprehensive (Loss) Income for the related tax effects and the net of tax amounts.
+Added: (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.
+Added: (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.
+Added: (3) Amounts represent the pre-tax effect included in Other comprehensive loss.
+Added: Refer to Note 24 - Other Comprehensive Loss for the related tax effects and the net of tax amounts.
Plan Amendments
+Added: 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.
+Added: In addition to this transfer, the indexation target was increased from 75 % of price inflation to 100 % of price inflation.
+Added: 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.
+Added: From a Company risk perspective, this CDC plan operates just like a frozen defined contribution plan.
+Added: Although the Company's risk has been mitigated, under U.S.
+Added: 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.
+Added: 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.
−Removed: 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 approximately $ 72 in the PBO for this plan, with both amounts inclusive of other remeasurement adjustments for changes in actuarial assumptions.
+Added: 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
+Added: Xerox 2024 Annual Report 140
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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.
3 unchanged sentences
At December 31, 2024, the aggregate cost for this matter was estimated to be approximately GBP 15 million (approximately USD $ 19 ).
−Removed: This latest estimate reflects a most recent analysis completed by the Plan Actuary adjusted for market conditions at December 31, 2023.
+Added: 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.
−Removed: Xerox 2023 Annual Report 122
Retiree Health Plans:
2 unchanged sentences
These negative plan amendments resulted in a reduction of approximately $ 30 in the Company's postretirement benefit obligation.
−Removed: In December 2021, we amended our U.S.
−Removed: Retiree Health Plan to reduce certain benefits for existing union retirees through the reduction or elimination of coverage or cost-sharing subsidies for retiree health care and life insurance costs.
−Removed: This negative plan amendment resulted in a reduction of $ 50 in the postretirement benefit obligation.
Current Allocation
18 unchanged sentences
Guaranteed insurance contracts — — — — — — — 2,184 — 2,184
+Added: Other (2)(3)(4)
( 3 ) — — 163 160 51 12 — 64 127
2 unchanged sentences
(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.
−Removed: (2) 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.
−Removed: (3) At December 31, 2023, other Level 1 includes net non-financial (liabilities)/assets, such as due to/from broker, interest receivables and accrued expenses.
+Added: (2) Other Level 1 includes net non-financial (liabilities)/assets, such as due to/from broker, interest receivables and accrued expenses.
Plans had net liabilities of $( 3 ), while the non-U.S.
plans had net assets of $ 51 .
+Added: (3) Other NAV for U.S.
+Added: Plans (measured at NAV) includes mutual funds of $ 116 , which are invested approximately 70 % in fixed income securities and approximately 30 % in equity securities.
+Added: (4) Other NAV for the non-U.S.
+Added: Plans (measured at NAV) includes mortgage funds of $ 64 in our Netherlands plans.
Xerox 2024 Annual Report 141
+Added: Table of Contents Legal Sign-off 2.24.25
December 31, 2023
18 unchanged sentences
(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.
+Added: (2) Other Level 1 includes net non-financial (liabilities)/assets, such as due to/from broker, interest receivables and accrued expenses.
+Added: Plans had net liabilities of $( 18 ) , while the non-U.S.
+Added: 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.
−Removed: (3) Other Level 1 includes net non-financial, Non-U.S assets of $ 22 , such as due to/from broker, interest receivables and accrued expenses.
The following tables represents a rollforward of the defined benefit plans assets measured at fair value using significant unobservable inputs (Level 3 assets):
8 unchanged sentences
Sales ( 22 ) — — ( 3 ) ( 3 )
−Removed: Unrealized gains (losses) 3 ( 31 ) — ( 9 ) ( 40 )
+Added: Unrealized losses ( 1 ) ( 12 ) ( 4 ) ( 253 ) ( 269 )
Currency translation — ( 7 ) — ( 42 ) ( 49 )
5 unchanged sentences
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.
−Removed: 2022 and 2023 purchases of Guaranteed Insurance Contracts (GICs) include the purchase of a buy-in annuity contract, which has been valued based on the member benefits covered by the contract adjusted for current market factors.
+Added: 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
+Added: Table of Contents Legal Sign-off 2.24.25
Investment Strategy
5 unchanged sentences
Private equity/venture capital 7 % 7 % 8 % 8 %
−Removed: Other 2 % 64 % 2 % 23 %
+Added: 2 % 59 % 2 % 64 %
Total Investment Strategy 100 % 100 % 100 % 100 %
_____________
−Removed: (1) Target allows for an additional allocation to synthetic equity which is offset by cash.
+Added: (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.
32 unchanged sentences
Xerox 2024 Annual Report 143
+Added: Table of Contents Legal Sign-off 2.24.25
Estimated Future Benefit Payments
43 unchanged sentences
Xerox 2024 Annual Report 144
+Added: Table of Contents Legal Sign-off 2.24.25
Note 19 - Income and Other Taxes
3 unchanged sentences
Domestic loss $ ( 877 ) $ ( 89 ) $ ( 319 )
−Removed: Foreign income (loss) 61 ( 6 ) ( 131 )
+Added: Foreign (loss) income ( 339 ) 61 ( 6 )
Loss before Income taxes $ ( 1,216 ) $ ( 28 ) $ ( 325 )
−Removed: The components of Income tax benefit were as follows:
+Added: The components of Income tax expense (benefit) were as follows:
Year Ended December 31,
9 unchanged sentences
Deferred ( 15 ) ( 24 ) ( 9 )
−Removed: Income Tax Benefit $ ( 29 ) $ ( 3 ) $ ( 17 )
+Added: Income tax expense (benefit) $ 105 $ ( 29 ) $ ( 3 )
A reconciliation of the U.S.
23 unchanged sentences
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.
−Removed: Total income tax expense was allocated to the following items:
+Added: Income taxes were allocated to the following items:
Year Ended December 31,
2024 2023 2022
−Removed: Pre-tax loss $ ( 29 ) $ ( 3 ) $ ( 17 )
−Removed: Common shareholders' equity:
+Added: Income tax expense (benefit) on Loss before income taxes $ 105 $ ( 29 ) $ ( 3 )
+Added: Income tax (expense) benefit Common shareholders' equity:
Changes in defined benefit plans ( 10 ) 93 70
1 unchanged sentence
Translation adjustments ( 8 ) — —
−Removed: Total Income Tax Expense $ 65 $ 66 $ 121
+Added: Additional paid-in capital 6 — —
Xerox 2024 Annual Report 145
+Added: Table of Contents Legal Sign-off 2.24.25
Unrecognized Tax Benefits and Audit Resolutions
2 unchanged sentences
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.
−Removed: 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 benefits.
+Added: 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.
13 unchanged sentences
Settlements with taxing authorities (1)
+Added: ( 29 ) ( 13 ) —
Reductions related to lapse of statute of limitations ( 18 ) ( 2 ) ( 3 )
12 unchanged sentences
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.
+Added: 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.
2 unchanged sentences
Xerox 2024 Annual Report 146
+Added: Table of Contents Legal Sign-off 2.24.25
The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows:
7 unchanged sentences
Pension 122 147
+Added: Finance lease and installment sales 64 —
Operating lease liabilities 33 43
16 unchanged sentences
(1) Represents the deferred tax liabilities recorded in Other long-term liabilities - refer to Note 14 - Supplementary Financial Information.
−Removed: We record the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and the amounts reported, as well as net operating loss and tax credit carryforwards.
+Added: 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.
3 unchanged sentences
tax credit carryforwards with a limited life.
−Removed: The net change in the total valuation allowance for the years ended December 31, 2023, 2022 and 2021 was an increase of $ 9 , an increase of $ 9 and a decrease of $ 39 , respectively.
+Added: 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.
1 unchanged sentence
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.
−Removed: At December 31, 2023, we had tax credit carryforwards of $ 106 available to offset future income taxes, of which $ 3 are available to carryforward indefinitely while the majority of the remaining $ 103 will expire 2024 through 2026 if not utilized.
−Removed: We also had net operating loss carryforwards for income tax purposes of $ 392 that will expire 2023 through 2043, if not utilized, and $ 1.7 billion available to offset future taxable income indefinitely.
+Added: 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.
+Added: 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
+Added: Table of Contents Legal Sign-off 2.24.25
Note 20 – Contingencies and Litigation
29 unchanged sentences
Liens on Brazilian assets — —
−Removed: The increase in the unreserved portion of the tax contingency, inclusive of any related interest, was primarily related to currency and interest.
+Added: 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.
5 unchanged sentences
Xerox 2024 Annual Report 148
+Added: Table of Contents Legal Sign-off 2.24.25
Litigation Matters
1 unchanged sentence
Icahn, et al.:
−Removed: On December 13, 2019, alleged 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).
+Added: 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.
9 unchanged sentences
Claims asserted against the Directors were later dismissed.
−Removed: In December 2021, the Xerox Holdings Board approved the formation of a Special Litigation Committee (SLC) to investigate and evaluate Miami Firefighters' claims and determine the course of action that would be in the best interests of the Company and its shareholders.
−Removed: The SLC concluded that the claims were without merit and pursuing them would not be in the best interest of Xerox or its shareholders.
−Removed: The SLC's request that those claims be dismissed is pending before a New York state appellate court.
−Removed: Xerox Holdings Corporation v.
−Removed: Factory Mutual Insurance Company and Related Actions:
−Removed: On March 10, 2021, Xerox Holdings Corporation (Xerox Holdings) filed a complaint for breach of contract and declaratory judgment against Factory Mutual Insurance Company (FM) in Rhode Island Superior Court, Providence County seeking insurance coverage for business interruption losses resulting from the coronavirus/COVID-19 pandemic.
−Removed: Xerox Holdings alleges that FM agreed to provide Xerox Holdings with up to $ 1 billion in per-occurrence coverage for losses resulting from pandemic-related loss or damage to certain real and other property, including business interruption loss resulting from insured property damage;
−Removed: that Xerox Holdings’ worldwide actual and projected losses through the end of 2020 totaled in excess of $ 300 ;
−Removed: and that FM incorrectly denied coverage for those losses.
−Removed: Xerox Holdings seeks full coverage of costs and losses under FM’s policy.
−Removed: Subsidiaries of Xerox Holdings filed similar complaints and related requests for arbitration in Toronto, London, and Amsterdam for Canadian, UK and European losses.
−Removed: The parties have agreed to stay all non-U.S.
−Removed: proceedings pending the outcome of the U.S.
−Removed: litigation is in abeyance as the Rhode Island Supreme Court prepares to hear another COVID-19 insurance coverage case against a FM affiliate with overlapping legal issues.
+Added: The parties have reached a stipulation of settlement providing for certain governance changes and a payment by the Icahn defendants to Xerox.
+Added: 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
9 unchanged sentences
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.
−Removed: Xerox 2023 Annual Report 131
Other Agreements:
7 unchanged sentences
In the case of lease guarantees, we may contest the liabilities asserted under the lease.
−Removed: Further, our 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.
+Added: Xerox 2024 Annual Report 149
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: 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
17 unchanged sentences
Xerox 2024 Annual Report 150
+Added: Table of Contents Legal Sign-off 2.24.25
Note 21 - Preferred Stock
12 unchanged sentences
Xerox 2024 Annual Report 151
+Added: Table of Contents Legal Sign-off 2.24.25
Note 22 – Shareholders’ Equity
16 unchanged sentences
The following table reflects the changes in Common and Treasury stock shares (shares in thousands).
−Removed: The Treasury stock repurchases in the table below include the repurchases under both the prior Xerox Corporation authorized share repurchase program and the current Xerox Holdings Corporation authorized share repurchase program.
+Added: 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
9 unchanged sentences
Stock based compensation plans, net 1,291 —
−Removed: Acquisition of Treasury stock — 34,245
−Removed: Cancellation of Treasury stock ( 34,245 ) ( 34,245 )
Balance at December 31, 2024 124,435 —
1 unchanged sentence
Xerox 2024 Annual Report 152
+Added: Table of Contents Legal Sign-off 2.24.25
Note 23 – Stock-Based Compensation
16 unchanged sentences
Performance Share Units
−Removed: PSU awards are comprised of performance-based components (Earnings per share, Revenue and Free cash flow) as well as market-based components (Relative Total Shareholder Return (RTSR) and Absolute Share Price).
−Removed: PSUs granted in 2023 are entirely market-based.
−Removed: PSUs granted in 2022 and 2021 are one-half performance-based and one-half market-based.
+Added: 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).
+Added: PSUs granted in 2024 are entirely performance-based with an RTSR modifier - see Market-Based Component below.
+Added: 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:
1 unchanged sentence
Performance Metric 2024 2023 2022
+Added: Operating income improvement (1)
+Added: 100 % — % — %
Earnings per share — % — % 50 %
−Removed: Revenue — % — % 25 %
−Removed: Free cash flow — % — % 25 %
Relative total shareholder return — % 100 % — %
1 unchanged sentence
100 % 100 % 100 %
+Added: (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.
1 unchanged sentence
Performance-Based Component:
−Removed: This PSU component vests contingent upon meeting pre-determined cumulative performance metrics.
+Added: This PSU component vests contingent upon meeting predetermined annual and/or cumulative performance metrics.
+Added: 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 %.
+Added: 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.
−Removed: Compensation expense is recognized on a straight-line basis over the vesting period, based on management's estimate of the number of shares expected to vest and based on meeting the performance metrics.
−Removed: If the cumulative three-year 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.
+Added: 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.
+Added: 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.
+Added: Xerox 2024 Annual Report 153
+Added: Table of Contents Legal Sign-off 2.24.25
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).
−Removed: RTSR will be determined by ranking Xerox Holdings Corporation and the companies within two distinct market indices, as approved by the Compensation Committee of the Board, from highest to lowest according to their respective TSRs, for each of the three performance periods.
−Removed: Payout for this portion of the PSU will be determined based on the weighted average of Xerox Holdings Corporation's payout for each of the three performance periods.
−Removed: The Absolute Share Price metric, included as the
−Removed: Xerox 2023 Annual Report 135
−Removed: market-based component of the 2022 and 2021 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.
+Added: 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.
+Added: 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 %.
+Added: 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.
+Added: 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).
+Added: 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.
+Added: 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.
+Added: 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.
−Removed: A summary of Xerox Holdings key valuation input assumptions used in the Monte Carlo simulation relative to awards granted were as follows:
+Added: 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
11 unchanged sentences
Our RTSR and Absolute Share Price metrics are compared against total return targets to determine the payout as follows:
−Removed: Payout as a Percent of Target 2023 Percentile Ranking Return Targets (1)
−Removed: 2022 Total Return Targets (1)
+Added: 2024 2023 2022
+Added: Payout Percentage Percentile Ranking Return Targets (1)
+Added: Percentile Ranking Return Targets (1)
Total Return Targets (1)
−Removed: 200 % 75th and above
−Removed: $ 30.00 and above
+Added: 200 % n/a 75th and above
$ 30.00 and above
−Removed: 100 % 50th $ 25.00 $ 30.00
−Removed: 50 % 25th $ 20.00 $ 27.00
−Removed: 0 % Below 25th
−Removed: Below $ 20.00
+Added: 100 % n/a 50th $ 25.00
+Added: 50 % n/a 25th $ 20.00
+Added: 25 % 75th and above
+Added: 0 % 50th Below 25th
Below $ 20.00
+Added: ( 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.
+Added: Xerox 2024 Annual Report 154
+Added: Table of Contents Legal Sign-off 2.24.25
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.
1 unchanged sentence
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.
−Removed: Xerox 2023 Annual Report 136
Summary of Stock-based Compensation Activity
9 unchanged sentences
Outstanding at January 1 2,039 $ 24.18 1,729 $ 28.38 2,818 $ 25.47
−Removed: 940 22.97 977 25.72 1,195 24.67
+Added: Granted 1,243 13.89 940 22.97 977 25.72
— — — — ( 644 ) 27.95
5 unchanged sentences
No other PSUs vested in 2022.
−Removed: (3) 2021 includes 60 shares associated with the over-performance of our 2018 PSU grant.
(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.
15 unchanged sentences
Xerox 2024 Annual Report 155
−Removed: Note 24 – Other Comprehensive (Loss) Income
−Removed: Other Comprehensive (Loss) Income is comprised of the following:
+Added: Table of Contents Legal Sign-off 2.24.25
+Added: Note 24 – Other Comprehensive Loss
+Added: Other Comprehensive Loss is comprised of the following:
Year Ended December 31,
1 unchanged sentence
Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax
−Removed: Net Translation Adjustments Gains (Losses) $ 191 $ 191 $ ( 376 ) $ ( 376 ) $ ( 145 ) $ ( 141 )
+Added: Net Translation Adjustments (Losses) Gains $ ( 112 ) $ ( 120 ) $ 191 $ 191 $ ( 376 ) $ ( 376 )
Unrealized (Losses) Gains
4 unchanged sentences
Net Unrealized Gains (Losses) 10 9 — 1 ( 1 ) ( 2 )
−Removed: Defined Benefit Plans (Losses) Gains
−Removed: Net actuarial/prior service (losses) gains ( 400 ) ( 300 ) ( 373 ) ( 284 ) 537 409
+Added: Defined Benefit Plans Gains (Losses)
+Added: Net actuarial/prior service gains (losses) 3 ( 3 ) ( 400 ) ( 300 ) ( 373 ) ( 284 )
Prior service amortization/curtailment (2)
2 unchanged sentences
73 65 35 26 88 66
−Removed: Other (losses) gains (3)
+Added: Other gains (losses) (3)
29 29 ( 49 ) ( 49 ) 62 61
−Removed: Changes in Defined Benefit Plans (Losses) Gains ( 424 ) ( 331 ) ( 241 ) ( 171 ) 632 489
−Removed: Other Comprehensive (Loss) Income $ ( 233 ) $ ( 139 ) $ ( 618 ) $ ( 549 ) $ 482 $ 344
+Added: Changes in Defined Benefit Plans Gains (Losses) 98 88 ( 424 ) ( 331 ) ( 241 ) ( 171 )
+Added: Other Comprehensive Loss $ ( 4 ) $ ( 23 ) $ ( 233 ) $ ( 139 ) $ ( 618 ) $ ( 549 )
_____________
6 unchanged sentences
Cumulative translation adjustments $ ( 2,166 ) $ ( 2,046 ) $ ( 2,237 )
−Removed: Other unrealized losses, net ( 3 ) ( 4 ) ( 2 )
+Added: Other unrealized gains (losses), net 6 ( 3 ) ( 4 )
Benefit plans net actuarial losses and prior service credits ( 1,539 ) ( 1,627 ) ( 1,296 )
2 unchanged sentences
Xerox 2024 Annual Report 156
+Added: Table of Contents Legal Sign-off 2.24.25
Note 25 – Loss per Share
3 unchanged sentences
Basic Loss per Share:
−Removed: Net Income (Loss) $ 1 $ ( 322 ) $ ( 455 )
+Added: Net (Loss) Income $ ( 1,321 ) $ 1 $ ( 322 )
Accrued dividends on preferred stock ( 14 ) ( 14 ) ( 14 )
3 unchanged sentences
Diluted Loss per Share:
−Removed: Net Income (Loss) $ 1 $ ( 322 ) $ ( 455 )
+Added: Net (Loss) Income $ ( 1,321 ) $ 1 $ ( 322 )
Accrued dividends on preferred stock ( 14 ) ( 14 ) ( 14 )
11 unchanged sentences
Convertible preferred stock 6,742 6,742 6,742
+Added: Convertible notes (1)
Total Anti-Dilutive Securities 34,708 13,684 12,278
Dividends per Common Share $ 1.00 $ 1.00 $ 1.00
+Added: _____________
+Added: (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
+Added: Table of Contents Legal Sign-off 2.24.25
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
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.