What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-10 compared with 2025-08-07 · 555 added, 315 removed, 1236 unchanged (41% of the section changed)

1 unchanged sentence

XEROX HOLDINGS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENTS OF LOSS (UNAUDITED)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions, except per-share data) 2025 2024 2025 2024

9 unchanged sentences

Selling, administrative and general expenses 477 370 1,223 1,160

Goodwill impairment — 1,058 — 1,058

Restructuring and related costs, net 59 56 68 107

3 unchanged sentences

Total Costs and Expenses 2,261 2,615 5,421 5,820

(Loss) Income before Income Taxes ( 60 ) 25 ( 127 ) ( 125 )

Income tax expense (benefit) 46 7 69 ( 30 )

Net (Loss) Income ( 106 ) 18 ( 196 ) ( 95 )

Loss before Income Taxes ( 300 ) ( 1,087 ) ( 427 ) ( 1,212 )

Income tax expense 460 118 529 88

Net Loss ( 760 ) ( 1,205 ) ( 956 ) ( 1,300 )

Preferred stock dividends, net ( 4 ) ( 4 ) ( 11 ) ( 11 )

Net (Loss) Income attributable to Common Shareholders $ ( 109 ) $ 15 $ ( 203 ) $ ( 102 )

Basic (Loss) Income per Share $ ( 0.87 ) $ 0.12 $ ( 1.62 ) $ ( 0.83 )

Diluted (Loss) Income per Share $ ( 0.87 ) $ 0.11 $ ( 1.62 ) $ ( 0.83 )

Net Loss attributable to Common Shareholders $ ( 764 ) $ ( 1,209 ) $ ( 967 ) $ ( 1,311 )

Basic Loss per Share $ ( 6.01 ) $ ( 9.71 ) $ ( 7.67 ) $ ( 10.55 )

Diluted Loss per Share $ ( 6.01 ) $ ( 9.71 ) $ ( 7.67 ) $ ( 10.55 )

_____________

(1) In 2025, certain reclassifications were made within the Condensed Consolidated Statement of (Loss) Income to the prior periods in order to conform to the current period reporting.

(1) In 2025, certain reclassifications were made within the Condensed Consolidated Statement of Loss to the prior periods in order to conform to the current period reporting.

Refer to the Segments section of Note 1 - Basis of Presentation for additional information.

2 unchanged sentences

XEROX HOLDINGS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

Net (Loss) Income $ ( 106 ) $ 18 $ ( 196 ) $ ( 95 )

Other Comprehensive Income (Loss), Net (1)

Net Loss $ ( 760 ) $ ( 1,205 ) $ ( 956 ) $ ( 1,300 )

Other Comprehensive (Loss) Income , Net (1)

Translation adjustments, net ( 42 ) 192 292 140

Unrealized losses, net ( 4 ) — ( 6 ) ( 1 )

Unrealized (losses) gains, net ( 2 ) 5 ( 8 ) 4

Changes in defined benefit plans, net 35 ( 24 ) ( 42 ) 18

Other Comprehensive Income (Loss), Net 169 ( 14 ) 251 ( 11 )

Comprehensive Income (Loss), Net $ 63 $ 4 $ 55 $ ( 106 )

Other Comprehensive (Loss) Income, Net ( 9 ) 173 242 162

Comprehensive Loss, Net $ ( 769 ) $ ( 1,032 ) $ ( 714 ) $ ( 1,138 )

_____________

(1) Refer to Note 18 - Other Comprehensive Income (Loss) for gross components of Other comprehensive income (loss), net, reclassification adjustments out of Accumulated other comprehensive loss and related tax effects.

(1) Refer to Note 19 - Other Comprehensive (Loss) Income for gross components of Other comprehensive (loss) income, net reclassification adjustments out of Accumulated other comprehensive loss and related tax effects.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data in thousands) June 30,

(in millions, except share data in thousands) September 30,

2025 December 31,

41 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended

Nine Months Ended

September 30,

(in millions) 2025 2024

1 unchanged sentence

Net Loss $ ( 956 ) $ ( 1,300 )

Adjustments to reconcile Net loss to Net cash (used in) provided by operating activities

Adjustments to reconcile Net loss to Net cash provided by operating activities:

Depreciation and amortization 224 177

Provisions 67 92

Inventory-related purchase accounting adjustment - noncash 102 —

Effective settlement of a pre-existing relationship between Lexmark and Xerox ( 43 ) —

Net gain on sales of businesses and assets ( 6 ) ( 3 )

1 unchanged sentence

Stock-based compensation 33 38

Goodwill impairment — 1,058

Restructuring and asset impairment charges 69 80

2 unchanged sentences

Contributions to retirement plans ( 123 ) ( 114 )

Increase in accounts receivable and billed portion of finance receivables ( 44 ) ( 32 )

(Increase) decrease in accounts receivable and billed portion of finance receivables ( 41 ) 18

Increase in inventories ( 123 ) ( 136 )

4 unchanged sentences

Decrease in accrued compensation ( 39 ) ( 78 )

Decrease in other current and long-term liabilities ( 40 ) ( 52 )

Increase (decrease) in other current and long-term liabilities 58 ( 83 )

Net change in income tax assets and liabilities 479 44

1 unchanged sentence

Other operating, net 46 —

Net cash (used in) provided by operating activities ( 100 ) 44

Net cash provided by operating activities 16 160

Cash Flows from Investing Activities

5 unchanged sentences

Cash Flows from Financing Activities

Net proceeds from short term debt 218 —

Proceeds from issuance of long-term debt 1,137 906

6 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash 5 ( 12 )

Increase (decrease) in cash, cash equivalents and restricted cash 354 ( 66 )

Decrease in cash, cash equivalents and restricted cash ( 96 ) ( 27 )

Cash, cash equivalents and restricted cash at beginning of period 631 617

3 unchanged sentences

XEROX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENTS OF LOSS (UNAUDITED)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

9 unchanged sentences

Selling, administrative and general expenses 476 369 1,221 1,158

Goodwill impairment — 1,058 — 1,058

Restructuring and related costs, net 59 56 68 107

3 unchanged sentences

Total Costs and Expenses 2,259 2,614 5,414 5,818

(Loss) Income before Income Taxes ( 58 ) 26 ( 122 ) ( 124 )

Income tax expense (benefit) 46 7 69 ( 30 )

Net (Loss) Income $ ( 104 ) $ 19 $ ( 191 ) $ ( 94 )

Loss before Income Taxes ( 298 ) ( 1,086 ) ( 420 ) ( 1,210 )

Income tax expense 460 118 529 88

Net Loss $ ( 758 ) $ ( 1,204 ) $ ( 949 ) $ ( 1,298 )

_____________

(1) In 2025, certain reclassifications were made within the Condensed Consolidated Statement of (Loss) Income to the prior periods in order to conform to the current period reporting.

(1) In 2025, certain reclassifications were made within the Condensed Consolidated Statement of Loss to the prior periods in order to conform to the current period reporting.

Refer to the Segments section of Note 1 - Basis of Presentation for additional information.

2 unchanged sentences

XEROX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

Net (Loss) Income $ ( 104 ) $ 19 $ ( 191 ) $ ( 94 )

Other Comprehensive Income (Loss), Net (1)

Net Loss $ ( 758 ) $ ( 1,204 ) $ ( 949 ) $ ( 1,298 )

Other Comprehensive (Loss) Income, Net (1)

Translation adjustments ,net ( 42 ) 192 292 140

Unrealized losses, net ( 4 ) — ( 6 ) ( 1 )

Unrealized (losses) gains, net ( 2 ) 5 ( 8 ) 4

Changes in defined benefit plans, net 35 ( 24 ) ( 42 ) 18

Other Comprehensive Income (Loss), Net 169 ( 14 ) 251 ( 11 )

Comprehensive Income (Loss), Net $ 65 $ 5 $ 60 $ ( 105 )

Other Comprehensive (Loss) Income, Net ( 9 ) 173 242 162

Comprehensive Loss, Net $ ( 767 ) $ ( 1,031 ) $ ( 707 ) $ ( 1,136 )

_____________

(1) Refer to Note 19 - Other Comprehensive (Loss) Income for gross components of Other comprehensive (Loss) Income, net reclassification adjustments out of Accumulated other comprehensive loss and related tax effects.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions) June 30,

(in millions) September 30,

2025 December 31,

40 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended

Nine Months Ended

September 30,

(in millions) 2025 2024

1 unchanged sentence

Net Loss $ ( 949 ) $ ( 1,298 )

Adjustments to reconcile Net loss to Net cash (used in) provided by operating activities

Adjustments to reconcile Net loss to Net cash provided by operating activities:

Depreciation and amortization 224 177

Provisions 67 92

Inventory-related purchase accounting adjustment - noncash 102 —

Effective settlement of a pre-existing relationship between Lexmark and Xerox ( 43 ) —

Net gain on sales of businesses and assets ( 6 ) ( 3 )

1 unchanged sentence

Stock-based compensation 33 38

Goodwill impairment — 1,058

Restructuring and asset impairment charges 69 80

2 unchanged sentences

Contributions to retirement plans ( 123 ) ( 114 )

Increase in accounts receivable and billed portion of finance receivables ( 44 ) ( 32 )

(Increase) decrease in accounts receivable and billed portion of finance receivables ( 41 ) 18

Increase in inventories ( 123 ) ( 136 )

1 unchanged sentence

Decrease in finance receivables 338 496

Decrease in other current and long-term assets 11 13

(Increase) decrease in other current and long-term assets ( 3 ) 14

Increase (decrease) in accounts payable 4 ( 143 )

Decrease in accrued compensation ( 39 ) ( 78 )

Decrease in other current and long-term liabilities ( 40 ) ( 52 )

Increase (decrease) in other current and long-term liabilities 58 ( 83 )

Net change in income tax assets and liabilities 479 44

1 unchanged sentence

Other operating, net 46 —

Net cash (used in) provided by operating activities ( 100 ) 44

Net cash provided by operating activities 16 160

Cash Flows from Investing Activities

5 unchanged sentences

Cash Flows from Financing Activities

Net proceeds from short term debt 218 —

Proceeds from issuance of long-term debt 1,137 906

4 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash 5 ( 12 )

Increase (decrease) in cash, cash equivalents and restricted cash 351 ( 68 )

Decrease in cash, cash equivalents and restricted cash ( 96 ) ( 27 )

Cash, cash equivalents and restricted cash at beginning of period 630 617

22 unchanged sentences

Refer to the Segments section below, and Note 3 - Revenue, for additional information.

For convenience and ease of reference, we refer to the financial statement caption “(Loss) Income before Income Taxes” as “pre-tax (loss) income”.

For convenience and ease of reference, we refer to the financial statement caption “Loss before Income Taxes” as “pre-tax loss”.

Notes to the Condensed Consolidated Financial Statements reflect the activity for both Xerox Holdings and Xerox for all periods presented, unless otherwise noted.

Lexmark Acquisition

On July 1, 2025, Xerox Corporation completed its previously announced acquisition of all of the issued and outstanding equity of Lexmark International II, LLC (Lexmark) from Ninestar Group Company Limited (the Seller) (the Lexmark Acquisition).

Refer to Note 6 - Acquisition for additional information.

During the first quarter of 2025, the Company updated its determination of reportable segments to align with a change in how the Chief Operating Decision Maker (CODM), our Chief Executive Officer (CEO), allocates resources and assesses performance against the Company’s key growth strategies.

4 unchanged sentences

Xerox 2025 Form 10-Q 11

In connection with these changes to our reportable segments, certain reclassifications were made to the Condensed Consolidated Statement of (Loss) Income as follows:

In connection with these changes to our reportable segments, certain reclassifications were made to the Condensed Consolidated Statement of Loss as follows:

Three Months Ended

June 30, 2024 Six Months Ended

June 30, 2024

September 30, 2024 Nine Months Ended

September 30, 2024

Previously Reported Reclassification As Reported Previously Reported Reclassification As Reported

4 unchanged sentences

Interim Impairment Evaluation

Our goodwill balance was $ 1,984 and $ 1,937 at June 30, 2025 and December 31, 2024, respectively.

Our goodwill balance was $ 2,182 and $ 1,937 at September 30, 2025 and December 31, 2024, respectively.

We assess goodwill for impairment at least annually during the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

1 unchanged sentence

As a result of the new operating and reportable segments, we also reassessed our reporting units for the evaluation of goodwill.

Prior to this change, consistent with the determination that we had two operating/reportable segments - Print and Other, and Xerox Financial Solutions (XFS), we had also determined that that the Print and Other, and XFS operating segments were also our reporting units for goodwill assessment purposes.

Prior to this change, consistent with the determination that we had two operating/reportable segments - Print and Other, and Xerox Financial Solutions (XFS), we had also determined that the Print and Other, and XFS operating segments were also our reporting units for goodwill assessment purposes.

Our reassessment during the first quarter of 2025 determined similarly, consistent with the determination that we had two operating and reportable segments, we also have two reporting units – Print and Other, and IT Solutions.

3 unchanged sentences

Using a combination of both an Income Approach and a Market Approach, we assessed the relative fair values of our new reporting units, and we determined that approximately $ 1,567 of Goodwill was allocable to the Print and Other segment, and approximately $ 370 of goodwill was allocable to the IT Solutions segment.

During the second quarter 2025, the Company's stock price and market capitalization experienced a decline.

However, the decline was not considered to be sustained due to the ongoing uncertainty in the capital markets, as a result of the uncertain nature of the federal government's tariff policy and rate proposals, and the associated potential macroeconomic impacts.

We have evaluated these factors individually and, in the aggregate, and we believe that despite the ongoing uncertainty surrounding tariffs, that we have sufficient plans to mitigate and manage the uncertainty.

Accordingly, based on our interim assessment as of June 30, 2025, we determined that it was more-likely-than-not that the fair value of the Print and Other and IT Solutions reporting units was still greater than their net book value and that we did not have a “triggering event” requiring a quantitative assessment of Goodwill.

The Company's future performance varies from current expectations, assumptions, and estimates, including assumptions related to current macro-economic uncertainties, interest rates, inflationary pressure on product and labor costs, execution of Reinvention, and geopolitical uncertainty, the impairment analysis could be impacted and result in a reduction of the underlying cash flows used to estimate fair values resulting in a decline in fair value that may trigger future impairment charges.

Throughout 2025, the Company’s stock price and market capitalization have experienced a sustained decline, reflecting ongoing market uncertainty related to the federal government’s tariff policies, rate proposals, and associated macroeconomic impacts.

During the third quarter 2025, the Company recorded a valuation allowance against certain deferred tax assets, which, together with the Company’s recent operating losses, reduced total net assets and the carrying value of the Print and Other reporting unit.

The reduction in the carrying value of assets as a result of the additional valuation allowance and losses has been greater than the decline in market capitalization.

We evaluated these factors both individually and in the aggregate as part of our assessment of potential goodwill impairment indicators.

While the decline in market capitalization and the reduction in net assets were considered, management concluded that these factors did not, in the aggregate, constitute a “triggering event” requiring a quantitative goodwill impairment test.

Based on our interim assessment as of September 30, 2025, we determined that it was more-likely-than-not that the fair value of the Print and Other and IT Solutions reporting units was still greater than their respective net book values.

For additional information regarding the valuation allowances recorded during 2025, refer to the Valuation Allowance section below.

If the Company's future performance varies from current expectations, assumptions, and estimates, including assumptions related to current macro-economic uncertainties, interest rates, inflationary pressure on product and labor costs, execution of Reinvention, and geopolitical uncertainty, the impairment analysis could be impacted and result in a reduction of the underlying cash flows used to estimate fair values resulting in a decline in fair value that may trigger future impairment charges.

We will continue to monitor developments throughout the remainder of 2025 including updates to our forecasts as well as discount rates and our market capitalization, and as a result, an update of our assessment and related estimates may be required in the future.

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In determining the amount of deferred tax assets that are more-likely-than-not to be realized, we considered objective evidence including historical profitability, projected future taxable income, the expected timing of the reversals of existing temporary differences and prudent and feasible tax planning strategies.

Due to the change in certain tax planning strategies during the first quarter 2025, which were determined to no longer be prudent and feasible as a result of ongoing macroeconomic uncertainties, a valuation allowance of approximately $ 59 was recorded, primarily related to certain deferred tax assets in the U.S.

We have concluded that it is more-likely-than-not that those deferred tax assets will not be realized in the ordinary course of operations.

As of June 30, 2025, our total deferred tax asset balance was $ 551 , which is net of total valuation allowances of $ 567 .

Due to a change in certain tax planning strategies during the first quarter 2025 and lower than expected actual and estimated full year results as of the third quarter 2025, we concluded that certain deferred tax assets in the U.S.

are not more-likely-than-not to be realized.

This assessment was based on the available positive and negative evidence at September 30, 2025, including scheduling of deferred tax liabilities and projected income from operating activities.

Accordingly, a valuation allowance of approximately $ 59 and $ 478 was recorded in the first quarter 2025 and the third quarter 2025, respectively.

As of September 30, 2025, our total deferred tax asset balance was $ 101 , which is net of total valuation allowances of $ 1,090 .

The amount of the net deferred tax assets considered realizable, however, could change in the near term if additional objective information becomes available in the future, including the impacts of tax law changes, or if there are differences in the timing or amount of future reversals of existing taxable or deductible temporary differences.

Any such changes may result in the recognition or reversal of a valuation allowance, which could materially affect income tax expense in the period recognized and future periods.

Tax Law Change

On July 4, 2025, H.R.

1, the One Big Beautiful Bill Act (the Act), was signed into law.

Refer to Note 21 - Subsequent Events for additional information regarding the Act.

The Act includes several tax changes, such as making certain provisions from the Tax Cuts and Jobs Act permanent, updating international tax rules, and reinstating immediate expensing for domestic research expenditures.

The Act contains multiple effective dates, with certain provisions applicable beginning in 2025 and others in subsequent years.

The enactment of the 2025 provisions did not have a significant impact on our financial statements.

The Company will continue to evaluate the effect of the law change to results of operations and cash flows in future periods.

Note 2 – Recent Accounting Pronouncements

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Accounting Standard Updates to be Adopted:

Intangibles - Goodwill and Other - Internal Use Software

In September 2025, the FASB issued ASU 2025‑06 , Intangibles — Goodwill and Other — Internal-Use Software (Topic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software .

The amendments are intended to modernize the recognition and capitalization framework to reflect current software development practices, including iterative and agile methodologies, by removing references to "development stages".

It also clarifies the criteria for capitalization, which begins when both of the following occur:

(1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

The ASU permits companies to elect one of the following adoption methods to apply its amendments:

a prospective transition approach, a retrospective transition approach, or a modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption.

The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods.

Early adoption is permitted as of the beginning of an annual reporting period.

We are currently evaluating the adoption of this standard and its impact to the Company's consolidated financial statements and related disclosures.

Financial Instruments - Credit Losses

In July 2025, the FASB issued ASU 2025‑05 , Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides new optional guidance relating to the estimation of expected credit losses on current accounts receivable and current contract assets under ASC 326.

Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides new optional guidance relating to the

Xerox 2025 Form 10-Q 13

estimation of expected credit losses on current accounts receivable and current contract assets under Accounting Standards Codification 326.

This ASU permits entities to apply a practical expedient when estimating credit losses and is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted, and should be applied prospectively.

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We are currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.

Xerox 2025 Form 10-Q 13

Income Tax Disclosures

5 unchanged sentences

In 2025, the FASB also issued the following ASUs, which could impact the Company in the future but currently did not have, nor are expected to have, a material impact on our financial condition, results of operations or cash flows upon adoption.

• Derivatives and Hedging and Revenue from Contracts with Customers:

ASU 2025-07 , Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) - Derivative Scope Refinements and Scope Clarifications for Share-Based Consideration from a Customer in a Revenue Contract.

This update is effective for the annual period beginning after December 15, 2026, as well as interim periods within that period.

Early adoption is permitted.

• Compensation — Stock Compensation and Revenue from Contracts with Customers:

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This update is effective for the annual period beginning after December 15, 2026, as well as interim periods within that period.

• Liabilities:

ASU 2025-02 , Liabilities (Topic 405) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

This update is effective for the annual period beginning after December 15, 2025, as well as interim periods within that period.

Xerox 2025 Form 10-Q 14

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

3 unchanged sentences

Canada 125 117 336 364

Latin America 87 47 174 157

Asia Pacific 65 14 88 40

Other 49 49 140 151

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We normally do not have contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time.

Our contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advance billings for maintenance and other services to be performed and were approximately $ 137 and $ 130 at June 30, 2025 and December 31, 2024, respectively.

The majority of the balance at June 30, 2025 will be amortized to revenue over the next 30 months.

Our contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advance billings for maintenance and other services to be performed and were approximately $ 319 and $ 130 at September 30, 2025 and December 31, 2024, respectively.

The majority of the balance at September 30, 2025 will be amortized to revenue over the next 30 months.

Xerox 2025 Form 10-Q 15

The following table summarizes our contract liabilities activity:

Balance at January 1 st

Revenue recognized (1)

( 59 ) ( 52 )

Cash received (2)

Balance at March 31 st

Revenue recognized (1)

( 76 ) ( 47 )

Cash received (2)

Balance at June 30 th

Revenue recognized (1)

( 116 ) ( 49 )

Cash received (2)

Acquisition (4)

Balance at September 30 th

_____________

(1) Reflects amounts included in the beginning balance.

(2) Excludes revenue recognized during the period.

(3) Includes currency.

(4) Reflects the Lexmark Acquisition.

Refer to Note 6 - Acquisition for additional information regarding the Lexmark Acquisition.

Contract Costs:

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• Contract inducements, which are capitalized and amortized as a reduction of revenue over the term of the contract.

Xerox 2025 Form 10-Q 15

Changes in contract costs, net are as follows:

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Balance at June 30th, $ 143 $ 131

Acquisition (2)

Customer contract costs deferred 16 17

Amortization of customer contract costs ( 17 ) ( 16 )

Balance at September 30th, $ 158 $ 133

_____________

(1) Includes currency.

(2) Includes customer contract costs related to the Lexmark Acquisition.

Refer to Note 6 - Acquisitions for additional information.

Equipment and software used in the fulfillment of service arrangements, and where the Company retains control, are capitalized and depreciated over the shorter of their useful life or the term of the contract if an asset is contract specific.

Xerox 2025 Form 10-Q 16

Note 4 – Segment Reporting

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The segment also includes the delivery of managed services that involve a continuum of solutions and services that help our customers optimize their print and communications infrastructure, apply automation and simplification to maximize productivity, and ensure the highest levels of security.

This segment also includes Xerox Financial Services, a global financing solutions provider, primarily enabling the sale of our equipment and services (previously reported XFS segment), which includes commissions and other payments for the exclusive right to provide lease financing for Xerox products.

This segment also includes our recent Lexmark Acquisition.

In addition, the segment includes Xerox Financial Services, a global financing solutions provider, primarily enabling the sale of our equipment and services (previously reported XFS segment), which includes commissions and other payments for the exclusive right to provide lease financing for Xerox products.

Refer to Note 6 - Acquisition, for additional information regarding the Lexmark Acquisition.

The product groupings range from:

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Our IT Solutions segment provides clients with global infrastructure technology solutions, with a focus on delivering business outcomes through a frictionless sales and service delivery experience.

IT Solutions’ offerings include the provision of hardware, software and associated services as well as product lifecycle, deployment and network

IT Solutions’ offerings include the provision of hardware, software and associated services as well as product lifecycle, deployment and network monitoring services, and other managed IT services.

It is comprised of our acquisition of ITSavvy, as well as our Canadian IT Services provider Powerland, and our legacy XBS IT solutions.

Xerox 2025 Form 10-Q 17

monitoring services, and other managed IT services.

It is comprised of our recent acquisition of ITsavvy, as well as our Canadian IT Services provider Powerland, and our legacy XBS IT solutions.

Segment Policy

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A segment expense is considered significant when it is material to the segment, is included in the measure of segment profit, and is included in information that is regularly provided to the CODM.

The CODM uses segment revenues, significant segment expenses, and segment profit, in part, to evaluate the performance of, and to allocate resources to each segment.

The CODM uses segment revenues, significant segment expenses, and segment profit to evaluate the performance of, and to allocate resources to each segment.

The CODM does not evaluate segment performance using discrete asset information, as a significant portion of the assets is managed at the total company level.

1 unchanged sentence

Selected financial information for our reportable segments was as follows:

Three months ended June 30, 2025

Three months ended September 30,

Print and Other IT Solutions Corporate (1)

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Xerox 2025 Form 10-Q 18

Six months ended June 30,

Nine months ended September 30,

Print and Other IT Solutions Corporate (1)

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(2) Intersegment revenue is primarily revenue from IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.

(3) As a result of the exit of certain production print manufacturing operations, Cost of sales and Cost of services, maintenance, rentals and other for the Print and Other Segment excludes inventory-related charges of $ 9 and $ 6 for the three months ended June 30, 2025 and 2024, respectively, and $ 16 and $ 38 , for the six months ended June 30, 2025 and 2024, respectively, as well as the cancellation of related purchase contracts $ 1 and $ 2 for the three months ended June 30, 2025 and 2024, respectively, and $ 1 and $ 6 for the six months ended June 30, 2025 and 2024, respectively.

(3) The three and nine months ended September 30, 2025 excludes the impact of a charge made for inventory and fixed asset purchase accounting adjustments related to the Lexmark Acquisition of $ 102 and $ 8 , respectively.

Refer to Note 6 - Acquisition for additional information regarding the Lexmark Acquisition.

(4) As a result of the exit of certain production print manufacturing operations, Cost of sales and Cost of services, maintenance, rentals and other for the Print and Other Segment excludes inventory-related charges of $ 3 and $ 0 for the three months ended September 30, 2025 and 2024, respectively, and $ 19 and $ 38 , for the nine months ended September 30, 2025 and 2024, respectively, as well as the cancellation of related purchase contracts $ 0 and $ 0 for the three months ended September 30, 2025 and 2024, respectively, and $ 1 and $ 6 for the nine months ended September 30, 2025 and 2024, respectively.

(5) The three and the nine months ended September 30, 2025 excludes the impact of fixed asset purchase accounting adjustments related to the Lexmark Acquisition of $ 8 , respectively.

Refer to Note 6 - Acquisition for additional information regarding the Lexmark Acquisition.

(6) Includes equipment financing interest expense associated with financing debt of the Company, which is fully allocated to the Print and Other segment in support of its Finance assets.

No interest expense is allocated to the IT Solutions segment, as the segment has no financing debt.

(5) Selling, administrative and general expenses include bad debt expense related to the Print and Other segment of $ 15 and $ 10 for the three months ended June 30, 2025 and 2024, respectively, and $ 24 and $ 25 for the six months ended June 30, 2025 and 2024, respectively.

(6) The Print and Other segment excludes Reinvention costs of $ 3 and $ 0 for the three months ended June 30, 2025 and 2024, respectively, and $ 9 and $ 0 for the six months ended June 30, 2025 and 2024, respectively, as well as Transaction and related costs, net of $ 6 and $ 0 for the three months ended June 30, 2025 and 2024, respectively, and $ 9 and $ 0 for the six months ended June 30, 2025 and 2024, respectively.

(7) Selling, administrative and general expenses include bad debt expense related to the Print and Other segment of $ 9 and $ 10 for the three months ended September 30, 2025 and 2024, respectively, and $ 33 and $ 35 for the nine months ended September 30, 2025 and 2024, respectively.

(8) For the three and nine months ended September 30, 2025, the Print and Other segment excludes the following costs:

Reinvention costs of $ 3 and $ 12 , respectively and Transaction and related costs, net of $ 23 and $ 32 , respectively.

Additionally, the Print and Other segment excludes $ 24 for the three and nine months ended September 30, 2025, respectively related to the settlement of pre-existing employment agreements as a result of the Lexmark Acquisition.

Refer to Note 6 - Acquisition for additional information regarding the Lexmark Acquisition.

(9) Intersegment expense primarily consists of costs related to the sale of IT hardware, software solutions and services by the IT Solutions segment, to the Print and Other segment.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

1 unchanged sentence

Total Segment Profit $ 65 $ 80 $ 146 $ 198

Goodwill impairment (1)

— ( 1,058 ) — ( 1,058 )

Restructuring and related costs, net ( 59 ) ( 56 ) ( 68 ) ( 107 )

1 unchanged sentence

Reinvention-related costs ( 3 ) — ( 12 ) —

Lexmark - fixed asset-related purchase accounting adjustment ( 16 ) — ( 16 ) —

Lexmark - inventory-related purchase accounting adjustment ( 102 ) — ( 102 ) —

Lexmark - settlement of pre-existing employment agreements ( 24 ) — ( 24 ) —

Transaction-related costs ( 23 ) — ( 32 ) —

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Total Interest income $ 35 $ 41 $ 108 $ 128

_____________

(1) Includes certain charges resulting from the exit of certain production print manufacturing operations, including inventory-related charges of approximately $ 9 and $ 6 for the three months ended June 30, 2025 and 2024, respectively, and $ 16 and $ 38 for the six months ended June 30, 2025 and 2024 respectively, as well as charges for the cancellation of related purchase contracts of $ 1 and $ 2 for the three months ended June 30, 2025 and 2024, respectively, and $ 1 and $ 6 for the six months ended June 30, 2025 and 2024, respectively.

(1) During the third quarter 2024 we recognized an after-tax non-cash impairment charge of $ 1,015 ($ 1,058 pre-tax) related to our Print and

Other reporting unit.

(2) Includes certain charges resulting from the exit of certain production print manufacturing operations, including inventory-related charges of approximately $ 3 and $ 0 for the three months ended September 30, 2025 and 2024, respectively, and $ 19 and $ 38 for the nine months ended September 30, 2025 and 2024 respectively, as well as charges for the cancellation of related purchase contracts of $ 0 and $ 0 for the three months ended September 30, 2025 and 2024, respectively, and $ 1 and $ 6 for the nine months ended September 30, 2025 and 2024, respectively.

Xerox 2025 Form 10-Q 20

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Location in Statements of (Loss) Income 2025 2024 2025 2024

4 unchanged sentences

Total Lease income $ 202 $ 283 $ 586 $ 796

Profit at lease commencement on sales-type leases was estimated to be $ 26 and $ 57 for the three months ended June 30, 2025 and 2024, respectively, and $ 57 and $ 107 for the six months ended June 30, 2025 and 2024,

respectively.

Profit at lease commencement on sales-type leases was estimated to be $ 31 and $ 56 for the three months ended September 30, 2025 and 2024, respectively, and $ 88 and $ 163 for the nine months ended September 30, 2025 and 2024, respectively.

Note 6 – Acquisition

Lexmark Acquisition

On December 22, 2024, Xerox Corporation entered into an Equity Purchase Agreement (the Lexmark Purchase Agreement) with Ninestar Group Company (the Seller) and Lexmark International II, LLC (Lexmark).

On July 1, 2025, Xerox Corporation completed the acquisition of all of the issued and outstanding equity of Lexmark, a leading developer, manufacturer and supplier of printing, imaging, device management, managed print services (MPS), cloud services, document workflow, and technology solutions (the Lexmark Acquisition).

Total Purchase Consideration

Total consideration paid to the Seller for the net assets acquired from Lexmark was $ 768 , which included Cash and cash equivalents acquired of $ 93 .

As part of the Lexmark Acquisition we effectively settled a pre-existing net payable of $ 43 with Lexmark.

The settlement is presented as an operating cash outflow to reflect the nature of the underlying net liability.

Assets Acquired and Liabilities Assumed

The transaction has been accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification (ASC) 805 — Business Combinations (ASC 805), which requires among other things, that assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date.

No contingent consideration was recorded by Xerox.

The preliminary application of acquisition accounting to the assets acquired, and liabilities assumed, as well as the pro forma results of operations are presented below.

Xerox 2025 Form 10-Q 21

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:

Assets acquired

Cash and cash equivalents $ 93

Accounts receivable, net 359

Finance receivables, net (1)

Inventories 421

Other current assets 111

Finance receivables due after one year, net (1)

Equipment on operating lease, net 65

Land, buildings and equipment, net 260

Intangible assets, net 763

Deferred tax assets 16

Other long-term assets 262

Total Assets acquired $ 2,623

Liabilities assumed

Accounts payable $ 476

Accrued compensation and benefits costs 56

Accrued expenses and other liabilities (2)

Long-term debt 323

Pension and other benefit liabilities 107

Post-retirement medical benefits 17

Other long-term liabilities (2)

Total Liabilities acquired $ 1,855

Net Assets acquired $ 768

_____________

(1) Comprised of sales-type lease receivables.

(2) Includes Deferred revenue accounted for in accordance with ASC 606, Revenue from Contracts with Customers .

Our estimates and assumptions are subject to change within the measurement period, which is up to 12 months after the acquisition date.

The allocation of the purchase price for this acquisition has been prepared on a preliminary basis and changes to the allocation of certain assets and liabilities may occur as additional information becomes available.

Additionally, as required by the Lexmark Agreement, Xerox provided its determination of the Closing Statement (as defined in the Lexmark Agreement) to the Lexmark Seller.

The final purchase price is subject to a final working capital adjustment, which we are still finalizing.

Transaction-related expense for the Lexmark Acquisition was approximately $ 23 and $ 32 during the three and nine months ended September 30, 2025 and were recorded within Selling, administrative and general expenses.

Our Consolidated Statements of Loss for the three and nine months ended September 30, 2025 includes revenue of $ 447 , respectively, and net loss of $ 114 , respectively, attributable to the Lexmark Acquisition since the date of acquisition.

Intangible Assets

The following table is a summary of the fair value estimates of the identifiable intangible assets and their estimated average useful lives:

July 1, 2025 Estimated Useful Life

Customer relationships $ 530 10 years

Developed technology 123 7 years

Trademarks 110 7 years

Total Identifiable intangible assets $ 763

The majority of customer-related intangible assets relates to customer contracts and related relationships.

The customer contracts and related relationships intangible asset represents the fair value of future projected revenue

Xerox 2025 Form 10-Q 22

that will be derived from sales of products and services to existing customers of Lexmark.

The asset was valued using a multi-period excess earnings method which calculates the present value of the estimated revenues and net cash flows derived from it.

The present value of projected future cash flows included judgment and assumptions regarding projected future revenues, projected expenses, attrition rates, and the discount rate.

Developed technology represents the estimated fair value of Lexmark’s proprietary technology and is valued using the relief-from-royalty method under the income approach.

This method is based on the application of a royalty rate to forecasted cash flows that are expected to be generated by the developed technology, which included judgment and assumptions regarding projected future revenues, projected expenses, and the discount rate.

Trade name and trademarks represents the estimated fair value of Lexmark’s trade name and trade marks.

The fair value was determined by applying the relief-from-royalty method under the income approach.

This method is based on the application of a royalty rate to forecasted cash flows that are expected to be generated by the trade name and trademarks, which included judgment and assumptions regarding projected future revenues, projected expenses, and the discount rate.

Intangible assets of approximately $ 4 are deductible for tax purposes as a result of previous taxable acquisitions made by Lexmark.

Goodwill in the amount of $ 207 was recognized for this acquisition and is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized, primarily expected synergies.

Goodwill of approximately $ 2 is deductible for tax purposes as a result of previous taxable acquisitions made by Lexmark.

All of the goodwill associated with the Lexmark Acquisition is allocated to our Print and Other Segment.

In conjunction with the acquisition, Xerox assumed approximately $ 323 of Lexmark debt that, concurrent with the closing date, was included in the renegotiated terms of Xerox's Term Loan B.

The assumed debt is included in Long-term debt in the Condensed Consolidated Balance Sheet.

It was determined that the fair value of the assumed debt approximated its book value and that the conversion of this debt within the Term Loan B represented a modification.

Refer to Note 13 - Debt for additional information regarding debt related to the Lexmark Acquisition.

Deferred Taxes

We provided deferred taxes and recorded other tax adjustments as part of the accounting for the acquisition primarily related to the estimated fair value adjustments for acquired intangible assets, as well as the elimination of a previously recorded deferred tax liability associated with Lexmark's historical tax deductible goodwill.

Pro Forma Information

The pro forma results presented below are calculated in accordance with ASC 805 - Business Combinations, and include the effects of the Lexmark Acquisition and related financing transactions, as if it had been consummated as of January 1, 2024, as well as the acquisition of ITSavvy, as if it had been consummated as of January 1, 2023.

ITSavvy is included in our 2025 reported results as the effective date of the acquisition was November 20, 2024.

Lexmark is included in our 2025 results beginning July 1, 2025, the effective date of acquisition.

Pro forma results for all periods presented below includes adjustments to align historical accounting policies and purchase accounting adjustments for amortization of intangible assets and real and personal property, the expensing of the step up of inventory to fair value, the elimination of historical goodwill impairment charges recorded by Lexmark of approximately $ 681 pre-tax, transaction expenses, the expense related to compensation to various employees resulting from the acquisition as well as interest expense related to debt financing.

The following table summarizes the pro forma financial information:

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Total revenue $ 1,961 $ 2,127 $ 5,934 $ 6,391

Net loss ( 666 ) ( 1,212 ) ( 893 ) ( 1,466 )

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 acquisitions and the cost of financing the acquisitions had taken place on January 1, 2024.

Xerox 2025 Form 10-Q 23

Note 7– Accounts Receivable, Net

Accounts receivable, net were as follows:

September 30,

2025 December 31,

3 unchanged sentences

_____________

(1) Accrued receivables include amounts to be invoiced in the subsequent quarter for current services provided.

(1) Accrued receivables include amounts to be invoiced in the subsequent quarter for current products and services provided.

The allowance for doubtful accounts was as follows:

8 unchanged sentences

Balance at June 30 th

Provision 4 8

Charge-offs ( 4 ) ( 5 )

Recoveries and other (1)

Balance at September 30 th

_____________

2 unchanged sentences

The allowance for doubtful accounts receivable is determined based on an assessment of past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends.

Based on that assessment the allowance for doubtful accounts as a percent of gross accounts receivable was 7.7 % at June 30, 2025 and 8.0 % at December 31, 2024.

Xerox 2025 Form 10-Q 20

Based on that assessment the allowance for doubtful accounts as a percent of gross accounts receivable was 5.9 % at September 30, 2025 and 8.0 % at December 31, 2024.

Accounts Receivable Sales Arrangements

We have one facility in Europe that enables us to sell accounts receivable associated with our distributor network on an ongoing basis, without recourse.

Under this arrangement, we sell our entire interest in the related accounts receivable for cash and no portion of the payment is held back or deferred by the purchaser.

We have two facilities in Europe that enable us to sell accounts receivable, without recourse on an ongoing basis.

Under these arrangements, we sell our entire interest in the related accounts receivable for cash.

Our arrangements are associated with our European distributor network as well as domestic sales in UK, France, Germany and Italy.

Accounts receivable sales activity was as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

2 unchanged sentences

(1) Losses on sales were not material.

Xerox 2025 Form 10-Q 24

Note 8 – Finance Receivables, Net

2 unchanged sentences

Finance receivables, net were as follows:

September 30,

2025 December 31,

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Since EMEA is comprised of various countries and regional economies, the risk profile within that portfolio segment is somewhat more diversified due to the varying economic conditions among and within those countries.

Based on that assessment, the allowance for doubtful credit losses as a percentage of gross finance receivables (net of unearned income) was 3.3 % at June 30, 2025 and 3.2 % at December 31, 2024.

Based on that assessment, the allowance for doubtful credit losses as a percentage of gross finance receivables (net of unearned income) was 3.3 % at September 30, 2025 and 3.2 % at December 31, 2024.

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.

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The allowance for doubtful credit losses as well as the related investment in finance receivables were as follows:

United States Canada EMEA Total

United States Canada EMEA Other Total

Balance at December 31, 2024

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Balance at June 30, 2025 $ 26 $ 6 $ 23 $ — $ 55

Provision 3 — 1 — 4

Charge-offs ( 2 ) — ( 4 ) — ( 6 )

Balance at September 30, 2025 (2)

$ 27 $ 6 $ 20 $ — $ 53

Balance at December 31, 2023

2 unchanged sentences

Charge-offs, net ( 7 ) ( 1 ) ( 4 ) — ( 12 )

1 — ( 1 ) — —

Balance at March 31, 2024 $ 49 $ 11 $ 28 $ — $ 88

2 unchanged sentences

Balance at June 30, 2024 $ 43 $ 7 $ 29 $ — $ 79

Provision ( 5 ) 5 1 — 1

Charge-offs ( 6 ) ( 1 ) ( 4 ) — ( 11 )

Balance at September 30, 2024 $ 32 $ 12 $ 27 $ — $ 71

Finance receivables collectively evaluated for impairment

June 30, 2025 (2)

September 30, 2025 (2)(3)

$ 644 $ 143 $ 807 $ 15 $ 1,609

June 30, 2024 (2)

September 30, 2024 (3)

$ 815 $ 238 $ 1,007 $ — $ 2,060

1 unchanged sentence

(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 $ 55 and $ 79 at June 30, 2025 and 2024, respectively.

(2) As a result of the Lexmark Acquisition on July 1, 2025, Other includes amounts for Latin America, Asia Pacific and South Africa.

Allowance for doubtful credit losses in Other for the three months ended September 30, 2025 were nil.

(3) Total Finance receivables exclude the allowance for credit losses of $ 53 and $ 71 at September 30, 2025 and 2024, respectively.

Customers are further evaluated by class based on the type of lease origination.

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These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance.

Loss rates in this category in the normal course are generally less than 1 %.

Loss rates in this category in the normal course are generally in the range of 1 % to 2 %.

• Average Credit Risk:

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Loss rates in this category in the normal course are generally in the range of 3 % to 5 %.

Xerox 2025 Form 10-Q 26

• High Credit Risk:

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Credit quality indicators are updated at least annually, or more frequently to the extent required by economic conditions, and the credit quality of any given customer can change during the life of the portfolio.

Xerox 2025 Form 10-Q 22

Details about our finance receivables portfolio based on geography, origination year and credit quality indicators are as follows:

June 30, 2025

September 30, 2025

2025 2024 2023 2022 2021 Prior Total

21 unchanged sentences

Charge-offs $ 4 $ 1 $ 6 $ 4 $ 1 $ — $ 16

Investment Grade $ 2 $ 2 $ 1 $ — $ — $ — $ 5

Non-Investment Grade 2 3 2 1 — — 8

Substandard — — 1 1 — — 2

Total $ 4 $ 5 $ 4 $ 2 $ — $ — $ 15

Charge-offs $ — $ — $ — $ — $ — $ — $ —

Total Finance Receivables

4 unchanged sentences

Total Charge-offs $ 4 $ 3 $ 10 $ 9 $ 3 $ 2 $ 31

_____________

(1) As a result of the Lexmark Acquisition on July 1, 2025 , includes amounts for Latin America, Asia Pacific and South Africa.

Xerox 2025 Form 10-Q 27

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Total Charge-offs $ 2 $ 23 $ 11 $ 8 $ 5 $ 7 $ 56

Xerox 2025 Form 10-Q 24

The aging of our receivables portfolio is based upon the number of days an invoice is past due.

4 unchanged sentences

However, interest revenue for such billings is only recognized if collectability is deemed probable.

Xerox 2025 Form 10-Q 28

The aging of our billed finance receivables is as follows:

June 30, 2025

September 30, 2025

Current 31-90

5 unchanged sentences

EMEA 8 2 2 12 795 807 21

— — — — 15 15 —

Total $ 37 $ 10 $ 9 $ 56 $ 1,553 $ 1,609 $ 58

8 unchanged sentences

Total $ 35 $ 8 $ 7 $ 50 $ 1,752 $ 1,802 $ 55

Sales of Receivables

The Company has 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.

_____________

(1) As a result of the Lexmark Acquisition on July 1, 2025 , includes amounts for Latin America, Asia Pacific and South Africa.

Sales of Finance Receivables

The Company has a finance receivables funding agreement with various affiliates:

PEAC Solutions (PEAC)

The Company has an agreement with PEAC, (formerly owned by HPS Investment Partners) pursuant to which the Company agreed to offer for sale, and PEAC agreed to purchase, certain eligible pools of finance receivables, on a monthly basis, in transactions structured as "true sales at law," and bankruptcy remote transfers.

We have received an opinion to that effect from outside legal counsel.

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

In addition, the agreement provides for the sale of the underlying leased equipment to HPS, with the commission paid by HPS covering the value associated with the underlying equipment being sold to HPS.

The Company retains the first right of refusal to repurchase the underlying equipment at the end of the lease term, to the extent offered for sale by HPS, at its then fair value.

In addition, HPS is responsible for servicing the majority of Xerox's customers' funding activity.

HPS pays a specified fee to Xerox for those lease receivables that Xerox continues to service on HPS's behalf.

The Company also has a finance receivables funding agreement with De Lage Landen Financial Services Canada Inc.

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

In addition, the agreement provides for the sale of the underlying leased equipment to PEAC, with the commission paid by PEAC covering the value associated with the underlying equipment being sold to PEAC.

The Company retains the first right of refusal to repurchase the underlying equipment at the end of the lease term, to the extent offered for sale by PEAC, at its then fair value.

In addition, PEAC is responsible for servicing the majority of Xerox's customers' funding activity.

PEAC pays a specified fee to Xerox for those lease receivables that Xerox continues to service on PEAC's behalf.

De Lage Landen Financial Services Canada and France

The Company has a finance receivables funding agreement with De Lage Landen Financial Services Canada Inc.

(DLL Canada), pursuant to which the Company can offer for sale, and DLL Canada may purchase on a non-recourse basis, 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.

1 unchanged sentence

(DLL France), pursuant to which the Company can offer for sale, and DLL France may purchase on a non-recourse basis, 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.

Xerox 2025 Form 10-Q 25

Both DLL finance receivables funding agreements have initial terms of five years , with automatic one-year extensions thereafter, unless terminated by either the Company or DLL Canada or DLL France.

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.

Xerox 2025 Form 10-Q 29

LCM Capital LLP

In September 2025, the Company entered into a finance receivables funding agreement with Asset Link Capital (No.

10) Limited (as the purchaser and affiliate of LCM Capital LLP (LCM)), pursuant to which the Company can offer for sale, and LCM 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.

Master Sale and Purchase Agreement, effective September 2025, has a term of three years , unless terminated by either LCM or Xerox.

Xerox will be paid for certain sold leases and their related receivables and equipment and will continue to service the lease receivables under a separate Asset Management Agreement, which was effective September 2025, and receive an agreed upon asset management fee annually for such services.

During the third quarter of 2025, the Company sold approximately $ 75 (GBP 56 million) in principal balances of lease receivables under this finance receivables funding agreement.

Finance receivable sales activity was as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

10 unchanged sentences

The following is a summary of Inventories by major category:

September 30,

2025 December 31,

6 unchanged sentences

Equipment on operating leases and the related accumulated depreciation are as follows:

September 30,

2025 December 31,

2 unchanged sentences

Equipment on operating leases, net $ 300 $ 245

Total contingent rentals on operating leases, consisting principally of usage charges in excess of minimum contracted amounts, were $ 10 and $ 10 for the three months ended June 30, 2025 and 2024, respectively, and $ 19 and $ 23 for the six months ended June 30, 2025 and 2024

Total contingent rentals on operating leases, consisting principally of usage charges in excess of minimum contracted amounts, were $ 7 and $ 9 for the three months ended September 30, 2025 and 2024, respectively, and $ 26 and $ 32 for the nine months ended September 30, 2025 and 2024.

Xerox 2025 Form 10-Q 30

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Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations.

Our leases have remaining terms of up to ten years and a variety of renewal and/or termination options.

Our leases have remaining terms of up to thirty-three years and a variety of renewal and/or termination options.

The components of lease expense are as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

6 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.

As of June 30, 2025, we had no material operating leases that had not yet commenced.

As of September 30, 2025, we had no material operating leases that had not yet commenced.

Operating lease ROU assets, net and operating lease liabilities were reported in the Condensed Consolidated Balance Sheets as follows:

September 30,

2025 December 31,

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Finance lease ROU assets, net and operating lease liabilities were reported in the Condensed Consolidated Balance Sheets as follows:

September 30,

2025 December 31,

8 unchanged sentences

Note 11 – Restructuring Programs

In connection with our Reinvention and other transformation programs, we engage in restructuring actions in order to reduce our cost structure and realign it to the changing nature of our business.

As part of our efforts to reduce costs, our restructuring actions may also include the off-shoring and/or outsourcing of certain operations, services and other functions, exit from certain product lines and geographies, as well as reducing our real estate footprint.

In connection with our Reinvention we engage in restructuring actions in order to reduce our cost structure and realign it to the changing nature of our business.

Additionally, as a result of the Lexmark Acquisition, we have begun efforts to integrate and consolidate certain operations of the legacy Xerox and Lexmark businesses.

As part of our efforts to reduce costs and integrate our operations, our restructuring actions may also include the off-shoring and/or outsourcing of certain operations, services and other functions, exit from certain product lines and geographies, as well as reducing our real estate footprint.

Refer to Note 6 - Acquisition for additional information related to the Lexmark Acquisition.

Restructuring and related costs, net reflect the following components:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

1 unchanged sentence

Asset impairment charges, net (1)

( 6 ) — ( 10 ) 24

Related costs, net — 10 ( 1 ) 27

Total Restructuring and related costs, net $ 59 $ 56 $ 68 $ 107

_____________ _

(1) Impairments are net of cash receipts.

Restructuring Charges, Net

Restructuring charges, net primarily relate to the Print and Other segment.

Restructuring charges, net primarily relate to the Print and Other segment for all restructuring programs.

A summary of our restructuring program activity is as follows:

13 unchanged sentences

Balance at June 30, 2025 $ 91 $ 5 $ 96

Restructuring provision (3)

Reversals of prior charges ( 18 ) — ( 18 )

Net current period charges (1)

Charges against reserve and currency ( 8 ) — ( 8 )

Balance at September 30, 2025 $ 148 $ 5 $ 153

_____________ _

(1) Represents net amount recognized within the Condensed Consolidated Statements of (Loss) Income for the period shown for restructuring charges.

(1) Represents net amount recognized within the Condensed Consolidated Statements of Loss for the period shown for restructuring charges.

Reversals of prior charges primarily include net changes in estimated reserves from initiatives accrued for in prior periods, including Reinvention.

1 unchanged sentence

We expect that the majority of these costs will be paid upon the exercise of an early termination clause in 2027 .

At June 30, 2025, we expect to pay $ 64 of the restructuring reserve over the next twelve months.

(3) Severance and related costs for the three and nine months ended September 30, 2025, include approximately $ 77 for worldwide headcount reductions as a result of our efforts to integrate and consolidate certain operations of the legacy Xerox and Lexmark businesses.

At September 30, 2025, we expect to pay $ 92 of the restructuring reserve over the next twelve months.

The following table summarizes the reconciliation to the Condensed Consolidated Statements of Cash Flows:

Six Months Ended

Nine Months Ended

September 30,

Restructuring cash payments $ ( 41 ) $ ( 58 )

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Impairments are net of any potential sublease income or other recovery amounts.

Asset impairment charges incurred during the first quarter 2025 related to the impairment of an operating lease ROU asset, which was exited during the quarter, as well as the sale of a facility.

Both the impairment and the sale are associated with strategic actions taken as a result of the Company's Reinvention.

Asset impairment charges incurred during 2025 related to the impairment of an operating lease ROU asset, as well as the sales of facilities.

Both the impairment and the sales are associated with strategic actions taken as a result of the Company's Reinvention.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

4 unchanged sentences

Adjustments/Reversals 10 ( 1 ) 10 ( 3 )

Proceeds from the sale of owned assets (2)

Proceeds from the sales of owned assets (2)

( 16 ) — ( 35 ) —

Net asset impairment (credit) charge $ ( 6 ) $ — $ ( 10 ) $ 24

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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(2) Represents professional support services associated with our business transformation initiatives.

Cash paid for restructuring related costs were $ 0 and $ 19 for the six months ended June 30, 2025 and 2024, respectively.

The restructuring related costs reserve was $ 4 and $ 4 at June 30, 2025 and December 31, 2024, respectively.

The balance at June 30, 2025 is expected to be paid over the next twelve months.

Cash paid for restructuring related costs were $( 1 ) and $ 29 for the nine months ended September 30, 2025 and 2024, respectively.

The restructuring related costs reserve was $ 4 and $ 4 at September 30, 2025 and December 31, 2024, respectively.

The balance at September 30, 2025 is expected to be paid over the next twelve months.

Xerox 2025 Form 10-Q 33

1 unchanged sentence

Cash, Cash Equivalents and Restricted Cash

Restricted cash primarily relates to proceeds from Second Lien Notes deposited into an escrow account for the benefit of the holders of the Second Lien Notes and escrow cash deposits made in Brazil associated with ongoing litigation.

Restricted cash primarily relates to escrow cash deposits made in Brazil associated with ongoing litigation.

As more fully discussed in Note 21 - Contingencies and Litigation, various litigation matters in Brazil require us to make cash deposits to escrow as a condition of the continuing litigation.

1 unchanged sentence

Cash, cash equivalents and restricted cash amounts are as follows:

September 30,

2025 December 31,

1 unchanged sentence

Restricted cash

Debt proceeds held in escrow 492 —

Litigation deposits in Brazil 24 20

4 unchanged sentences

Restricted cash is reported in the Condensed Consolidated Balance Sheets as follows:

September 30,

2025 December 31,

4 unchanged sentences

Summarized cash flow information is as follows:

Location in Statement of Cash Flows Six Months Ended

Location in Statement of Cash Flows Nine Months Ended

September 30,

Source/(Use) 2025 2024

Provision for receivables (1)

Operating $ 27 $ 24

Provision for receivables Operating $ 36 $ 36

Provision for inventory Operating 31 56

13 unchanged sentences

Repurchases related to stock-based compensation - Xerox Holdings Financing ( 6 ) ( 10 )

Proceeds from issuance of warrants Financing 11 —

Commitment fees Financing ( 22 ) —

1 unchanged sentence

_____________

(1) Provision for receivables includes adjustments for customer accommodations and contract terminations of $ 2 and $ 0 for the three months ended June 30, 2025 and 2024, respectively and $ 3 and ( 1 ) for the six months ended June 30, 2025 and 2024, respectively.

(1) Amortization of patents is reported in Decrease in other current and long-term assets in the Condensed Consolidated Statements of Cash Flows.

17 unchanged sentences

Balance at June 30th $ 20 $ 25

Amounts invoiced $ 21 $ 25

Invoices paid $ ( 22 ) $ ( 30 )

Balance at September 30th $ 19 $ 20

Note 13 – Debt

5 unchanged sentences

Also on May 9, 2025, $ 95 of the net proceeds (after discount) were deposited into the escrow account, as well as $ 1 of accrued and unpaid interest, and a deposit of $ 2 by Xerox Corporation.

On July 1, 2025, approximately $ 494 was released from escrow (including accrued interest) to fund a portion of the Lexmark Acquisition (defined below).

On July 1, 2025, approximately $ 494 was released from escrow (including accrued interest) to fund a portion of the Lexmark Acquisition.

An additional $ 15 of commitment and underwriting fees were paid upon the release of the proceeds from escrow.

Net proceeds from the offering of the First Lien Notes, together with cash on hand, will be used to redeem Xerox Holdings Corporation’s 5.000 % Senior Notes due 2025 (2025 Notes) and to pay fees and expenses, including redemption premiums and accrued interest, in connection with the First Lien Notes offering, the Lexmark Acquisition and the related transactions.

Xerox Corporation redeemed an aggregate principal amount of $ 90 of the 2025 Notes on April 11, 2025, with the balance to be redeemed on or prior to maturity.

Net proceeds from the offering of the First Lien Notes, together with cash on hand, were used to redeem Xerox Holdings Corporation’s 5.000 % Senior Notes due 2025 (2025 Notes) and to pay fees and expenses, including redemption premiums and accrued interest, in connection with the First Lien Notes offering, the Lexmark Acquisition and the related transactions, Xerox Corporation redeemed an aggregate principal amount of $ 90 of the 2025 Notes on April 11, 2025, with the balance redeemed at maturity in August 2025.

On April 11, 2025, Xerox Corporation also repaid $ 95 aggregate principal amount of borrowings under Xerox Corporation’s first lien senior secured term loan credit facility (the TLB Facility) with a portion of the proceeds of the First Lien Notes.

Xerox Corporation used the net proceeds from the offering of the Second Lien Notes to (i) fund a portion of the purchase price for the Lexmark Acquisition and the repayment of a portion of Lexmark’s outstanding debt (together with accrued interest and any applicable expenses, fees or premiums) and (ii) pay fees and expenses in connection with the Second Lien Notes offering, the Lexmark Acquisition and the related transactions.

The First Lien Notes are governed by an indenture, dated as of April 11, 2025 (the First Lien Indenture), among Xerox Corporation, Xerox Holdings Corporation (Xerox Holdings Corporation and, together with Xerox Corporation, the Company), certain of Xerox Corporation’s domestic and foreign subsidiaries and U.S.

Bank Trust Company,

Xerox 2025 Form 10-Q 35

National Association, as trustee and collateral agent.

Bank Trust Company, National Association, as trustee and collateral agent.

The Second Lien Notes are governed by an indenture, dated as of April 11, 2025 (the Second Lien Indenture and, together with the First Lien Indenture, the Indentures), between the Escrow Issuer and U.S.

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The gross proceeds of the Second Lien Notes were initially deposited into an escrow account for the benefit of the holders of the Second Lien Notes.

As of June 30, 2025, we classified the Second Lien Notes as Long-term debt on the balance sheet.

Proceeds from the Second Lien Notes were held in escrow and the Notes were subject to a special mandatory redemption provision in the event the Lexmark Acquisition did not close by December 22, 2025.

The Company had the option to extend the special mandatory redemption date to September 22, 2026, in accordance with the terms of the indenture.

The Lexmark Acquisition closed on July 1, 2025, and as a result, the Notes are no longer subject to the special mandatory redemption provision.

Proceeds from the Second Lien Notes were held in escrow.

Upon the consummation of the Lexmark Acquisition, the escrowed proceeds were released (the Escrow Release) from the escrow account and the Escrow Issuer was merged with and into Xerox Corporation.

Upon the Escrow Release, Xerox Corporation, Xerox Holdings Corporation and certain of Xerox Corporation’s domestic and foreign subsidiaries that guarantee the First Lien Notes entered into a supplemental indenture to the Second Lien Indenture to provide for the assumption by Xerox Corporation of the obligations of the Escrow Issuer as issuer of the Second Lien Notes and for the guarantees of the Second Lien Notes by Xerox Holdings Corporation and such subsidiaries (the Assumption).

Following the Escrow Release and the Assumption, the Second Lien Notes, subject to certain exceptions and permitted liens, are secured on a second-priority basis by the Xerox Collateral that is Fixed Asset Collateral and on a third-priority basis by the Xerox Collateral that is Current Asset Collateral.

Within 90 business days following the completion of the Lexmark Acquisition, subject to certain agreed security principles, the Notes will be jointly and severally guaranteed on a senior secured basis by Lexmark and certain of its subsidiaries that become guarantors under the TLB Facility.

Subject to certain exceptions and permitted liens, the Notes will be further secured by security interests in substantially all of the assets of Lexmark and certain of its subsidiaries that will secure the TLB Facility (the Lexmark Collateral) on a first-priority basis, in respect of the First Lien Notes, and on a second-priority basis, in respect of the Second Lien Notes, by the Lexmark Collateral that is Fixed Asset Collateral and on a second-priority basis, in respect of the First Lien Notes, and on a third-priority basis, in respect of the Second Lien Notes by the Lexmark Collateral that is Current Asset Collateral.

The Second Lien Notes, subject to certain exceptions and permitted liens, are secured on a second priority basis by the Xerox Collateral that is Fixed Asset Collateral and on a third-priority basis by the Xerox Collateral that is Current Asset Collateral.

Following the completion of the Lexmark Acquisition, subject to certain agreed security principles, the Notes are jointly and severally guaranteed on a senior secured basis by Lexmark and certain of its subsidiaries that become guarantors under the TLB Facility.

Subject to certain exceptions and permitted liens, the Notes are further secured by security interests in substantially all of the assets of Lexmark and certain of its subsidiaries that secure the TLB Facility (the Lexmark Collateral) on a first-priority basis, in respect of the First Lien Notes, and on a second-priority basis, in respect of the Second Lien Notes, by the Lexmark Collateral that is Fixed Asset Collateral and on a second-priority basis, in respect of the First Lien Notes, and on a third-priority basis, in respect of the Second Lien Notes by the Lexmark Collateral that is Current Asset Collateral.

At any time and from time to time prior to October 15, 2027, some or all of the First Lien Notes are redeemable for cash at a redemption price equal to 100 % of their principal amount, plus the applicable “make-whole” premium described in the First Lien Indenture and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

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Beginning on April 15, 2028, some or all of the Second Lien Notes are redeemable at any time and from time to time at the applicable redemption prices listed in the Second Lien Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

In addition, at any time and from time to

In addition, at any time and from time to time prior to April 15, 2028, up to 40 % of the aggregate principal amount of the Second Lien Notes are redeemable with funds from one or more equity offerings at a redemption price equal to 113.500 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

In addition, prior

Xerox 2025 Form 10-Q 36

time prior to April 15, 2028, up to 40 % of the aggregate principal amount of the Second Lien Notes are redeemable with funds from one or more equity offerings at a redemption price equal to 113.500 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

In addition, prior to April 15, 2028, during each 12-month period commencing with the issue date of the Second Lien Notes, up to 10 % of the aggregate principal amount of the Second Lien Notes outstanding are redeemable at a redemption price equal to 103 % of the principal amount of the Second Lien Notes redeemed plus accrued and unpaid interest.

to April 15, 2028, during each 12-month period commencing with the issue date of the Second Lien Notes, up to 10 % of the aggregate principal amount of the Second Lien Notes outstanding are redeemable at a redemption price equal to 103 % of the principal amount of the Second Lien Notes redeemed plus accrued and unpaid interest.

If Xerox Corporation experiences a Change of Control Triggering Event (as defined in the Indentures), Xerox Corporation will be required to offer to repurchase the First Lien Notes and the Second Lien Notes, at 101 % of the principal amount of such Notes, respectively, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

3 unchanged sentences

The Indentures provide for customary events of default which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest, breach of other agreements in respect of the Notes, failure to pay certain other indebtedness, failure to pay certain final judgments, failure of certain guarantees to be enforceable and certain events of bankruptcy or insolvency.

For additional information regarding the Debt and the Lexmark Acquisition, please refer to Note 21 - Subsequent Events.

On July 1, 2025, Xerox Corporation made an incremental term loan borrowing of approximately $ 327 (Incremental Term Loans) under its TLB Facility.

Substantially all of the net proceeds of the Incremental Term Loans were used to repay (through a cashless settlement) a portion of Lexmark’s assumed debt of $ 323 .

Debt issuance costs of approximately $ 1 were paid and deferred in connection with the issuance of the Incremental Term Loans, and will be amortized over the remaining term.

As a result of the sales of finance receivables in the third quarter 2025, approximately $ 41 of the TLB Facility was repaid in October 2025.

Refer to Note 8 - Finance Receivables, Net for additional information regarding our sales of finance receivables.

On July 1, 2025, Xerox Holdings completed its offering of (i) $ 250 aggregate principal amount of 13.00 % Senior Notes due July 2030 (the 2030 Notes) issued by Xerox Holdings and (ii) $ 125 aggregate principal amount of 13.00 % Senior Unsecured Notes due June 2026 (the 2026 Notes) issued by Xerox Holdings.

We received net proceeds (after discount, fees and expenses) on the issuance of the 2030 Notes of approximately $ 245 , and net proceeds on the 2026 Notes of approximately $ 116 .

The 2030 Notes included associated pre-funded warrant with a fair value of approximately $ 11 .

The 2026 Notes provide the option for Xerox (at its sole discretion) to extend the maturity of approximately $ 62.5 of the 2026 Notes for an additional six-month period (for a 2 % fee on the amount of notes outstanding after the payment on the scheduled maturity date).

During the extension period, the 2026 Notes will continue to bear interest at 13.00 % per annum.

Refer to Note 17 - Shareholders' Equity of Xerox Holdings Corporation for additional information regarding the issuance of the pre-funded warrant.

Xerox used the net proceeds of the 2030 Notes to fund a portion of the purchase price for the Lexmark Acquisition and to repay a portion of Lexmark’s outstanding debt (together with accrued interest and any applicable expenses, fees or premiums) and to pay fees and expenses in connection with the Lexmark Acquisition.

The net proceeds of the 2026 Notes are being used for general corporate purposes including, without limitation, funding the realization of synergies associated with the Lexmark Acquisition.

The 2030 Notes are governed by an Indenture, dated as of July 1, 2025 (the 2030 Notes Indenture), among Xerox, certain of Xerox's domestic subsidiaries and U.S.

Bank Trust Company, National Association, as trustee.

The 2030 Notes are payable quarterly in arrears on April 1, July 1, October 1 and January 1 of each year, beginning on October 1, 2025.

The Initial Interest Rate on the 2030 Notes will increase (Interest Rate Step-Up) to the rates (on a per annum basis) set forth below for the period from and including the dates indicated below (each a Step-Up Date) to but excluding the next succeeding Step-up Date, or the stated maturity of the 2030 Notes, as applicable.

The 2030 Notes are unconditionally guaranteed on an unsecured basis by Xerox and certain of Xerox’s domestic subsidiaries, with certain of Xerox’s foreign subsidiaries to provide guarantees on a post-closing basis.

Xerox 2025 Form 10-Q 37

Step-Up Date Interest Rate Step-Up

July 1, 2026 13.500 %

July 1, 2027 14.000 %

October 1, 2027 14.125 %

January 1, 2028 14.250 %

April 1, 2028 14.500 %

July 1, 2028 14.750 %

October 1, 2028 15.000 %

January 1, 2029 15.250 %

April 1, 2029 15.500 %

July 1, 2029 15.750 %

October 1, 2029 16.000 %

January 1, 2030 16.250 %

April 1, 2030 16.500 %

July 1, 2030 16.750 %

The 2026 Notes initially bear interest at a rate of 13.00 % per annum, payable quarterly in arrears on April 1, July 1, October 1 and January 1 of each year, beginning on October 1, 2025.

The 2026 Notes are governed by an indenture, dated as of July 1, 2025 (the 2026 Notes Indenture), among Xerox, certain of Xerox’s domestic subsidiaries and U.S.

Bank Trust Company, National Association, as trustee.

Additionally, the 2026 Notes are unconditionally guaranteed on an unsecured basis by Xerox Corporation and certain of Xerox’s domestic subsidiaries, with certain of Xerox’s foreign subsidiaries to provide guarantees on a post-closing basis.

In October 2025, Xerox completed the addition of the Lexmark Guarantors to the Notes, the 2030 Notes, the 2026 Notes, the 3.75 % Convertible Senior Notes due 2030, and the 8.875 % Senior Notes due 2029.

Refer to the Debt section of Note 6 - Acquisition, for additional information regarding the Lexmark Acquisition and the TLB.

In connection with the issuance of the 2030 3.75 % Convertible Senior Notes in 2024 (the 2030 Convertible Notes), the Company entered into privately negotiated capped call transactions (the Capped Calls) with certain of the initial purchasers of the 2030 Convertible Notes or their respective affiliates (the option counterparties) at a cost of approximately $ 23 .

1 unchanged sentence

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 Convertible Notes is settled in cash, to reduce our cash payment obligation) in the event that at the time of conversion of the 2030 Convertible Notes the trading price of our common stock price exceeds the conversion price of the 2030 Convertible Notes.

The initial cap sale price of the Capped Calls was approximately $ 28.34 per share, which represents a premium of 70 % over the last reported sale price of our common stock of $ 16.67 on the NASDAQ Stock Exchange on March 6, 2024, and is subject to certain adjustments under the terms of the Capped Calls.

The initial cap 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.

Under the terms of the Capped Call, a dividend payment below the Company’s $ 1.00 annual dividend at the time of the purchase of the Capped Call could result in an adjustment to the cap price.

This adjustment is intended to preserve the original economics of the Capped Call and is permissible under ASC 815-40, and therefore, the Capped Call continues to meet the conditions for equity classification.

The current Capped Call Price was reduced to $ 27.51 per share as a result of the reduction of our annual dividend from $ 1.00 to $ .50 in the first quarter of 2025.

In the second quarter of 2025, the annual dividend was reduced to $ .10 per share, and we are in discussions with the Capped Call counterparties to finalize the adjustment.

The Capped Call cap price was reduced to $ 27.51 per share as a result of the reduction of our annual dividend from $ 1.00 to $ .50 in the first quarter of 2025.

In the second quarter of 2025, the annual dividend was reduced to $ .10 per share.

The current Capped Call cap price was reduced to $ 20.84 per share, which is the same as the conversion price of the 2030 Convertible Notes, as a result of the reduction of our annual dividend to $ .025 per share during the quarter.

Revolving Credit Facility

2 unchanged sentences

The ABL Facility has commitments from the lenders of $ 425 .

At June 30, 2025, the available borrowing base was approximately $ 260 , reflecting no borrowings under the ABL

Xerox 2025 Form 10-Q 38

Facility, and approximately $ 63 of letters of credit that were issued under the facility.

During the six months ended June 30, 2025, the maximum amount outstanding under the ABL Facility was $ 53 .

As of November 7, 2025 and based on our October availability calculation, we have availability of $ 392 before current borrowings of approximately $ 150 and letters of credit issued under the ABL Facility of approximately $ 63 .

Accordingly, our net availability is approximately $ 179 .

Certain debt covenants limit our total amount of secured debt outstanding.

As of the date of our filing, our capacity under the ABL was not limited by any debt covenants.

Our capacity to borrow under the ABL Facility may be adversely impacted by the terms of the ABL Facility and certain other agreements that govern our indebtedness.

Xerox Holdings Corporation/Xerox Corporation Intercompany Loan

At June 30, 2025 and December 31, 2024, the balance of the Xerox Holdings Corporation Intercompany Loan reported in Xerox Corporation’s Condensed Consolidated Balance Sheet was $ 1,934 and $ 2,022 , respectively, which is net of related debt issuance costs, and the intercompany interest payable was $ 29 and $ 31 , respectively.

At September 30, 2025 and December 31, 2024, the balance of the Xerox Holdings Corporation Intercompany Loan reported in Xerox Corporation’s Condensed Consolidated Balance Sheet was $ 1,989 and $ 2,022 , respectively, which is net of related debt issuance costs, and the intercompany interest payable was $ 33 and $ 31 , respectively.

Secured Borrowings and Collateral

2 unchanged sentences

During the first quarter 2025, the outstanding balance of $ 70 was repaid.

Accordingly, there are no borrowings secured by finance receivables that are outstanding as of June 30, 2025.

Accordingly, there are no borrowings secured by finance receivables that are outstanding as of September 30, 2025.

Interest Expense and Income

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

8 unchanged sentences

(1) Equipment financing interest, which is included in Cost of services, maintenance, rentals and other, and non-financing interest expense, which is included in Other expenses, net, in the Condensed Consolidated Statements of Loss.

(2) Interest expense of Xerox Corporation included intercompany interest expense associated with the Xerox Holdings Corporation / Xerox Corporation Intercompany Loan of $ 29 and $ 29 for the three months ended June 30, 2025 and 2024, respectively and $ 59 and $ 51 for the

six months ended June 30, 2025 and 2024, respectively.

(2) Interest expense of Xerox Corporation included intercompany interest expense associated with the Xerox Holdings Corporation / Xerox Corporation Intercompany Loan of $ 39 and $ 30 for the three months ended September 30, 2025 and 2024, respectively and $ 98 and $ 81 for the nine months ended September 30, 2025 and 2024, respectively.

(3) Financing income, which is included in Services, maintenance, rentals and other, and other interest income, which is included in Other expenses, net, in the Condensed Consolidated Statements of Loss.

3 unchanged sentences

These derivatives may be designated as fair value hedges or cash flow hedges or non-designated hedges depending on the nature of the risk being hedged.

We had no fair value hedges for the three and six months ended June 30, 2025 and 2024, respectively.

We had no fair value hedges for the three and nine months ended September 30, 2025 and 2024, respectively.

Cash Flow Hedges

We use interest rate swaps and caps to manage the exposure to variability in the interest rate payments on our finance receivable secured loan borrowings.

The interest rate swaps convert the interest paid on certain loans to a fixed amount while the caps limit the maximum amount of interest paid.

In September 2024, we entered into two floating-to-fixed interest rate swaps to hedge against interest rate volatility associated with our Term Loan B Credit Agreement (TLB), which had an outstanding principal balance of $ 421 as of June 30, 2025.

The following is a summary of our swaps at June 30, 2025:

Counterparty Derivative Type Principal Debt

Notional Amount

Expected Maturity Fixed Rate Paid

Floating Rate Received

Net Fair Value

Mizuho Swap $ 175 $ 175 2027 3.271 % 4.299 % $ 1

Credit Agricole Swap 125 125 2027 3.276 % 4.299 % —

Total $ 300 $ 300 $ 1

The remaining portion of the TLB of $ 121 is not hedged, and is subject to interest rate fluctuations.

The impact of these interest rate swaps on interest expense was a net reduction of $ 1 for the three months ended June 30, 2025.

During the third quarter 2025, the Company voluntarily de-designated certain interest rate swaps with a notional value of $ 300 , which were previously accounted for as cash flow hedges of variable-rate debt.

The de-designation was made because the Company may, from time to time, prepay portions of the underlying debt, resulting in forecasted interest payments that are no longer considered highly probable.

Following the de-designation, the swaps continue to be carried at fair value on the balance sheet.

Changes in fair value are recognized in earnings in interest expense were not material during the third quarter 2025.

The amount previously recorded in accumulated other comprehensive loss related to the hedged cash flows was immaterial and was reclassified to earnings in the third quarter 2025 .

Xerox 2025 Form 10-Q 39

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• Forecasted purchases and sales in foreign currency

At June 30, 2025 and December 31, 2024, we had outstanding forward exchange and purchased option contracts with gross notional values of $ 1,116 and $ 1,410 respectively, with terms of less than 12 months.

At September 30, 2025 and December 31, 2024, we had outstanding forward exchange and purchased option contracts with gross notional values of $ 1,361 and $ 1,410 respectively, with terms of less than 12 months.

The decrease in the notional value is due to a reduction in foreign currency denominated intercompany balances.

At June 30, 2025, approximately 94 % of the contracts mature within three months, 3 % mature in three to six months and 3 % in six to twelve months.

At September 30, 2025, approximately 94 % of the contracts mature within three months, 3 % mature in three to six months and 3 % in six to twelve months.

Foreign Currency Cash Flow Hedges

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All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

The amount of ineffectiveness recorded in the Condensed Consolidated Statements of Loss for these designated cash flow hedges was not material for the six months ended June 30, 2025 and 2024, respectively.

The net liability fair value of these contracts was $ 5 and $ 1 as of June 30, 2025 and December 31, 2024, respectively.

The amount of ineffectiveness recorded in the Condensed Consolidated Statements of Loss for these designated cash flow hedges was not material for the nine months ended September 30, 2025 and 2024, respectively.

The net liability fair value of these contracts was $ 4 and $ 1 as of September 30, 2025 and December 31, 2024, respectively.

Summary of Derivative Instruments Gains (Losses)

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

7 unchanged sentences

Total $ — $ ( 1 ) $ ( 1 ) $ ( 8 )

At June 30, 2025, there was no net after-tax gain recorded in Accumulated other comprehensive loss associated with our cash flow hedging activity.

At September 30, 2025, a net after tax loss of $ 2 recorded in Accumulated other comprehensive loss associated with our cash flow hedging activity.

Credit Support Annex

The Company may enter into derivative contracts with derivative counterparties that contain a provision to post collateral to the counterparties when these contracts are in a net liability position.

At June 30, 2025, the Company had no collateral posted due to this provision.

At September 30, 2025, the Company had no collateral posted due to this provision.

Non-Designated Derivative Instruments Gains (Losses)

1 unchanged sentence

They are not designated as hedges since there is a natural offset for the remeasurement of the underlying foreign currency-denominated asset or liability.

The net liability fair value of these contracts was $ 0 and $ 2 as of June 30, 2025 and December 31, 2024, respectively.

The net liability fair value of these contracts was $ 5 and $ 2 as of September 30, 2025 and December 31, 2024, respectively.

Xerox 2025 Form 10-Q 40

1 unchanged sentence

Derivatives NOT Designated as Hedging Instruments Location of Derivative Gain (Loss) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Foreign exchange contracts – forwards Other expenses, net – Currency gains (losses), net $ 3 $ ( 1 ) $ 12 $ ( 15 )

Currency losses, net were $ 1 and $ 2 for the three months ended June 30, 2025 and 2024, respectively, and $ 1 and $ 13 for six months ended June 30, 2025 and 2024, respectively.

Currency losses, net were $ 5 and $ 2 for the three months ended September 30, 2025 and 2024, respectively, and $ 6 and $ 15 for nine months ended September 30, 2025 and 2024, 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.

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The basis for the measurement at fair value in all cases is Level 2 – Significant Other Observable Inputs.

September 30,

2025 December 31,

11 unchanged sentences

The estimated fair values of our other financial assets and liabilities were as follows:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Cash and cash equivalents $ 479 $ 479 $ 576 $ 576

14 unchanged sentences

Note 16 – Employee Benefit Plans

As a result of the Lexmark Acquisition, the Company assumed approximately 15 benefit plans, and have included their impacts below from July 1, 2025, the date of the Lexmark Acquisition.

Refer to Note 6 - Acquisition for additional information regarding the Lexmark Acquisition.

The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows:

Three Months Ended June 30,

Three Months Ended September 30,

Pension Benefits

5 unchanged sentences

Interest cost (1)

33 27 51 46 2 2

Expected return on plan assets (1)

( 26 ) ( 23 ) ( 54 ) ( 49 ) — —

Recognized net actuarial loss (gain) (1)

6 4 13 16 ( 3 ) ( 3 )

Amortization of prior service cost (credit) (1)

— — 2 2 ( 4 ) ( 4 )

Recognized settlement loss (1)

2 unchanged sentences

Net Periodic Benefit Cost (Credit) 15 19 21 23 ( 5 ) ( 5 )

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss):

Net actuarial (loss) gain (1)

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income:

Net actuarial (loss) (2)

— ( 15 ) — — — —

1 unchanged sentence

Amortization of net prior service (cost) credit — — ( 2 ) ( 2 ) 4 4

Total Recognized in Other Comprehensive Income (Loss) (2)

Total Recognized in Other Comprehensive (Loss) Income (3)

( 6 ) ( 26 ) ( 15 ) ( 17 ) 7 7

Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive Income (Loss) $ 3 $ 24 $ 2 $ 4 $ 2 $ 1

Six Months Ended June 30,

Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive (Loss) Income $ 9 $ ( 7 ) $ 6 $ 6 $ 2 $ 2

Nine Months Ended September 30,

Pension Benefits

5 unchanged sentences

Interest cost (1)

90 82 146 136 6 6

Expected return on plan assets (1)

( 70 ) ( 69 ) ( 156 ) ( 145 ) — —

Recognized net actuarial loss (gain) (1)

15 14 40 47 ( 9 ) ( 9 )

Amortization of prior service cost (credit) (1)

— — 6 6 ( 10 ) ( 11 )

Recognized settlement loss (1)

2 unchanged sentences

Net Periodic Benefit Cost (Credit) 37 56 57 65 ( 13 ) ( 14 )

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss):

Net actuarial (loss) gain (1)

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income :

Net actuarial (loss) (2)

( 1 ) ( 9 ) — — — ( 1 )

1 unchanged sentence

Amortization of prior service (cost) credit — — ( 6 ) ( 6 ) 10 11

Total Recognized in Other Comprehensive Income (Loss) (2)

Total Recognized in Other Comprehensive (Loss) Income (3)

( 16 ) ( 40 ) ( 46 ) ( 52 ) 19 19

Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive Income (Loss) $ 12 $ 23 $ 5 $ 7 $ 4 $ 3

Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive (Loss) Income $ 21 $ 16 $ 11 $ 13 $ 6 $ 5

_____________

(1) The net actuarial (loss) gain for U.S.

(1) Included in Other expenses, net in the Statements of Consolidated Loss.

(2) The net actuarial (loss) for U.S.

Pension Plans primarily reflects (i) the remeasurement of our primary U.S.

1 unchanged sentence

The Retiree Health plan's net actuarial gain reflects adjustments for the actuarial valuation results based on the January 1st plan census data.

(2) Amounts represent the pre-tax effect included within Other Comprehensive Income (Loss).

Refer to Note 18 - Other Comprehensive Income (Loss) for related tax effects and the after-tax amounts.

(3) Amounts represent the pre-tax effect included within Other Comprehensive (Loss) Income.

Refer to Note 19 - Other Comprehensive (Loss) Income for related tax effects and the after-tax amounts.

Xerox 2025 Form 10-Q 42

1 unchanged sentence

The following table summarizes cash contributions to our defined benefit pension plans and retiree health benefit plans:

Six Months Ended

June 30, Year Ended

Nine Months Ended

September 30, Year Ended

2024 Estimated 2025 (1)

4 unchanged sentences

Total Retirement plans $ 123 $ 114 $ 168 $ 145

_____________

(1) Estimated 2025 contributions include both Xerox and Lexmark.

Estimated 2025 contributions of Lexmark reflect the expected remaining contributions for 2025 from July 1, 2025 , the date of the Lexmark Acquisition.

Refer to Note 6 - Acquisition for additional information regarding the Lexmark Acquisition.

Approximately $ 90 of the estimated 2025 contributions for our U.S.

6 unchanged sentences

Non-controlling

Balance at March 31, 2025 $ 126 $ 1,141 $ 3,403 $ ( 3,617 ) $ 1,053 $ 4 $ 1,057

Comprehensive (loss) income, net — — ( 106 ) 169 63 — 63

Balance at June 30, 2025 $ 126 $ 1,154 $ 3,290 $ ( 3,448 ) $ 1,122 $ 5 $ 1,127

Comprehensive loss, net — — ( 760 ) ( 9 ) ( 769 ) — ( 769 )

Cash dividends declared - common (3)

2 unchanged sentences

— — ( 4 ) — ( 4 ) — ( 4 )

Proceeds from issuance of warrants (5)

2 9 — — 11 — 11

Stock option and incentive plans, net — 8 — — 8 — 8

Transactions with noncontrolling interests — — — — — 1 1

Balance at June 30, 2025 $ 126 $ 1,154 $ 3,290 $ ( 3,448 ) $ 1,122 $ 5 $ 1,127

Distributions to noncontrolling interests — — — — — ( 1 ) ( 1 )

Balance at September 30, 2025 $ 128 $ 1,171 $ 2,523 $ ( 3,457 ) $ 365 $ 5 $ 370

Xerox Holdings

Shareholders’

Balance at March 31, 2024 $ 124 $ 1,099 $ 4,828 $ ( 3,673 ) $ 2,378 $ 3 $ 2,381

Comprehensive income (loss) , net — — 18 ( 14 ) 4 — 4

Balance at June 30, 2024 $ 124 $ 1,114 $ 4,810 $ ( 3,687 ) $ 2,361 $ 4 $ 2,365

Comprehensive (loss) income , net — — ( 1,205 ) 173 ( 1,032 ) — ( 1,032 )

Cash dividends declared - common (3)

3 unchanged sentences

Stock option and incentive plans, net — 9 — — 9 — 9

Transactions with noncontrolling interests — — — — — 1 1

Balance at June 30, 2024 $ 124 $ 1,114 $ 4,810 $ ( 3,687 ) $ 2,361 $ 4 $ 2,365

Balance at September 30, 2024 $ 124 $ 1,123 $ 3,570 $ ( 3,514 ) $ 1,303 $ 4 $ 1,307

Xerox 2025 Form 10-Q 43

7 unchanged sentences

— — ( 11 ) — ( 11 ) — ( 11 )

Proceeds from issuance of warrants (5)

2 9 — — 11 — 11

Stock option and incentive plans, net 2 25 — — 27 — 27

1 unchanged sentence

Distributions to noncontrolling interests — — — — — ( 2 ) ( 2 )

Balance at June 30, 2025 $ 126 $ 1,154 $ 3,290 $ ( 3,448 ) $ 1,122 $ 5 $ 1,127

Balance at September 30, 2025 $ 128 $ 1,171 $ 2,523 $ ( 3,457 ) $ 365 $ 5 $ 370

Additional Paid-in Capital Retained Earnings AOCL (2)

1 unchanged sentence

Balance at December 31, 2023 $ 123 $ 1,114 $ 4,977 $ ( 3,676 ) $ 2,538 $ 10 $ 2,548

Comprehensive loss, net — — ( 95 ) ( 11 ) ( 106 ) — ( 106 )

Comprehensive (loss) income, net — — ( 1,300 ) 162 ( 1,138 ) — ( 1,138 )

Cash dividends declared - common (3)

6 unchanged sentences

Distributions to noncontrolling interests — — — — — ( 1 ) ( 1 )

Balance at June 30, 2024 $ 124 $ 1,114 $ 4,810 $ ( 3,687 ) $ 2,361 $ 4 $ 2,365

Balance at September 30, 2024 $ 124 $ 1,123 $ 3,570 $ ( 3,514 ) $ 1,303 $ 4 $ 1,307

_____________

(1) Common Stock has a par value of $ 1 per share.

(2) Refer to Note 18 - Other Comprehensive Income (Loss) for the components of AOCL.

(2) Refer to Note 19 - Other Comprehensive (Loss) Income for the components of AOCL.

(3) During the first quarter of 2025 , the annual dividend on Common Shares was reduced to $ 0.50 per share from $ 1.00 per share.

In the second quarter of 2025, the annual dividend on Common Shares was further reduced to $ 0.10 per share from $ 0.50 per share.

Cash dividends declared on common stock for the three months ended June 30, 2025 and 2024 were $ 0.025 per share and $ 0.25 per share, respectively, and $ 0.15 per share and $ 0.50 per share for the six months ended June 30, 2025 and 2024, respectively.

(4) Cash dividends declared on preferred stock for the three and six months ended June 30, 2025 and 2024 were $ 20.00 per share, respectively, and $ 40.00 per share, respectively.

Cash dividends declared on common stock for the three months ended September 30, 2025 and 2024 were $ 0.025 per share and $ 0.25 per share, respectively, and $ 0.175 per share and $ 0.75 per share for the nine months ended September 30, 2025 and 2024, respectively.

(4) Cash dividends declared on preferred stock for the three and nine months ended September 30, 2025 and 2024 were $ 20.00 per share, respectively, and $ 60.00 per share, respectively.

(5) Refer to the Unregistered Sales of Equity Securities section below for additional information.

The following is a summary of the changes in Common stock shares:

5 unchanged sentences

Balance at June 30, 2025 125,806

Stock based compensation plans, net 56

Exercise of Warrants 2,156

Balance at September 30, 2025 128,018

Unregistered Sales of Equity Securities

In connection with the issuance of the 2030 Note, Xerox Holdings issued a pre-funded warrant (the Warrant), exercisable for 2,160,256 shares of Xerox Holdings Corporation’s common stock (Common Stock), at an exercise price of $ 1.00 per share, of which $ 0.99 was prefunded, to one of the purchasers of the 2030 Notes.

The exercise price and the number of shares of common stock issuable upon exercise of the Warrant were subject to appropriate adjustment in the event of certain stock dividends, stock splits, stock combinations, or similar events effecting the Common Stock.

The Warrant was exercised during the third quarter 2025.

Refer to Note 13 - Debt for additional information regarding the issuance of the 2030 Note.

Xerox 2025 Form 10-Q 44

3 unchanged sentences

Xerox Shareholder's Equity Non- controlling Interests Total

Balance at March 31, 2025 $ 3,474 $ 1,397 $ ( 3,617 ) $ 1,254 $ 4 $ 1,258

Comprehensive (loss) income, net — ( 104 ) 169 65 — 65

Balance at June 30, 2025 $ 3,468 $ 1,287 $ ( 3,448 ) $ 1,307 $ 5 $ 1,312

Comprehensive loss, net — ( 758 ) ( 9 ) ( 767 ) — ( 767 )

Dividends declared to parent — ( 7 ) — ( 7 ) — ( 7 )

Transfers to parent ( 6 ) — — ( 6 ) — ( 6 )

Transfers from parent 16 — — 16 1 17

Transactions with noncontrolling interests — — — — ( 1 ) ( 1 )

Balance at June 30, 2025

Balance at September 30, 2025

$ 3,484 $ 522 $ ( 3,457 ) $ 549 $ 5 $ 554

1 unchanged sentence

Xerox Shareholder's Equity Non- controlling Interests Total

Balance at March 31, 2024 $ 3,465 $ 2,811 $ ( 3,673 ) $ 2,603 $ 3 $ 2,606

Comprehensive income (loss), net — 19 ( 14 ) 5 — 5

Balance at June 30, 2024 $ 3,473 $ 2,796 $ ( 3,687 ) $ 2,582 $ 4 $ 2,586

Comprehensive (loss) income, net — ( 1,204 ) 173 ( 1,031 ) — ( 1,031 )

Dividends declared to parent — ( 35 ) — ( 35 ) — ( 35 )

Transfers from parent 4 — — 4 — 4

Transactions with noncontrolling interests — — — — 1 1

Balance at June 30, 2024

Balance at September 30, 2024

$ 3,477 $ 1,557 $ ( 3,514 ) $ 1,520 $ 4 $ 1,524

7 unchanged sentences

Distributions to noncontrolling interests — — — — ( 2 ) ( 2 )

Balance at June 30, 2025 $ 3,468 $ 1,287 $ ( 3,448 ) $ 1,307 $ 5 $ 1,312

Balance at September 30, 2025 $ 3,484 $ 522 $ ( 3,457 ) $ 549 $ 5 $ 554

Additional Paid-in Capital Retained Earnings AOCL (1)

1 unchanged sentence

Balance at December 31, 2023 $ 3,485 $ 2,959 $ ( 3,676 ) $ 2,768 $ 10 $ 2,778

Comprehensive loss, net — ( 94 ) ( 11 ) ( 105 ) — ( 105 )

Comprehensive (loss) income, net — ( 1,298 ) 162 ( 1,136 ) — ( 1,136 )

Dividends declared to parent — ( 104 ) — ( 104 ) — ( 104 )

2 unchanged sentences

Distributions to noncontrolling interests — — — — ( 1 ) ( 1 )

Balance at June 30, 2024

Balance at September 30, 2024

$ 3,477 $ 1,557 $ ( 3,514 ) $ 1,520 $ 4 $ 1,524

_____________

(1) Refer to Note 18 - Other Comprehensive Income (Loss) for the components of AOCL.

(1) Refer to Note 19 - Other Comprehensive (Loss) Income for the components of AOCL.

Xerox 2025 Form 10-Q 45

Note 18 – Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss) is comprised of the following:

Note 19 – Other Comprehensive (Loss) Income

Other Comprehensive (Loss) Income is comprised of the following:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax

Translation Adjustments Gains (Losses) $ 229 $ 229 $ ( 20 ) $ ( 20 ) $ 334 $ 334 $ ( 52 ) $ ( 52 )

Translation Adjustments (Losses) Gains $ ( 42 ) $ ( 42 ) $ 197 $ 192 $ 292 $ 292 $ 145 $ 140

Unrealized (Losses) Gains

Changes in fair value of cash flow hedges losses ( 6 ) ( 5 ) ( 5 ) ( 3 ) ( 9 ) ( 7 ) ( 8 ) ( 6 )

Changes in fair value of cash flow hedges (losses) gains ( 3 ) ( 2 ) 5 3 ( 12 ) ( 9 ) ( 3 ) ( 3 )

Changes in cash flow hedges reclassed to earnings (1)

— — 1 2 1 1 8 7

Net Unrealized Losses ( 5 ) ( 4 ) ( 1 ) — ( 8 ) ( 6 ) ( 1 ) ( 1 )

Net Unrealized (Losses) Gains ( 3 ) ( 2 ) 6 5 ( 11 ) ( 8 ) 5 4

Defined Benefit Plans Gains (Losses)

Net actuarial/prior service gains (losses) 1 1 ( 13 ) ( 10 ) 1 — ( 5 ) ( 4 )

Net actuarial/prior service gains — 1 15 12 1 1 10 8

Prior service amortization (2)

2 unchanged sentences

16 14 23 26 46 41 68 60

Other (losses) gains (3)

Other gains (losses) (3)

22 22 ( 60 ) ( 60 ) ( 82 ) ( 82 ) ( 46 ) ( 46 )

Changes in Defined Benefit Plans (Losses) Gains ( 55 ) ( 56 ) 8 6 ( 75 ) ( 77 ) 51 42

Other Comprehensive Income (Loss) 169 169 ( 13 ) ( 14 ) $ 251 $ 251 $ ( 2 ) $ ( 11 )

Changes in Defined Benefit Plans Gains (Losses) 36 35 ( 24 ) ( 24 ) ( 39 ) ( 42 ) 27 18

Other Comprehensive (Loss) Income ( 9 ) ( 9 ) 179 173 $ 242 $ 242 $ 177 $ 162

(1) Reclassified to Cost of sales and interest expense - refer to Note 14 - Financial Instruments for additional information regarding our cash flow hedges.

3 unchanged sentences

AOCL is comprised of the following:

September 30,

2025 December 31,

Cumulative translation adjustments $ ( 1,874 ) $ ( 2,166 )

Other unrealized gains, net — 6

Other unrealized (losses) gains, net ( 2 ) 6

Benefit plans net actuarial losses and prior service credits ( 1,581 ) ( 1,539 )

1 unchanged sentence

Xerox 2025 Form 10-Q 46

Note 19 – ( Loss) Earnings per Share

Note 20 – Loss per Share

(shares in thousands)

The following table sets forth the computation of basic and diluted (loss) earnings per share of Xerox Holdings Corporation's common stock:

The following table sets forth the computation of basic and diluted loss per share of Xerox Holdings Corporation's common stock:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

(Loss) Earnings per Share

Net (Loss) income $ ( 106 ) $ 18 $ ( 196 ) $ ( 95 )

Loss per Share

Net Loss $ ( 760 ) $ ( 1,205 ) $ ( 956 ) $ ( 1,300 )

Accrued dividends on preferred stock ( 4 ) ( 4 ) ( 11 ) ( 11 )

Adjusted Net (loss) income available to common shareholders $ ( 109 ) $ 15 $ ( 203 ) $ ( 102 )

Adjusted Net loss available to common shareholders $ ( 764 ) $ ( 1,209 ) $ ( 967 ) $ ( 1,311 )

Weighted average common shares outstanding 126,918 124,344 126,003 124,149

Basic (Loss) Earnings per Share $ ( 0.87 ) $ 0.12 $ ( 1.62 ) $ ( 0.83 )

Diluted (Loss) Earnings per Share:

Net (Loss) income $ ( 106 ) $ 18 $ ( 196 ) $ ( 95 )

Basic Loss per Share $ ( 6.01 ) $ ( 9.71 ) $ ( 7.67 ) $ ( 10.55 )

Diluted Loss per Share:

Net Loss $ ( 760 ) $ ( 1,205 ) $ ( 956 ) $ ( 1,300 )

Accrued dividends on preferred stock ( 4 ) ( 4 ) ( 11 ) ( 11 )

Adjusted Net (loss) income available to common shareholders $ ( 109 ) $ 15 $ ( 203 ) $ ( 102 )

Adjusted Net loss available to common shareholders $ ( 764 ) $ ( 1,209 ) $ ( 967 ) $ ( 1,311 )

Weighted average common shares outstanding 126,918 124,344 126,003 124,149

4 unchanged sentences

Adjusted weighted average common shares outstanding 126,918 124,344 126,003 124,149

Diluted (Loss) Earnings per Share $ ( 0.87 ) $ 0.11 $ ( 1.62 ) $ ( 0.83 )

Diluted Loss per Share $ ( 6.01 ) $ ( 9.71 ) $ ( 7.67 ) $ ( 10.55 )

The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive:

9 unchanged sentences

In the second quarter of 2025 , the annual dividend on Common Shares was further reduced to $ 0.10 per share from $ 0.50 per share.

Xerox 2025 Form 10-Q 47

20 unchanged sentences

Below is a summary of our Brazilian tax contingencies:

September 30,

2025 December 31,

27 unchanged sentences

The parties have reached a stipulation of settlement that has been preliminarily approved by the court.

We have issued or provided approximately $ 248 of guarantees as of June 30, 2025 in the form of letters of credit or surety bonds issued to i) support certain insurance programs;

We have issued or provided approximately $ 248 of guarantees as of September 30, 2025 in the form of letters of credit or surety bonds issued to i) support certain insurance programs;

ii) support our obligations related to the Brazil contingencies;

5 unchanged sentences

We believe that our capacity in the surety markets as well as under various credit arrangements (including our Credit Facility) is sufficient to allow us to respond to future requests for proposals that require such credit support.

Note 21 – Subsequent Events

We have evaluated subsequent events through August 7, 2025, which is the date the financial statements were issued.

Lexmark Acquisition

On July 1, 2025, Xerox Corporation completed its previously announced acquisition of all of the issued and outstanding equity securities of Lexmark International II, LLC (Lexmark) from Ninestar Group Company Limited (the Seller).

Total consideration transferred included cash of approximately $ 841 , as well as the assumption of Lexmark's debt of $ 327 .

This acquisition will be accounted for under the guidance of ASC 805-10, as a business combination under the acquisition method.

Based upon the timing of this acquisition, the initial accounting for the acquisition is not yet complete as the Company gathers additional information related to the assets acquired and the liabilities assumed.

The Company is in the process of obtaining third-party valuations of certain intangible assets.

The preliminary application of acquisition accounting to the assets acquired, and liabilities assumed, as well as the results of operations will first be reflected in the Company's consolidated financial statements as of and for the three months ended September 30, 2025.

On July 1, 2025, Xerox Corporation made an incremental term loan borrowing of approximately $ 327 (Incremental Term Loans) under its TLB Facility.

Substantially all of the net proceeds of the Incremental Term Loans were used to repay (through a cashless settlement) a portion of Lexmark’s outstanding debt.

We received net proceeds (after discount, fees and expenses) on the issuance of the 2030 Notes of approximately $ 245 , and net proceeds on the 2026 Notes of approximately $ 116 .

The 2030 Notes included associated pre-funded warrant with a fair value of approximately $ 11 .

Refer to the Unregistered Sales of Equity Securities section below for additional information regarding these warrants.

During the extension period, the 2026 Notes will continue to bear interest at 13.00 % per annum.

The net proceeds of the 2026 Notes will be used for general corporate purposes including, without limitation, funding the realization of synergies associated with the Lexmark Acquisition.

The 2030 Notes are governed by an Indenture, dated as of July 1, 2025 (the 2030 Notes Indenture), among Xerox, certain of Xerox's domestic subsidiaries and U.S.

Bank Trust Company, National Association, as trustee.

Xerox 2025 Form 10-Q 49

Notes are payable quarterly in arrears on April 1, July 1, October 1 and January 1 of each year, beginning on October 1, 2025.

Step-Up Date Interest Rate Step-Up

July 1, 2026 13.500 %

July 1, 2027 14.000 %

October 1, 2027 14.125 %

January 1, 2028 14.250 %

April 1, 2028 14.500 %

July 1, 2028 14.750 %

October 1, 2028 15.000 %

January 1, 2029 15.250 %

April 1, 2029 15.500 %

July 1, 2029 15.750 %

October 1, 2029 16.000 %

January 1, 2030 16.250 %

April 1, 2030 16.500 %

July 1, 2030 16.750 %

The 2026 Notes initially bear interest at a rate of 13.00 % per annum, payable quarterly in arrears on April 1, July 1, October 1 and January 1 of each year, beginning on October 1, 2025.

The 2026 Notes are governed by an indenture, dated as of July 1, 2025 (the 2026 Notes Indenture), among Xerox, certain of Xerox’s domestic subsidiaries and U.S.

Bank Trust Company, National Association, as trustee.

Unregistered Sales of Equity Securities

The exercise price and the number of shares of Common Stock issuable upon exercise of the Warrant is subject to appropriate adjustment in the event of certain stock dividends, stock splits, stock combinations, or similar events affecting the Common Stock.

The Warrant is exercisable in cash or by means of a cashless exercise and will remain outstanding until exercised.

Tax Law Change

On July 4, 2025, H.R.

1, the One Big Beautiful Bill Act (the Act), was signed into law.

The Act contains multiple effective dates, with certain provisions applicable beginning in 2025 and others in subsequent years.

The Company is currently evaluating the potential impacts of the Act on its consolidated financial statements.

These impacts may be material, particularly with respect to the Company’s assessment of its valuation allowance on U.S.

deferred tax assets.

As of June 30, 2025, our total deferred tax asset balance was $ 551 , which is net of total valuation allowances of $ 567 .

The Company will continue to evaluate both the effects of the law and the Company’s operating results, and may adjust its valuation allowance, accordingly, based on whether it is more likely than not that the deferred tax assets will be realized.

Any such changes may result in the recognition or reversal of a valuation allowance, which could materially affect income tax expense in the period recognized and future periods.

We expect the impacts of the Act to be reflected in the Company's consolidated financial statements as of and for the three months ended September 30, 2025.

Xerox 2025 Form 10-Q 45

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

What changed 10-Q

Item 1. Financial Statements