1 unchanged sentence
Xerox 2025 Annual Report 74
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Report of Independent Registered Public Accounting Firm
18 unchanged sentences
We believe that our audits provide a reasonable basis for our opinions.
−Removed: As described in Management’s Report on Internal Control over Financial Reporting, management has excluded ITsavvy Acquisition Company, Inc.
−Removed: ("ITsavvy") from its assessment of internal control over financial reporting as of December 31, 2024 because it was acquired by the Company in a purchase business combination during 2024.
−Removed: We have also excluded ITsavvy from our audit of internal control over financial reporting.
−Removed: ITsavvy is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represented less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.
−Removed: Xerox 2024 Annual Report 71
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Lexmark International II, LLC ("Lexmark") from its assessment of internal control over financial reporting as of December 31, 2025, because it was acquired by the Company in a purchase business combination during 2025.
+Added: We have also excluded Lexmark from our audit of internal control over financial reporting.
+Added: Lexmark is a wholly owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 13% and 14%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025.
Definition and Limitations of Internal Control over Financial Reporting
1 unchanged sentence
A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
+Added: (ii) provide reasonable
+Added: Xerox 2025 Annual Report 75
+Added: Table of Conten t s
+Added: assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
4 unchanged sentences
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
−Removed: Goodwill Impairment Assessment - Print and Other Reporting Unit
−Removed: As described in Notes 2 and 12 to the consolidated financial statements, the Company’s consolidated goodwill, net balance was $1,937 million as of December 31, 2024, which is fully allocated to the Print and Other reporting unit.
−Removed: Management assesses goodwill for impairment at least annually, and more frequently if indicators of impairment exist.
−Removed: If the fair value exceeds the carrying value, goodwill is not considered impaired.
−Removed: If the carrying value exceeds the fair value, goodwill is considered impaired, and management would recognize an impairment loss for the excess.
−Removed: In a quantitative impairment test, management assesses goodwill by comparing the carrying amount of the reporting unit to its fair value, and the fair value of the reporting unit is determined by using a weighted combination of an income approach and a market approach.
−Removed: In the third quarter of 2024, management concluded that a quantitative impairment test of goodwill was required.
−Removed: Based on that test, management determined that the estimated fair value of the Print and Other reporting unit had declined below its carrying value and recognized an after-tax non-cash impairment charge of $1,015 million ($1,058 million pre-tax) related to the Company’s goodwill.
−Removed: As disclosed by management, the income approach is based on the discounted cash flow method that uses management’s estimates of forecasted future financial performance including revenues, gross margins, operating expenses, and taxes.
−Removed: Projected cash flows are then discounted to a present value employing a discount rate that properly accounts for the estimated market weighted-average cost of capital, as well as any risks unique to the subject cash flows.
−Removed: The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Print and Other reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Print and Other reporting unit;
−Removed: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to estimates of forecasted revenues, gross margins, operating expenses, and taxes, and the discount rate;
+Added: Acquisition of Lexmark - Valuation of Customer Relationships
+Added: As described in Note 6 to the consolidated financial statements, on July 1, 2025, the Company completed the acquisition of Lexmark for total consideration paid of $768 million.
+Added: Of the acquired total identifiable intangible assets, $530 million of customer relationships were recorded.
+Added: Customer relationships were valued using a multi-period excess earnings method which calculates the present value of the estimated revenues and net cash flows derived from it.
+Added: The present value of these projected future cash flows included significant judgment and assumptions regarding projected annual revenues derived from estimates of customer attrition, projected operating margins, and the discount rate.
+Added: The principal considerations for our determination that performing procedures relating to the valuation of customer relationships acquired in the acquisition of Lexmark is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the customer relationships acquired;
+Added: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to projected annual revenues derived from estimates of customer attrition, projected operating margins, and the discount rate;
and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the fair value estimate of the Print and Other reporting unit.
−Removed: These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Print and Other reporting unit;
−Removed: (ii) evaluating the appropriateness of the discounted cash flow method used by management;
−Removed: (iii) testing the completeness and
−Removed: Xerox 2024 Annual Report 72
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: accuracy of underlying data used in the discounted cash flow method;
−Removed: and (iv) evaluating the reasonableness of the significant assumptions used by management related to estimates of forecasted revenues, gross margins, operating expenses, and taxes, and the discount rate.
−Removed: Evaluating management’s assumptions related to estimates of forecasted revenues, gross margins, operating expenses, and taxes involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Print and Other reporting unit;
−Removed: (ii) the consistency with external market and industry data;
−Removed: and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.
−Removed: Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow method and (ii) the reasonableness of the discount rate assumption.
+Added: These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer relationships acquired.
+Added: These procedures also included, among others (i) reading the purchase agreement;
+Added: (ii) testing management’s process for developing the fair value estimate of the customer relationships acquired;
+Added: (iii) evaluating the appropriateness of the multi-period excess earnings method used by management;
+Added: (iv) testing the completeness and accuracy of the underlying data used in the multi-period excess earnings method;
+Added: and (v) evaluating the reasonableness of the significant assumptions used by management related to projected annual revenues derived from estimates of customer attrition, projected operating margins, and the discount rate.
+Added: Evaluating management’s assumption related to projected operating margins involved considering (i) the current and past performance of the Lexmark business and (ii) whether the assumption was consistent with evidence obtained in other areas of the audit.
+Added: Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings method and (ii) the reasonableness of the projected annual revenues derived from estimates of customer attrition and discount rate assumptions.
/s/ PricewaterhouseCoopers LLP
Stamford, Connecticut
−Removed: February 24, 2025
+Added: March 16, 2026
We have served as the Company’s or its predecessor's auditor since 2001.
Xerox 2025 Annual Report 76
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Report of Independent Registered Public Accounting Firm
18 unchanged sentences
We believe that our audits provide a reasonable basis for our opinions.
−Removed: As described in Management’s Report on Internal Control over Financial Reporting, management has excluded ITsavvy Acquisition Company, Inc.
−Removed: ("ITsavvy") from its assessment of internal control over financial reporting as of December 31, 2024 because it was acquired by the Company in a purchase business combination during 2024.
−Removed: We have also excluded ITsavvy from our audit of internal control over financial reporting.
−Removed: ITsavvy is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represented less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.
−Removed: Xerox 2024 Annual Report 74
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Lexmark International II, LLC ("Lexmark") from its assessment of internal control over financial reporting as of December 31, 2025, because it was acquired by the Company in a purchase business combination during 2025.
+Added: We have also excluded Lexmark from our audit of internal control over financial reporting.
+Added: Lexmark is a wholly owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 13% and 14%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
+Added: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
+Added: Xerox 2025 Annual Report 77
+Added: Table of Conten t s
+Added: accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
5 unchanged sentences
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
−Removed: Goodwill Impairment Assessment - Print and Other Reporting Unit
−Removed: As described in Notes 2 and 12 to the consolidated financial statements, the Company’s consolidated goodwill, net balance was $1,937 million as of December 31, 2024, which is fully allocated to the Print and Other reporting unit.
−Removed: Management assesses goodwill for impairment at least annually, and more frequently if indicators of impairment exist.
−Removed: If the fair value exceeds the carrying value, goodwill is not considered impaired.
−Removed: If the carrying value exceeds the fair value, goodwill is considered impaired, and management would recognize an impairment loss for the excess.
−Removed: In a quantitative impairment test, management assesses goodwill by comparing the carrying amount of the reporting unit to its fair value, and the fair value of the reporting unit is determined by using a weighted combination of an income approach and a market approach.
−Removed: In the third quarter of 2024, management concluded that a quantitative impairment test of goodwill was required.
−Removed: Based on that test, management determined that the estimated fair value of the Print and Other reporting unit had declined below its carrying value and recognized an after-tax non-cash impairment charge of $1,015 million ($1,058 million pre-tax) related to the Company’s goodwill.
−Removed: As disclosed by management, the income approach is based on the discounted cash flow method that uses management’s estimates of forecasted future financial performance including revenues, gross margins, operating expenses, and taxes.
−Removed: Projected cash flows are then discounted to a present value employing a discount rate that properly accounts for the estimated market weighted-average cost of capital, as well as any risks unique to the subject cash flows.
−Removed: The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Print and Other reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Print and Other reporting unit;
−Removed: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to estimates of forecasted revenues, gross margins, operating expenses, and taxes, and the discount rate;
+Added: Acquisition of Lexmark – Valuation of Customer Relationships
+Added: As described in Note 6 to the consolidated financial statements, on July 1, 2025, the Company completed the acquisition of Lexmark for total consideration paid of $768 million.
+Added: Of the acquired total identifiable intangible assets, $530 million of customer relationships were recorded.
+Added: Customer relationships were valued using a multi-period excess earnings method which calculates the present value of the estimated revenues and net cash flows derived from it.
+Added: The present value of these projected future cash flows included significant judgment and assumptions regarding projected annual revenues derived from estimates of customer attrition, projected operating margins, and the discount rate.
+Added: The principal considerations for our determination that performing procedures relating to the valuation of customer relationships acquired in the acquisition of Lexmark is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the customer relationships acquired;
+Added: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to projected annual revenues derived from estimates of customer attrition, projected operating margins, and the discount rate;
and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the fair value estimate of the Print and Other reporting unit.
−Removed: These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Print and Other reporting unit;
−Removed: (ii) evaluating the appropriateness of the discounted cash flow method used by management;
−Removed: (iii) testing the completeness and
−Removed: Xerox 2024 Annual Report 75
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: accuracy of underlying data used in the discounted cash flow method;
−Removed: and (iv) evaluating the reasonableness of the significant assumptions used by management related to estimates of forecasted revenues, gross margins, operating expenses, and taxes, and the discount rate.
−Removed: Evaluating management’s assumptions related to estimates of forecasted revenues, gross margins, operating expenses, and taxes involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Print and Other reporting unit;
−Removed: (ii) the consistency with external market and industry data;
−Removed: and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.
−Removed: Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow method and (ii) the reasonableness of the discount rate assumption.
+Added: These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer relationships acquired.
+Added: These procedures also included, among others (i) reading the purchase agreement;
+Added: (ii) testing management’s process for developing the fair value estimate of the customer relationships acquired;
+Added: (iii) evaluating the appropriateness of the multi-period excess earnings method used by management;
+Added: (iv) testing the completeness and accuracy of the underlying data used in the multi-period excess earnings method;
+Added: and (v) evaluating the reasonableness of the significant assumptions used by management related to projected annual revenues derived from estimates of customer attrition, projected operating margins, and the discount rate.
+Added: Evaluating management’s assumption related to projected operating margins involved considering (i) the current and past performance of the Lexmark business and (ii) whether the assumption was consistent with evidence obtained in other areas of the audit.
+Added: Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings method and (ii) the reasonableness of the projected annual revenues derived from estimates of customer attrition and discount rate assumptions.
/s/ PricewaterhouseCoopers LLP
Stamford, Connecticut
−Removed: February 24, 2025
+Added: March 16, 2026
We have served as the Company’s auditor since 2001.
Xerox 2025 Annual Report 78
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: Xerox Holdings Corporation
−Removed: Reports of Management
−Removed: Management's Responsibility for Financial Statements
−Removed: The management of Xerox Holdings Corporation is responsible for the integrity and objectivity of all information presented in this annual report.
−Removed: The Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America and include amounts based on management's best estimates and judgments.
−Removed: Management believes the Consolidated Financial Statements fairly reflect the form and substance of transactions and that the financial statements fairly represent Xerox Holdings Corporation's financial position and results of operations.
−Removed: The Audit Committee of the Xerox Holdings Corporation Board of Directors, which is composed solely of independent directors, meets regularly with the independent auditors, PricewaterhouseCoopers LLP, the internal auditors and representatives of management to review accounting, financial reporting, internal control and audit matters, as well as the nature and extent of the audit effort.
−Removed: The Audit Committee is responsible for the engagement of the independent auditors.
−Removed: The independent auditors and internal auditors have free access to the Audit Committee.
−Removed: Management's Report on Internal Control Over Financial Reporting
−Removed: The management of Xerox Holdings Corporation is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the rules promulgated under the Securities Exchange Act of 1934.
−Removed: Under the supervision and with the participation of our management, including our principal executive, financial and accounting officers, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control - Integrated Framework (2013) ” issued by the Committee of Sponsoring Organizations of the Treadway Commission.
−Removed: Based on the above evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2024.
−Removed: The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included herein.
−Removed: /s/ S TEVEN J.
−Removed: /s/ M IRLANDA G ECAJ
−Removed: /s/ W ILLIAM T WOMEY
−Removed: Chief Executive Officer Chief Financial Officer Chief Accounting Officer
−Removed: Xerox 2024 Annual Report 77
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: Xerox Corporation
−Removed: Reports of Management
−Removed: Management's Responsibility for Financial Statements
−Removed: The management of Xerox Corporation is responsible for the integrity and objectivity of all information presented in this annual report.
−Removed: The Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America and include amounts based on management's best estimates and judgments.
−Removed: Management believes the Consolidated Financial Statements fairly reflect the form and substance of transactions and that the financial statements fairly represent Xerox Corporation's financial position and results of operations.
−Removed: The Audit Committee of the Xerox Holdings Corporation Board of Directors, which is composed solely of independent directors, meets regularly with the independent auditors, PricewaterhouseCoopers LLP, the internal auditors and representatives of management to review accounting, financial reporting, internal control and audit matters, as well as the nature and extent of the audit effort.
−Removed: The Audit Committee is responsible for the engagement of the independent auditors.
−Removed: The independent auditors and internal auditors have free access to the Audit Committee.
−Removed: Management's Report on Internal Control Over Financial Reporting
−Removed: The management of Xerox Corporation is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the rules promulgated under the Securities Exchange Act of 1934.
−Removed: Under the supervision and with the participation of our management, including our principal executive, financial and accounting officers, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control - Integrated Framework (2013) ” issued by the Committee of Sponsoring Organizations of the Treadway Commission.
−Removed: Based on the above evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2024.
−Removed: The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included herein.
−Removed: /s/ S TEVEN J.
−Removed: /s/ M IRLANDA G ECAJ
−Removed: /s/ W ILLIAM T WOMEY
−Removed: Chief Executive Officer Chief Financial Officer Chief Accounting Officer
−Removed: Xerox 2024 Annual Report 78
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Xerox Holdings Corporation
3 unchanged sentences
Sales $ 3,283 $ 2,378 $ 2,720
−Removed: Services, maintenance and rentals 3,692 3,975 4,100
−Removed: Financing 151 191 207
+Added: Services, maintenance, rentals and other (1)
+Added: 3,739 3,843 4,166
Total Revenues 7,022 6,221 6,886
1 unchanged sentence
Cost of sales 2,367 1,562 1,778
−Removed: Cost of services, maintenance and rentals 2,593 2,664 2,679
−Removed: Cost of financing 106 130 108
+Added: Cost of services, maintenance , rentals and other (1)
+Added: 2,754 2,699 2,794
Research, development and engineering expenses 230 191 229
14 unchanged sentences
Diluted Loss per Share $ ( 8.25 ) $ ( 10.75 ) $ ( 0.09 )
+Added: _____________
+Added: (1) In 2025, certain reclassifications were made within the Consolidated Statements of (Loss) Income to the prior periods in order to conform to the current period reporting.
+Added: Refer to the Segments section of Note 1 - Basis of Presentation for additional information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2025 Annual Report 79
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Xerox Holdings Corporation
3 unchanged sentences
Net (Loss) Income $ ( 1,029 ) $ ( 1,321 ) $ 1
−Removed: Other Comprehensive (Loss) Income, Net (1)
+Added: Other Comprehensive Income (Loss), Net (1)
Translation adjustments, net 305 ( 120 ) 191
−Removed: Unrealized gains (losses), net 9 1 ( 2 )
+Added: Unrealized (losses) gains, net ( 10 ) 9 1
Changes in defined benefit plans, net 93 88 ( 331 )
−Removed: Other Comprehensive Loss, Net ( 23 ) ( 139 ) ( 549 )
+Added: Other Comprehensive Income (Loss), Net 388 ( 23 ) ( 139 )
Comprehensive Loss, Net $ ( 641 ) $ ( 1,344 ) $ ( 138 )
_____________
−Removed: (1) Refer to Note 24 - Other Comprehensive Loss for gross components of Other Comprehensive Loss, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.
+Added: (1) Refer to Note 24 - Other Comprehensive Income (Loss) for gross components of Other Comprehensive Income ( Loss), reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2025 Annual Report 80
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Xerox Holdings Corporation
28 unchanged sentences
Commitments and Contingencies (See Note 20)
−Removed: Noncontrolling Interests (See Note 6) 10 10
+Added: Noncontrolling Interests 10 10
Convertible Preferred Stock 214 214
10 unchanged sentences
Xerox 2025 Annual Report 81
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Xerox Holdings Corporation
4 unchanged sentences
Net (Loss) Income $ ( 1,029 ) $ ( 1,321 ) $ 1
−Removed: Adjustments required to reconcile Net (loss) income to Cash flows provided by operating activities
+Added: Adjustments required to reconcile Net (loss) income to Net Cash provided by operating activities:
Depreciation and amortization 331 274 251
Provisions 85 110 54
+Added: Inventory-related purchase accounting adjustment-noncash 102 — —
+Added: Effective settlement of a pre-existing relationship between Lexmark and Xerox ( 43 ) — —
Deferred tax benefit 502 90 ( 68 )
8 unchanged sentences
Contributions to retirement plans ( 161 ) ( 145 ) ( 102 )
−Removed: Decrease (increase) in accounts receivable and billed portion of finance receivables 71 ( 5 ) ( 48 )
+Added: (Increase) decrease in accounts receivable and billed portion of finance receivables ( 36 ) 71 ( 5 )
(Increase) decrease in inventories ( 12 ) ( 122 ) 123
Increase in equipment on operating leases ( 126 ) ( 107 ) ( 141 )
−Removed: Decrease (increase) in finance receivables 663 614 ( 141 )
−Removed: (Increase) decrease in other current and long-term assets ( 14 ) 16 27
−Removed: (Decrease) increase in accounts payable ( 48 ) ( 290 ) 278
+Added: Decrease in finance receivables 489 663 614
+Added: Decrease (increase) in other current and long-term assets 9 ( 14 ) 16
+Added: Increase (decrease) in accounts payable 24 ( 48 ) ( 290 )
(Decrease) increase in accrued compensation ( 53 ) ( 78 ) 48
−Removed: (Decrease) increase in other current and long-term liabilities ( 47 ) ( 114 ) 9
+Added: Increase (decrease) in other current and long-term liabilities 33 ( 47 ) ( 114 )
Net change in income tax assets and liabilities ( 26 ) ( 50 ) ( 12 )
9 unchanged sentences
Cash Flows from Financing Activities
+Added: Net proceeds on short-term debt 119 — —
Proceeds from issuance of long-term debt 1,140 907 1,396
4 unchanged sentences
Other financing, net ( 29 ) ( 14 ) ( 15 )
−Removed: Net cash used in financing activities ( 271 ) ( 1,202 ) ( 822 )
+Added: Net cash provided by (used in) financing activities 404 ( 271 ) ( 1,202 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash 4 ( 28 ) ( 1 )
−Removed: Increase (decrease) in cash, cash equivalents and restricted cash 14 ( 522 ) ( 770 )
+Added: (Decrease) increase in cash, cash equivalents and restricted cash ( 66 ) 14 ( 522 )
Cash, cash equivalents and restricted cash at beginning of year 631 617 1,139
2 unchanged sentences
Xerox 2025 Annual Report 82
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Xerox Holdings Corporation
7 unchanged sentences
Balance at December 31, 2022 $ 156 $ 1,588 $ — $ 5,136 $ ( 3,537 ) $ 3,343 $ 10 $ 3,353
−Removed: Comprehensive loss, net — — — ( 322 ) ( 549 ) ( 871 ) — ( 871 )
+Added: Comprehensive income (loss), net — — — 1 ( 139 ) ( 138 ) — ( 138 )
Cash dividends declared-common (3)
8 unchanged sentences
Balance at December 31, 2023 $ 123 $ 1,114 $ — $ 4,977 $ ( 3,676 ) $ 2,538 $ 10 $ 2,548
−Removed: Comprehensive income (loss), net — — — 1 ( 139 ) ( 138 ) — ( 138 )
+Added: Comprehensive loss, net — — — ( 1,321 ) ( 23 ) ( 1,344 ) — ( 1,344 )
Cash dividends declared-common (3)
2 unchanged sentences
— — — ( 14 ) — ( 14 ) — ( 14 )
+Added: Purchases of capped calls (5)
+Added: — ( 17 ) — — — ( 17 ) — ( 17 )
Stock option and incentive plans, net 1 40 — — — 41 — 41
−Removed: Common stock repurchased — — ( 553 ) — — ( 553 ) — ( 553 )
−Removed: Cancellation of treasury stock ( 34 ) ( 519 ) 553 — — — — —
Transactions with noncontrolling interests — — — — — — ( 4 ) ( 4 )
1 unchanged sentence
Balance at December 31, 2024 $ 124 $ 1,137 $ — $ 3,514 $ ( 3,699 ) $ 1,076 $ 4 $ 1,080
−Removed: Comprehensive loss, net — — — ( 1,321 ) ( 23 ) ( 1,344 ) — ( 1,344 )
+Added: Comprehensive (loss) income, net — — — ( 1,029 ) 388 ( 641 ) — ( 641 )
Cash dividends declared-common (3)
2 unchanged sentences
— — — ( 14 ) — ( 14 ) — ( 14 )
−Removed: Purchases of capped calls (5)
+Added: Proceeds from issuance of warrants (6)
2 9 — — — 11 — 11
6 unchanged sentences
(2) AOCL - Accumulated other comprehensive loss.
−Removed: (3) Cash dividends declared on common stock for 2024, 2023 and 2022 were $ 0.25 per share on a quarterly basis and $ 1.00 per share on an annual basis, respectively.
−Removed: (4) Cash dividends declared on preferred stock for 2024, 2023 and 2022 were $ 20 per share on a quarterly basis and $ 80 per share on an annual basis, respectively.
−Removed: (5) The purchases of the capped calls resulted in a tax benefit of approximately $ 6 .
+Added: (3) During the first quarter of 2025, the annual cash dividend on common stock was reduced to $ 0.50 per share from $ 1.00 per share, and the quarterly cash dividend was reduced from $ 0.25 per share to $ 0.125 per share.
+Added: In the second quarter of 2025, the annual cash dividend on common stock was further reduced to $ 0.10 per share from $ 0.50 per share, and the quarterly cash dividend from $ 0.125 per share to $ 0.025 per share.
+Added: Cash dividends declared on common stock for 2024 and 2023 were $ 1.00 per share on an annual basis and $ 0.25 per share on a quarterly basis, respectively.
+Added: (4) Cash dividends declared on preferred stock for 2025, 2024 and 2023 were $ 80 per share on an annual basis and $ 20 per share on a quarterly basis, respectively.
+Added: (5) The purchases of the capped calls in 2024 resulted in a tax benefit of approximately $ 6 .
Refer to Note 15 - Debt for additional information related to the purchases of capped calls in connection with the issuance of Xerox Holdings Corporation's $ 400 of 3.75 % Convertible Senior Notes due 2030.
+Added: (6) Refer to the Unregistered Sales of Equity Securities section in Note 22 - Shareholders' Equity for additional information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2025 Annual Report 83
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Xerox Corporation
3 unchanged sentences
Sales $ 3,283 $ 2,378 $ 2,720
−Removed: Services, maintenance and rentals 3,692 3,975 4,100
−Removed: Financing 151 191 207
+Added: Services, maintenance, rentals and other (1)
+Added: 3,739 3,843 4,166
Total Revenues 7,022 6,221 6,886
1 unchanged sentence
Cost of sales 2,367 1,562 1,778
−Removed: Cost of services, maintenance and rentals 2,593 2,664 2,679
−Removed: Cost of financing 106 130 108
+Added: Cost of services, maintenance, rentals and other (1)
+Added: 2,754 2,699 2,794
Research, development and engineering expenses 230 191 229
10 unchanged sentences
Net (Loss) Income $ ( 1,017 ) $ ( 1,316 ) $ 1
+Added: _____________
+Added: (1) In 2025, certain reclassifications were made within the Consolidated Statements of (Loss) Income to the prior periods in order to conform to the current period reporting.
+Added: Refer to the Segments section of Note 1 - Basis of Presentation for additional information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2025 Annual Report 84
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Xerox Corporation
3 unchanged sentences
Net (Loss) Income $ ( 1,017 ) $ ( 1,316 ) $ 1
−Removed: Other Comprehensive (Loss) Income , Net (1)
+Added: Other Comprehensive Income (Loss), Net (1)
Translation adjustments, net 305 ( 120 ) 191
−Removed: Unrealized gains (losses), net 9 1 ( 2 )
+Added: Unrealized (losses) gains, net ( 10 ) 9 1
Changes in defined benefit plans, net 93 88 ( 331 )
−Removed: Other Comprehensive Loss, Net ( 23 ) ( 139 ) ( 549 )
+Added: Other Comprehensive Income (Loss), Net 388 ( 23 ) ( 139 )
Comprehensive Loss, Net $ ( 629 ) $ ( 1,339 ) $ ( 138 )
_____________
−Removed: (1) Refer to Note 24 - Other Comprehensive Loss for gross components of Other Comprehensive Loss, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.
+Added: (1) Refer to Note 24 - Other Comprehensive Income (Loss) for gross components of Other Comprehensive Income (Loss), reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.
The accompanying notes are an integral part of these Consolidated Financial Statements.
Xerox 2025 Annual Report 85
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Xerox Corporation
30 unchanged sentences
Commitments and Contingencies (See Note 20)
−Removed: Noncontrolling Interests (See Note 6) 10 10
+Added: Noncontrolling Interests 10 10
Additional paid-in capital 3,492 3,487
7 unchanged sentences
Xerox 2025 Annual Report 86
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Xerox Corporation
4 unchanged sentences
Net (Loss) Income $ ( 1,017 ) $ ( 1,316 ) $ 1
−Removed: Adjustments required to reconcile Net (loss) income to Cash flows provided by operating activities
+Added: Adjustments required to reconcile Net (loss) income to Net Cash provided by operating activities:
Depreciation and amortization 331 274 251
Provisions 85 110 54
+Added: Inventory-related purchase accounting adjustment-noncash 102 — —
+Added: Effective settlement of a pre-existing relationship between Lexmark and Xerox ( 43 ) — —
Deferred tax benefit 502 90 ( 68 )
8 unchanged sentences
Contributions to retirement plans ( 161 ) ( 145 ) ( 102 )
−Removed: Decrease (increase) in accounts receivable and billed portion of finance receivables 71 ( 5 ) ( 48 )
+Added: (Increase) decrease in accounts receivable and billed portion of finance receivables ( 36 ) 71 ( 5 )
(Increase) decrease in inventories ( 12 ) ( 122 ) 123
Increase in equipment on operating leases ( 126 ) ( 107 ) ( 141 )
−Removed: Decrease (increase) in finance receivables 663 614 ( 141 )
+Added: Decrease in finance receivables 489 663 614
(Increase) decrease in other current and long-term assets ( 3 ) ( 19 ) 16
−Removed: (Decrease) increase in accounts payable ( 48 ) ( 290 ) 278
+Added: Increase (decrease) in accounts payable 24 ( 48 ) ( 290 )
Decrease (increase) in accrued compensation ( 53 ) ( 78 ) 48
−Removed: (Decrease) increase in other current and long-term liabilities ( 47 ) ( 114 ) 9
+Added: Increase (decrease) in other current and long-term liabilities 33 ( 47 ) ( 114 )
Net change in income tax assets and liabilities ( 26 ) ( 50 ) ( 12 )
9 unchanged sentences
Cash Flows from Financing Activities
+Added: Net proceeds on short-term debt 119 — —
Proceeds from issuance of long-term debt 1,140 907 1,396
2 unchanged sentences
Other financing, net ( 34 ) ( 4 ) ( 7 )
−Removed: Net cash used in financing activities ( 291 ) ( 1,207 ) ( 835 )
+Added: Net cash provided by (used in) financing activities 391 ( 291 ) ( 1,207 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash 4 ( 28 ) ( 1 )
−Removed: Increase (decrease) in cash, cash equivalents and restricted cash 13 ( 522 ) ( 770 )
+Added: (Decrease) increase in cash, cash equivalents and restricted cash ( 66 ) 13 ( 522 )
Cash, cash equivalents and restricted cash at beginning of year 630 617 1,139
2 unchanged sentences
Xerox 2025 Annual Report 87
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Xerox Corporation
6 unchanged sentences
Balance at December 31, 2022 $ 3,693 $ 3,427 $ ( 3,537 ) $ 3,583 $ 10 $ 3,593
−Removed: Comprehensive loss, net — ( 322 ) ( 549 ) ( 871 ) — ( 871 )
+Added: Comprehensive income (loss), net — 1 ( 139 ) ( 138 ) — ( 138 )
Dividends declared to parent — ( 469 ) — ( 469 ) — ( 469 )
−Removed: Transfers from parent 491 — — 491 — 491
+Added: Transfers to parent ( 208 ) — — ( 208 ) — ( 208 )
Transactions with noncontrolling interests — — — — 2 2
1 unchanged sentence
Balance at December 31, 2023 $ 3,485 $ 2,959 $ ( 3,676 ) $ 2,768 $ 10 $ 2,778
−Removed: Comprehensive income (loss), net — 1 ( 139 ) ( 138 ) — ( 138 )
+Added: Comprehensive loss, net — ( 1,316 ) ( 23 ) ( 1,339 ) — ( 1,339 )
Dividends declared to parent — ( 139 ) — ( 139 ) — ( 139 )
−Removed: Transfers to parent ( 208 ) — — ( 208 ) — ( 208 )
+Added: Transfers from parent 2 — — 2 — 2
Transactions with noncontrolling interests — — — — ( 4 ) ( 4 )
1 unchanged sentence
Balance at December 31, 2024 $ 3,487 $ 1,504 $ ( 3,699 ) $ 1,292 $ 4 $ 1,296
−Removed: Comprehensive loss, net — ( 1,316 ) ( 23 ) ( 1,339 ) — ( 1,339 )
+Added: Comprehensive (loss) income, net — ( 1,017 ) 388 ( 629 ) — ( 629 )
Dividends declared to parent — ( 39 ) — ( 39 ) — ( 39 )
7 unchanged sentences
Xerox 2025 Annual Report 88
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Xerox Holdings Corporation
14 unchanged sentences
Currently, Xerox Holdings' primary direct operating subsidiary is Xerox and therefore Xerox represents nearly all of Xerox Holdings' operations.
−Removed: Xerox is a global enterprise for workplace technology that integrates hardware, services and software for large to small enterprises.
−Removed: As customers seek to manage information and document workflows across digital and physical platforms, we deliver secure and sustainable document management solutions.
−Removed: We provide advanced document technology, services, software for a range of customers including small and mid-sized businesses, large enterprises, governments and graphic communications providers, and for our partners who serve them.
−Removed: Xerox serves customers globally in North America, Latin America, Brazil, Europe, Eurasia, the Middle East, Africa and India.
+Added: Xerox is a workplace technology company, building and integrating services-led, software-enabled, workplace solutions for enterprises large and small.
+Added: As customers seek to manage information and document workflows across digital and physical platforms, we deliver a seamless, secure, and sustainable experience.
+Added: We provide advanced document technology, services, software, and integrated IT infrastructure solutions for a range of customers including small and mid-sized businesses, large enterprises, governments and graphic communications providers, and for our partners who serve them.
+Added: Xerox serves customers globally in North America, Europe, Latin America, Brazil, Asia Pacific (APAC), the Middle East, Africa, and India.
Xerox Holdings' other direct subsidiary, Xerox Ventures LLC, which was established solely to invest in startups and early/mid-stage growth companies aligned with the Company’s innovation focus areas and targeted adjacencies.
−Removed: At December 31, 2023 Xerox Ventures, LLC held investments of $ 26 .
In January 2024, Myriad Ventures Fund I LP (Myriad) was established, and the investments held by Xerox Ventures LLC were transferred to Myriad, which will continue to be fully consolidated by Xerox Holdings.
−Removed: The investments are normally equity or equity-linked and for less than 20% ownership.
+Added: The investments are primarily equity or equity-linked and for less than 20% ownership.
Since the investments normally do not have readily determinable fair values, they are accounted for under the measurement alternative per ASC Topic 321-10-35-2.
−Removed: At December 31, 2024, Myriad had investments of $ 40 .
+Added: At December 31, 2025 and 2024, Xerox's investment in Myriad was $ 41 and $ 40 , respectively.
Basis of Consolidation
4 unchanged sentences
Operating results for variable interest entities in which we are determined to be the primary beneficiary are included in the Consolidated Statements of (Loss) Income from the date such determination is made.
+Added: The Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business.
+Added: Currently, we are not aware of any other trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months.
+Added: Xerox 2025 Annual Report 89
+Added: Table of Conten t s
+Added: Our liquidity is primarily dependent on our ability to generate positive cash flows from operations.
+Added: Additional liquidity is also provided through access to the financial capital markets and a committed asset-based revolving credit agreement (the ABL Facility), as well as the sales and assignment of finance lease receivables.
+Added: Our access to financial capital markets may be limited from time to time due to a number of factors, including our credit ratings, the level of our outstanding indebtedness, and prevailing market conditions, including the trading levels of our existing debt securities.
+Added: Based on our current level of operations, we do not expect our near term liquidity needs to be dependent on access to the financial capital markets and we believe that our available sources will be adequate to meet our liquidity needs for at least the next 12 months.
Use of Estimates
1 unchanged sentence
Future events and their effects cannot be predicted with certainty;
−Removed: accordingly, our accounting estimates
−Removed: Xerox 2024 Annual Report 89
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: require the exercise of judgment.
+Added: accordingly, our accounting estimates require the exercise of judgment.
The accounting estimates used in the preparation of our Consolidated Financial Statements will change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes.
3 unchanged sentences
Such changes and refinements in estimation methodologies are reflected in reported results of operations in the period in which the changes are made and, if material, their effects are disclosed in the Notes to the Consolidated Financial Statements and in Management's Discussion and Analysis of Financial Condition and Results of Operations.
+Added: Lexmark Acquisition
+Added: 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).
+Added: Refer to Note 6 - Acquisition and Divestitures for additional information.
+Added: 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.
+Added: As such, it was determined that there are two reportable segments - Print and Other, and IT Solutions.
+Added: Prior to this change, the Company had two reportable segments - Print and Other, and Xerox Financial Services (XFS).
+Added: As a result of this change, prior period reportable segment results and related disclosures have been conformed to reflect the Company’s current reportable segments.
+Added: Refer to Note 4 - Segment and Geographic Area Reporting for additional information regarding this change.
+Added: In connection with these changes to our reportable segments, certain reclassifications were made to the Consolidated Statements of (Loss) Income as follows:
+Added: Year Ended December 31, 2024 Year Ended December 31, 2023
+Added: Previously Reported Reclassification As Reported Previously Reported Reclassification As Reported
+Added: Services, maintenance, rentals and other $ 3,692 $ 151 $ 3,843 $ 3,975 $ 191 $ 4,166
+Added: Financing 151 ( 151 ) — 191 ( 191 ) —
+Added: Cost of services, maintenance, rentals and other $ 2,593 $ 106 $ 2,699 $ 2,664 $ 130 $ 2,794
+Added: Cost of financing 106 ( 106 ) — 130 ( 130 ) —
+Added: Xerox 2025 Annual Report 90
+Added: Table of Conten t s
Note 2 – Recent Accounting Pronouncements and Summary of Significant Accounting Policies
4 unchanged sentences
Accounting Standard Updates to be Adopted:
−Removed: Income Tax Disclosures
−Removed: In December 2023, the FASB issued ASU 2023-09 , Income Taxes (Topic 740):
−Removed: Improvements to Income Tax Disclosures , which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.
−Removed: The amendments are effective for the Company’s annual periods beginning January 1, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively.
−Removed: We are currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.
+Added: Interim Reporting - Narrow-Scope Improvements
+Added: In December 2025, the FASB issued ASU 2025-11 , Interim Reporting (Topic 270):
+Added: Narrow-Scope Improvements, which amends existing guidance to clarify and improve certain interim reporting requirements, including disclosures and the application of interim period accounting principles in specific circumstances.
+Added: The amendments in this update also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.
+Added: The amendments are effective for interim reporting periods beginning after December 15, 2027.
+Added: Early adoption is permitted.
+Added: The Company is currently evaluating the impact of this ASU on its interim disclosures and consolidated financial statements.
+Added: Derivatives and Hedging (Topic 815):
+Added: Hedge Accounting Improvements
+Added: In November 2025, the FASB issued ASU 2025-09 , Derivatives and Hedging (Topic 815):
+Added: Hedge Accounting Improvements , which provides targeted improvements intended to simplify the application of hedge accounting, reduce complexity and cost, and enhance the transparency of hedge-related disclosures.
+Added: The amendments in this update address certain hedge designation requirements and related documentation, provides targeted relief and clarity regarding methods and timing for assessing effectiveness, improves guidance related to accounting for modifications, and refines and eliminates certain disclosure requirements.
+Added: The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods therein.
+Added: Early adoption is permitted.
+Added: The Company is currently evaluating the impact of this ASU on its hedge accounting policies and consolidated financial statements.
+Added: Intangibles - Goodwill and Other - Internal Use Software
+Added: In September 2025, the FASB issued ASU 2025‑06 , Intangibles—Goodwill and Other—Internal-Use Software (Topic 350-40):
+Added: Targeted Improvements to the Accounting for Internal-Use Software .
+Added: 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".
+Added: It also clarifies the criteria for capitalization, which begins when both of the following occur:
+Added: (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.
+Added: The ASU permits companies to elect one of the following adoption methods to apply its amendments:
+Added: 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.
+Added: The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods.
+Added: Early adoption is permitted as of the beginning of an annual reporting period.
+Added: We are currently evaluating the adoption of this standard and its impact to the Company's consolidated financial statements and related disclosures.
+Added: Financial Instruments - Credit Losses
+Added: In July 2025, the FASB issued ASU 2025‑05 , Financial Instruments—Credit Losses (Topic 326):
+Added: 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 Accounting Standards Codification 326.
+Added: 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.
+Added: We are currently evaluating the adoption of this standard and its impact to the Company's consolidated financial statements and related disclosures.
Income Statement
1 unchanged sentence
Disaggregation of Income Statement Expenses , which is intended to improve disclosures related to certain income statement expenses of the Company.
−Removed: This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.
+Added: This ASU is effective for fiscal years
+Added: Xerox 2025 Annual Report 91
+Added: Table of Conten t s
+Added: beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted and may be applied either prospectively or retrospectively.
We are currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.
4 unchanged sentences
Accounting Standard Updates Recently Adopted:
+Added: Income Tax Disclosures
+Added: In December 2023, the FASB issued ASU 2023-09 , Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures , which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.
+Added: The amendments are effective for the Company’s annual periods beginning January 1, 2025 and should be applied either prospectively or retrospectively.
+Added: The Company has adopted this standard on a prospective basis for the year ended December 31, 2025.
+Added: Refer to Note 19 - Income and Other Taxes for additional information.
Reference Rate Reform
3 unchanged sentences
These ASUs were effective commencing with our quarter ended March 31, 2020 through December 31, 2022.
−Removed: In December 2022, the FASB issued ASU 2022-06 , Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, which deferred the sunset date of Topic 848 from December 31, 2022, to December 31,
−Removed: Xerox 2024 Annual Report 90
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: 2024, after which entities will no longer be permitted to apply the relief in Topic 848.
+Added: In December 2022, the FASB issued ASU 2022-06 , Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, which deferred the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.
This ASU did not have an impact on our financial condition, results of operations, and cash flows.
7 unchanged sentences
In September 2022, the FASB issued ASU 2022-04 , Liabilities - Supplier Finance Programs (Subtopic 405-50):
−Removed: Disclosure of Supplier Finance Program Obligations that requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations.
+Added: Disclosure of Supplier Finance Program Obligations that requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a roll forward of those obligations.
The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations.
The new standard’s requirements to disclose the key terms of the programs and information about obligations outstanding was effective for our fiscal year beginning on January 1, 2023.
−Removed: The new standard’s requirement to disclose a rollforward of obligations outstanding was effective for our fiscal year beginning on January 1, 2024.
+Added: The new standard’s requirement to disclose a roll forward of obligations outstanding was effective for our fiscal year beginning on January 1, 2024.
Refer to Note 14 - Supplementary Financial Information for the required disclosures.
−Removed: Financial Instruments
−Removed: In March 2022, the FASB issued ASU 2022-02 , Financial Instruments - Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures - Gross Write-offs.
−Removed: The amendments in this update eliminate the accounting guidance for Troubled Debt Restructurings (TDRs) by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty.
−Removed: The amendments also require disclosure of current-period gross write-offs by year of origination for financing receivables.
−Removed: The disclosure of current-period gross write-offs by year of origination is applicable for financing receivables and net investments in leases that are within the scope of ASC 326-20 , Financial Instruments - Credit Losses - Measured at Amortized Cost .
−Removed: This update was effective for our fiscal year beginning on January 1, 2023.
−Removed: The provisions of this amendment are to be applied on a prospective basis.
−Removed: Refer to Note 8 - Finance Receivables, Net for required disclosures regarding gross write-offs by vintage year.
−Removed: Government Assistance
−Removed: In November 2021, the FASB issued ASU 2021-10 , Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance.
−Removed: The update increases the transparency surrounding government assistance by requiring disclosure of 1) the types of assistance received, 2) an entity’s accounting for the assistance, and 3) the effect of the assistance on the entity’s financial statements.
−Removed: We adopted this update effective for our fiscal year beginning January 1, 2022.
−Removed: The impact of adoption was not material to our Consolidated Financial Statements.
−Removed: Impacts on future periods will depend on the amounts of government assistance received.
−Removed: Prior to the COVID-19 pandemic, the amounts of government assistance the Company received were not material and since the update is limited to increased disclosures, the adoption did not have a material impact on our financial condition, results of operations, and cash flows.
−Removed: Business Combinations
−Removed: In October 2021, the FASB issued ASU 2021-08 , Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .
−Removed: The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC Topic 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts.
−Removed: This approach differs from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value.
−Removed: We early adopted this update effective for our fiscal year beginning January 1, 2022.
−Removed: The adoption of this update did not have a material impact on the Company’s consolidated financial statements and related disclosures.
−Removed: The standard did not impact contract assets or liabilities acquired in business combinations that occurred prior to the adoption date.
Xerox 2025 Annual Report 92
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: In August 2020, the FASB issued ASU 2020-06 , Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40).
−Removed: This update simplified the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock.
−Removed: This update also amended the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and required the application of the if-converted method for calculating diluted earnings per share.
−Removed: We adopted this update effective for our fiscal year beginning January 1, 2022.
−Removed: The adoption of this update did not have a material impact on the Company’s consolidated financial statements and related disclosures.
+Added: Table of Conten t s
Other Updates
2 unchanged sentences
• Codification Improvements:
+Added: ASU 2025-12 , Codification Improvements.
+Added: This update is effective for our fiscal year beginning after December 15, 2026, as well as interim periods within that period.
+Added: Early adoption is permitted.
+Added: • Government Grants:
+Added: ASU 2025-10 , Accounting for Government Grants Received by Business Entities.
+Added: This update is effective for our fiscal year beginning after December 15, 2028, as well as interim periods within that period.
+Added: Early adoption is permitted.
+Added: • Derivatives and Hedging and Revenue from Contracts with Customers:
+Added: 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.
+Added: This update is effective for the annual period beginning after December 15, 2026, as well as interim periods within that period.
+Added: Early adoption is permitted.
+Added: • Compensation — Stock Compensation and Revenue from Contracts with Customers:
+Added: ASU 2025-04 , Compensation (Topic 718) and Revenue (Topic 606) - Amendments to SEC Paragraphs Pursuant to Clarifications to Share-Based Consideration Payable to a Customer.
+Added: This update is effective for the annual period beginning after December 15, 2026, as well as interim periods within that period.
+Added: • Business Combinations and Consolidation:
+Added: ASU 2025-03 , Business Combinations (Topic 805) and Consolidation (Topic 810) - Amendments to SEC Paragraphs Pursuant to Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity.
+Added: This update is effective for the annual period beginning after December 15, 2026, as well as interim periods within that period.
+Added: • Codification Improvements:
ASU 2024-02 , Codification Improvements - Amendments to Remove References to the Concepts Statements.
22 unchanged sentences
This update is effective for our fiscal year beginning January 1, 2024.
−Removed: • Fair Value Measurement:
−Removed: ASU 2022-03 , Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.
−Removed: This update is effective for our fiscal year beginning January 1, 2024.
−Removed: • Derivatives and Hedging:
−Removed: ASU 2022-01 , Derivatives and Hedging (Topic 815), Fair Value Hedging - Portfolio Layer Method.
−Removed: This update was effective for our fiscal year beginning January 1, 2023.
+Added: Xerox 2025 Annual Report 93
+Added: Table of Conten t s
Summary of Accounting Policies
Revenue Recognition
−Removed: We generate revenue through the sale of Print and IT hardware equipment and supplies and by providing maintenance, managed Print, Digital and IT services.
+Added: Certain disclosures within the Company’s revenue recognition policies have been expanded in the current year to reflect the broader mix of customer arrangements following recent business combinations.
+Added: These updates primarily relate to variations in bundled service arrangements where certain components may be separately contracted or billed.
+Added: The underlying revenue recognition principles applied by the Company remain unchanged, and prior period disclosures appropriately reflected the structure of arrangements existing at that time.
+Added: We generate revenue through the sale of Print equipment, IT hardware, software and supplies and from providing maintenance, managed Print, Digital, and IT services.
Revenue is measured based on the consideration specified in a contract with a customer and is recognized when we satisfy a performance obligation by transferring control of a product to a customer or in the period the customer benefits from the service.
−Removed: With the exception of our sales-type lease arrangements, our invoices to the customer, which normally have short-term payment terms, are typically aligned to the transfer of goods or as services are rendered to our customers and therefore in most cases, we recognize revenue based on our right to invoice customers.
−Removed: As a result of the application of this practical expedient for the substantial portion of our revenue, the disclosure of the value of unsatisfied performance obligations for our services is not required.
+Added: With the exception of our sales-type lease arrangements and service-type warranties, our invoices to the customer, which normally have short-term payment terms, are typically aligned to the transfer of goods or as services are rendered to our customers and therefore in most cases, we recognize revenue based on our right to invoice customers.
+Added: As a result of the application of this practical expedient, historically, our revenue was not included in the disclosures of unsatisfied performance obligations other than the amounts recorded as contract liabilities.
+Added: Certain service arrangements do not qualify for the right-to-invoice practical expedient and therefore require disclosure of unsatisfied performance obligations.
+Added: These obligations primarily relate to multi-year managed services arrangements and extended warranty contracts where revenue is recognized over time.
+Added: Unsatisfied performance obligations related to MPS contracts and multi-year service-type warranties are disclosed in Note 3 - Revenue.
Significant judgments primarily include the identification of performance obligations in our Document management services arrangements as well as the pattern of delivery for those services.
More specifically, revenue related to our products and services is generally recognized as follows:
−Removed: Revenues from the sale of equipment directly to end-user customers, including those from sales-type leases (see below), are recognized when obligations under the terms of a contract with our customer are satisfied and control has been transferred to the customer.
−Removed: For equipment placements that require us to install the product at
−Removed: Xerox 2024 Annual Report 92
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: the customer location, revenue is normally recognized when the equipment has been delivered and installed at the customer location.
−Removed: Sales of customer installable products are recognized upon shipment or receipt by the customer according to the customer's shipping terms.
+Added: Equipment and Hardware:
+Added: Revenues from the sale of equipment and IT hardware directly to end-user customers, including those from sales-type leases (see below), are recognized when obligations under the terms of a contract with our customer are satisfied and control has been transferred to the customer.
+Added: For equipment placements that require us to install the product at the customer location, revenue is normally recognized when the equipment has been delivered and installed at the customer location.
+Added: Sales of customer installable products and hardware are recognized upon shipment or receipt by the customer according to the customer's shipping terms.
Revenue from the equipment performance obligation also includes certain analyst training services performed in connection with the installation or delivery of the equipment.
3 unchanged sentences
In arrangements that include minimums, those minimums are normally set below the customer’s estimated page volumes and are not considered substantive.
−Removed: These agreements are normally sold as part of a bundled lease arrangement or through distributors and resellers.
−Removed: We account for these maintenance agreements as a single performance obligation for maintenance services being delivered in a series with delivery being measured by usage as billed to the customer.
+Added: These agreements are normally sold as part of a bundled lease arrangement, either sales-type or operating lease or through distributors and resellers.
+Added: In certain managed print services (MPS) arrangements, some components such as supplies may be separately contracted and billed, while the remaining components are billed through a negotiated fixed monthly payment.
+Added: Revenue allocations between the various deliverables in these MPS contracts are based upon standalone sales prices (SSP).
+Added: When appropriate, we account for these maintenance agreements as a single performance obligation for maintenance services being delivered in a series with delivery being measured by usage as billed to the customer.
Accordingly, revenue on these types of agreements is normally recognized as billed to the customer over the term of the agreements based on page volumes.
−Removed: Maintenance and support associated with our IT Solutions are recorded as our performance obligations are satisfied.
+Added: Maintenance and support associated with our IT Solutions are recorded as our performance obligations are satisfied, or the fixed monthly payment.
A substantial portion of our products are sold with full-service maintenance agreements.
−Removed: Accordingly, other than the product warranty obligations associated with certain of our entry level products, we do not have any significant warranty obligations, including any obligations under customer satisfaction programs.
+Added: Accordingly, other than the product warranty obligations associated with certain of our entry level products, we do not have any significant assurance-type warranty obligations, including any obligations under customer satisfaction programs.
+Added: Historically, service type warranties have not been significant for the Company.
+Added: Service type warranties, typically extended warranty agreements, provide customer protection beyond the latent defects existing at the time of the equipment sale.
+Added: Most service-type warranties involve fixed consideration and are often paid up front resulting in a contract liability, with revenue recognized on a straight-line basis over the service period, which is typically one to four years .
Service offerings:
1 unchanged sentence
In our services arrangements, the Company typically satisfies the performance obligations and recognizes revenue over time as the services are rendered.
−Removed: We generally account for these service arrangements as single performance obligations since they primarily involve the delivery of an integrated service to the customer with services being delivered in a series.
−Removed: Delivery is typically measured on an output basis such as usage and is normally consistent with the billing or invoicing to the customer.
−Removed: Revenues on unit-price or time-based contracts are recognized as work is completed to the customer.
+Added: We generally account for these service arrangements
+Added: Xerox 2025 Annual Report 94
+Added: Table of Conten t s
+Added: as single performance obligations since they primarily involve the delivery of an integrated service to the customer with services being delivered in a series.
+Added: Delivery is measured on an output basis such as usage or on a fixed monthly amount and is normally consistent with the billing or invoicing to the customer.
+Added: Revenues on unit-price or time-based contracts are recognized as services are performed.
Sales to distributors and resellers:
8 unchanged sentences
Similarly, we account for our estimates of sales returns and other allowances when sales occur based on our historical experience.
−Removed: In certain instances, we may provide lease financing to end-user customers who purchased equipment we sold to distributors or resellers.
+Added: In certain instances, we may provide lease financing to end-user customers who purchased equipment that we sold to distributors or resellers.
We are not obligated to provide financing and we compete with other third-party leasing companies with respect to the lease financing provided to these end-user customers.
−Removed: Most of our equipment has both software and non-software components that function together to deliver the equipment's essential functionality and therefore they are accounted for together as part of Equipment sales revenues.
−Removed: Software accessories sold in connection with our Equipment sales, as well as free-standing software sales, are accounted for as separate performance obligations if determined to be material in relation to the overall arrangement, which is recognized as our obligations are fulfilled.
+Added: These financing arrangements are separate from the original equipment sale, and revenue on the sale to the distributor or reseller is recognized when control transfers and is not affected by any subsequent financing provided to the end-user customer.
+Added: Most of our equipment within our Print and Other segment has both software and non-software components that function together to deliver the equipment's essential functionality and are therefore accounted for together as part of Equipment sales revenues.
+Added: Software accessories sold in connection with our Equipment sales, as well as free-standing software sales, are accounted for as separate performance obligations if determined to be material in relation to the overall arrangement, which are recognized as our obligations are fulfilled.
+Added: Software related revenue within our IT Solutions segment is recognized on a gross basis when we control the software prior to transfer to the customer and act as principal in the arrangement.
+Added: In certain arrangements, including SaaS, cloud, security software, and software support provided directly by third-party suppliers, we do not control the software or service before it is transferred or provided to the customer and therefore act as an agent.
+Added: In such arrangements, revenue is recognized on a net basis.
Supplies revenue is recognized upon transfer of control to the customer, generally upon utilization or shipment to the customer in accordance with the sales contract terms.
2 unchanged sentences
A portion of our direct sales of equipment to end-user customers are made through bundled lease arrangements which typically include equipment, services (maintenance and managed services) and financing components, where the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term.
−Removed: These arrangements also typically include an incremental, variable
−Removed: Xerox 2024 Annual Report 93
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page.
−Removed: Consistent with the guidance in ASC 842 and ASC 606, the transaction price is allocated between the lease and non-lease deliverables based on standalone selling price (SSP).
−Removed: Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services, which normally include supplies.
+Added: These arrangements also typically include an incremental, variable component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page.
+Added: In certain arrangements, some components such as supplies may be separately contracted and billed, while the remaining components are billed through a negotiated fixed monthly payment.
+Added: Consistent with the guidance in ASC 842 and ASC 606, the transaction price is allocated between the lease and non-lease deliverables based on SSP.
+Added: In certain managed print services (MPS) arrangements, some components such as supplies may be separately contracted and billed, while the remaining components are billed at a negotiated fixed monthly payment.
+Added: Revenue allocations between the various deliverables in these contracts are based upon SSP.
+Added: Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of supplies and services.
With respect to the allocation of fixed and variable consideration, we only consider the fixed payments for purposes of allocation to the lease elements of the contract.
The revenue associated with the lease element is typically recognized at a point-in-time upon transfer of control as a sales-type lease, unless the lease is accounted for as an operating lease, which will normally result in recognition over the term of the lease.
−Removed: The revenue associated with the non-lease elements are normally accounted for as a single performance obligation being delivered in a series, with delivery being measured as the usage is billed to the customer.
+Added: The revenue associated with the non-lease elements are normally accounted for as a single performance obligation being delivered in a series, with delivery being measured as the usage is billed to the
+Added: Xerox 2025 Annual Report 95
+Added: Table of Conten t s
Accordingly, revenue from these agreements is recognized in a manner consistent with the guidance for Maintenance or Managed Print services agreements.
−Removed: We establish SSP using observable inputs from standalone sales of products, as well as the prices established by management in similar transactions.
+Added: We establish SSP using observable inputs from standalone sales of products and services as well as observable market information, including pricing for similar transactions.
Based on historical sales practices and policies together with a periodic analysis, we have determined that there is not a material difference between standalone selling price and recorded sales price.
22 unchanged sentences
Refer to Note 3 - Revenue for additional information regarding revenue recognition policies with respect to contract assets and liabilities as well as contract costs.
−Removed: Xerox 2024 Annual Report 94
−Removed: Table of Contents Legal Sign-off 2.24.25
Other Significant Accounting Policies
4 unchanged sentences
The measurement and recognition of expected credit losses is based on an expected loss model and incorporates an assessment of past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends.
−Removed: The allowance of finance receivables is determined on a collective basis by year of origination through the application of projected loss rates to our different portfolios by country, which represent our portfolio segments.
+Added: The allowance for finance receivables is determined on a collective basis by year of origination through the application of projected loss rates to our different portfolios by geography, which represent our portfolio segments.
This is the level at which we develop and document our methodology to determine the allowance for credit losses.
−Removed: These projected loss rates are primarily based upon historical experience adjusted for judgments about the probable effects of relevant observable data including current and future economic conditions as well as delinquency trends, resolution rates, the aging of receivables, credit quality indicators and the financial health of specific customer classes or groups.
+Added: These projected loss rates are primarily based upon historical experience adjusted for judgments about the probable effects of relevant observable data including current and future economic conditions as well as
+Added: Xerox 2025 Annual Report 96
+Added: Table of Conten t s
+Added: delinquency trends, resolution rates, the aging of receivables, credit quality indicators and the financial health of specific customer classes or groups.
The allowance for finance receivables is inherently more difficult to estimate than the allowance for trade accounts receivable because the underlying lease portfolio has an average maturity, at any time, of approximately two to three years and contains past due billed amounts, as well as unbilled amounts.
23 unchanged sentences
Refer to Note 9 - Inventories and Equipment on Operating Leases, Net for further discussion.
−Removed: Xerox 2024 Annual Report 95
−Removed: Table of Contents Legal Sign-off 2.24.25
Land, Buildings and Equipment on Operating Leases
11 unchanged sentences
(i) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the asset, and (ii) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the asset at the inception of the lease.
−Removed: Right-of-use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.
+Added: Right-of-use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising
+Added: Xerox 2025 Annual Report 97
+Added: Table of Conten t s
+Added: from the lease.
We also assess arrangements for goods or services to determine if the arrangement contains a lease at its inception.
22 unchanged sentences
We capitalize direct costs associated with developing, purchasing or otherwise acquiring software for internal use and amortize these costs on a straight-line basis over the expected useful life of the software, beginning when the software is implemented (Internal Use Software).
−Removed: Costs incurred for upgrades and enhancements that will not result
−Removed: Xerox 2024 Annual Report 96
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: in additional functionality are expensed as incurred.
+Added: Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred.
Amounts expended for Internal Use Software are included in Cash Flows from Investing activities.
9 unchanged sentences
Goodwill is not amortized, but rather is tested for impairment annually, or more frequently whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable and an impairment loss may have been incurred.
+Added: Xerox 2025 Annual Report 98
+Added: Table of Conten t s
We assess Goodwill for impairment at least annually, or more frequently if indicators of impairment exist or if a decision is made to sell or exit a business.
1 unchanged sentence
A reporting unit is an operating segment or one level below an operating segment (a component) if the component constitutes a business for which discrete financial information is available, and segment management regularly reviews the operating results of that component.
−Removed: Consistent with the determination that we had two operating/reportable segments we determined that we had two reporting units – Print and Other, and XFS.
+Added: 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.
+Added: As such, it was determined that there are two reportable segments - Print and Other, and IT Solutions.
+Added: Prior to this change, the Company had two reportable segments - Print and Other, and Xerox Financial Services (XFS).
+Added: Refer to Note 4 - Segment and Geographic Area Reporting for additional information regarding this change.
We perform an assessment of Goodwill, utilizing either a qualitative or quantitative impairment test.
19 unchanged sentences
Refer to Note 13 - Restructuring Programs for additional information regarding the impairment of long-lived assets in connection with our restructuring programs and initiatives.
−Removed: Xerox 2024 Annual Report 97
−Removed: Table of Contents Legal Sign-off 2.24.25
Pension and Post-Retirement Benefit Obligations
9 unchanged sentences
Actual returns on plan assets are not immediately recognized in our income statement due to the delayed recognition requirement.
−Removed: In calculating the expected return on the plan asset component of our net periodic pension cost, we apply our estimate of the long-term rate of return on the plan assets that support our pension obligations, after deducting assets that are specifically allocated to Transitional Retirement Accounts (which are accounted for based on specific plan terms).
+Added: In calculating the expected return on the plan asset component of our net periodic pension cost, we apply our estimate
+Added: Xerox 2025 Annual Report 99
+Added: Table of Conten t s
+Added: of the long-term rate of return on the plan assets that support our pension obligations, after deducting assets that are specifically allocated to Transitional Retirement Accounts (which are accounted for based on specific plan terms).
For purposes of determining the expected return on plan assets, we utilize a market-related value approach in determining the value of the pension plan assets, rather than a fair market value approach.
16 unchanged sentences
The pro rata factor is computed as the percentage reduction in the projected benefit obligation due to the settlement of the participant's vested benefit.
−Removed: During 2024, the US pension plans became subject to restrictions on the portion of the benefit (50)% that can be paid as a lump sum.
−Removed: Since the portion of the benefit that cannot be paid as a lump sum is paid as an annuity, the payment of 50% of the lump sum does not relieve the pension plans of the full obligation for benefits for each respective participant electing a lump sum therefore, no settlement accounting was applied.
−Removed: These restrictions did not apply for all of 2024 and there is settlement accounting for full lump sums paid early in 2024.
+Added: During 2024, the legacy Xerox US pension plans became subject to restrictions on the portion of the benefit that can be paid as a lump sum (limited to 50%).
+Added: Since the portion of the benefit that cannot be paid as a lump sum is paid as an annuity, the payment of 50% of the lump sum does not relieve the pension plans of the full obligation for benefits for each respective participant electing a lump sum therefore, and no settlement accounting was applied.
+Added: These restrictions did not apply for all of 2024 and there is settlement accounting for full lump sums paid early in 2024, prior to restrictions.
Settlement accounting will not apply in future years for which restrictions apply.
Refer to Note 18 - Employee Benefit Plans for further information regarding our Pension and Post-Retirement Benefit Obligations.
−Removed: Xerox 2024 Annual Report 98
−Removed: Table of Contents Legal Sign-off 2.24.25
Research, Development and Engineering (RD&E)
10 unchanged sentences
dollar effects of rate changes recorded in Currency (gains) and losses within Other expenses, net together with other foreign currency remeasurements.
+Added: Xerox 2025 Annual Report 100
+Added: Table of Conten t s
Note 3 – Revenue
6 unchanged sentences
Canada 464 487 554
+Added: Latin America 274 199 246
+Added: Asia Pacific 154 54 55
Other 193 201 254
6 unchanged sentences
1,628 1,516 1,631
+Added: IT Products (2)(3)
Service arrangements (5)
12 unchanged sentences
(1) Geographic area data is based upon the location of the subsidiary reporting the revenue.
−Removed: (2) Other sales include revenues associated with hardware and software from our IT Solutions.
+Added: (2) Certain prior year amounts have been reclassified in order to conform to the current year's presentation.
+Added: (3) IT products include IT hardware and software solutions sold by the IT Solutions segment.
(4) Includes revenues from maintenance agreements on sold equipment as well as revenues associated with service agreements sold through our channel partners, as well as services revenues related to our IT Solutions.
3 unchanged sentences
Contract assets and liabilities:
−Removed: We normally do not have contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time.
−Removed: Our contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advanced billings for maintenance and other services to be performed and were approximately $ 130 and $ 132 at December 31, 2024 and 2023, respectively.
+Added: Our contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time and were $ 34 and $ 0 at December 31, 2025 and 2024, respectively.
+Added: Prior to the Lexmark Acquisition, we did not have contract assets, which are short-term in nature based on the frequency of the Company's billing cycle.
+Added: Our contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advanced billings for maintenance and other services to be performed and were $ 279 and $ 130 at December 31, 2025 and 2024, respectively.
The majority of the balance at December 31, 2025 will be amortized to revenue over approximately the next 30 months.
+Added: The following table summarizes our contract liabilities activity:
+Added: 2025 2024 2023
+Added: Balance at January 1 st
+Added: $ 130 $ 132 $ 131
+Added: Revenue recognized (1)
+Added: ( 299 ) ( 189 ) ( 183 )
+Added: Billings and customer advances 287 177 187
+Added: Foreign currency and other ( 6 ) ( 3 ) ( 3 )
+Added: Acquisition (2)
+Added: Balance at December 31 st
+Added: $ 279 $ 130 $ 132
+Added: (1) Revenue recognized related to contract liabilities included in the January 1st beginning balance was $ 111 , $ 109 , $ 107 for the years ended December 31, 2025, 2024, and 2023, respectively.
+Added: (2) Refer to Note 6 - Acquisition and Divestitures for additional information regarding the Lexmark Acquisition in 2025 and the ITsavvy Acquisition in 2024.
Xerox 2025 Annual Report 101
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
+Added: Historically, with the exception of our sales-type lease arrangements, our invoices to the customer, which normally had short-term payment terms, were typically aligned to the transfer of goods or as services were rendered to our customers and therefore in most cases we recognized revenue based on our right to invoice customers.
+Added: As a result of the application of this practical expedient for the substantial portion of our revenue, the disclosure of the value of unsatisfied performance obligations for our services was not required.
+Added: Certain service arrangements do not qualify for the right-to-invoice practical expedient and therefore require disclosure of unsatisfied performance obligations.
+Added: These obligations primarily relate to multi-year managed services arrangements and extended warranty contracts where revenue is recognized over time.
+Added: The aggregate amount of the transaction price allocated to unsatisfied performance obligations including the amounts included in contract liabilities for committed customers was $ 644 at December 31, 2025.
+Added: The Company expects to recognize revenues over the next one to five years based upon the nature of the associated agreements.
+Added: Estimated amounts are subject to change due to various factors including, but not limited to the following:
+Added: contract terminations, changes in contract scope, revised estimates, unrealized revenue adjustments, and currency fluctuations.
Contract Costs:
1 unchanged sentence
• Incremental direct costs of obtaining a contract are primarily sales commissions paid to salespeople and agents in connection with the placement of equipment with post sale services arrangements.
−Removed: These costs are deferred and amortized to Selling Expenses on a straight-line basis over the estimated contract term, which is currently estimated to be approximately four years .
+Added: These costs are deferred and amortized to Selling Expenses on a straight-line basis over the estimated contract term, which is currently estimated to be approximately five years .
• Contract fulfillment costs are costs incurred for resources and assets that will be used to satisfy our future performance obligations included in our service arrangements.
6 unchanged sentences
Amortization of customer contract costs ( 67 ) ( 64 ) ( 69 )
−Removed: ( 3 ) — ( 4 )
+Added: Acquisition (2)
Balance at December 31st, $ 163 $ 138 $ 136
1 unchanged sentence
(1) Includes currency.
+Added: (2) Includes customer contract costs related to the Lexmark Acquisition.
+Added: Refer to Note 6 - Acquisitions and Divestitures 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.
+Added: Xerox 2025 Annual Report 102
+Added: Table of Conten t s
Note 4 – Segment and Geographic Area Reporting
−Removed: Our reportable segments – Print and Other , and XFS – are aligned to how the Chief Operating Decision Maker (CODM), allocates resources and assesses performance against the Company’s key growth strategies and are consistent with how we manage the business and view the markets we serve.
−Removed: Our CODM is our Chief Executive Officer (CEO).
−Removed: Our Print and Other segment includes the sale of document systems, supplies and technical services and managed services.
+Added: Our reportable segments are aligned with how we manage the business and view the markets we serve.
+Added: 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 and Reinvention strategies.
+Added: As such, it was determined that there are two reportable segments - Print and Other and IT Solutions .
+Added: Prior to this change, the Company had determined that there were two reportable segments - Print and Other and Xerox Financial Solutions (XFS).
+Added: As a result of this change, prior period reportable segment results and related disclosures have been conformed to reflect the Company’s current reportable segments.
+Added: During 2024, the Company acquired ITsavvy Acquisition Company, Inc.
+Added: (ITsavvy), a technology infrastructure solutions provider.
+Added: As a result of this acquisition, during the first quarter of 2025, we reassessed our operating and reportable segments and determined that, based on the information provided to our CODM, as well as the CEO's management and assessment of the Company's operations, we had two operating and reportable segments - Print and Other and IT Solutions .
+Added: We also determined that there were no other businesses that met the requirements to be considered separate operating segments, including our former operating/reporting segment, XFS, whose results are now included in the Print and Other operating/reporting segment.
+Added: Our Print and Other segment includes the design, development and sale of document management systems, supplies and services, as well as associated financing and technology-related offerings, digital and print-related software products and services.
The segment also includes the delivery of managed services that involve a continuum of solutions and services that help our customers optimize their print and communications infrastructure, apply automation and simplification to maximize productivity, and ensure the highest levels of security.
−Removed: This segment also includes Digital and IT services and software.
−Removed: Our product groupings range from:
+Added: This segment also includes the Lexmark Acquisition.
+Added: 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.
+Added: Refer to Note 6 - Acquisition and Divestitures, for additional information regarding the Lexmark Acquisition.
+Added: The product groupings range from:
• “Entry” , which include A4 devices and desktop printers and multifunction devices that primarily serve small and medium workgroups/work teams.
−Removed: • “Mid-Range” , which include A3 devices that generally serve large workgroup/work teams environments as well as products in the Light Production product groups serving centralized print centers, print for pay and lower volume production print establishments.
+Added: • “Mid-Range” , which include A3 devices that generally serve large workgroup/work team environments as well as products in the Light Production product groups serving centralized print centers, print for pay and low volume production print establishments.
• “High-End” , which include production printing and publishing systems that generally serve the graphic communications marketplace and print centers in large enterprises.
1 unchanged sentence
Customers also include graphic communication enterprises as well as channel partners including distributors and resellers.
−Removed: Segment revenues also include commissions and other payments from the XFS segment for the exclusive right to provide lease financing for Xerox products.
−Removed: These revenues are reported as part of Intersegment Revenues, which are eliminated in consolidated revenues.
−Removed: The XFS segment provides global leasing solutions and currently offers leasing for direct channel customer purchases of Xerox solutions through bundled lease agreements and lease financing to end-user customers who purchase Xerox solutions through our indirect channels.
−Removed: Segment revenues primarily include financing income on sales-type leases (including month-to-month extensions) and leasing fees.
−Removed: Segment revenues also include gains/losses from the sale of finance receivables including commissions, fees on the sales of underlying equipment residuals and servicing fees.
−Removed: Xerox 2024 Annual Report 100
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: We have entered into finance receivables funding agreements with HPS Investment Partners (HPS) in the U.S., and with De Lage Landen Financial Services Canada Inc.
−Removed: (DLL) in Canada.
−Removed: Refer to Note 8 - Finance Receivables, Net for additional information regarding our finance receivables funding agreements.
−Removed: In the third quarter 2023, the Company entered into an agreement with PEAC Solutions (a subsidiary of HPS) that named PEAC as the provider of certain leasing and financial services programs for Xerox and non-Xerox equipment sold through our U.S.
−Removed: network of independent dealers and resellers.
−Removed: In the fourth quarter 2023, our partnership with PEAC Solutions was further expanded to include the transition of some XFS U.S.
−Removed: employees in risk, IT, and operations to PEAC Solutions.
−Removed: Upon completion of this transition, PEAC Solutions became the preferred financing partner, primary funder, and service provider for XBS leases in the U.S.
+Added: Our IT Solutions segment provides clients of all sizes integrated IT infrastructure solutions, delivering business outcomes through its suite of Device Lifecycle Solutions, and Managed IT Services.
+Added: The IT Solutions business leverages its professional services and engineering capabilities, along with an extensive partner ecosystem to design, develop and deliver comprehensive Network and Security Solutions, and Infrastructure and Cloud Solutions.
+Added: This segment provides services to clients in the U.S., Canada, the U.K., and Western Europe.
Segment Policy
1 unchanged sentence
The accounting policies that the Company uses to derive its segment results are substantially the same as those used by the Company in preparing its consolidated financial statements.
−Removed: The segment results include a significant level of management estimates regarding the allocation of revenues such as finance income in bundled lease arrangements and other leasing revenues and operating lease revenues embedded in our managed services contracts as well as the allocation of expenses for shared selling and administrative services.
−Removed: Accordingly, the financial results for the segments may not be indicative of the results the businesses would have on a standalone basis or what might be presented for the businesses in stand-alone financial statements.
+Added: The segment results include a significant level of management estimates regarding the allocation of expenses for shared selling, administrative and general services.
+Added: Certain administrative and general expenses, which primarily relate to corporate functions, as well as Xerox Holdings' investment in Myriad, are not allocated to either of our operating/reportable segments.
+Added: Accordingly, they are excluded from segment expenses and segment profit, and as such, the financial results for the segments may not be indicative of the results the businesses would have on a standalone basis or what might be presented for the businesses in stand-alone financial statements.
The CODM measures the performance of each segment based on several metrics, including segment revenues, significant segment expenses, and segment profit.
A segment expense is considered significant when it is material to the segment, is included in the measure of segment profit, and is included in information that is regularly provided to the CODM.
−Removed: 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.
−Removed: Segment profit is the only measure of profitability that is used by the CODM to evaluate the performance of, and to allocate resources to each segment.
−Removed: The analysis of segment expenses has been applied retrospectively to all periods presented in the financial statements.
+Added: The CODM uses segment revenues, significant segment expenses, and segment profit to evaluate the performance of, and to allocate resources to each
Xerox 2025 Annual Report 103
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
+Added: 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.
+Added: Segment profit is the only measure of profitability that is used by the CODM to evaluate the performance of, and to allocate resources to each segment.
Segment revenue, significant segment expenses, segment profit, and other selected financial information for our reportable segments was as follows:
Year Ended December 31, 2025
−Removed: 2024 2023 2022
−Removed: Print and Other XFS Total Print and Other XFS Total Print and Other XFS Total
+Added: Print and Other IT Solutions Corporate Other (1)
External revenue $ 6,272 $ 750 $ — $ 7,022
−Removed: Intersegment revenue (1)
−Removed: 71 — 71 86 — 86 90 — 90
+Added: Intersegment net revenue (2)
Total Segment net revenue $ 6,272 $ 761 $ — $ 7,033
2 unchanged sentences
$ 1,820 $ 421 $ — $ 2,241
−Removed: Cost of services, maintenance and rentals 2,536 14 2,550 2,647 17 2,664 2,662 17 2,679
−Removed: Cost of financing (3)
+Added: Cost of services, maintenance, rentals and other (4)(5)(6)
2,540 189 — 2,729
3 unchanged sentences
Intersegment expense (9)
+Added: Segment profit $ 279 $ 42 $ ( 73 ) $ 248
+Added: Interest income (10)
$ 126 $ — $ — $ 126
+Added: Interest expense (4)
+Added: Depreciation and amortization 246 2 — 248
+Added: Capital expenditures 90 1 — 91
+Added: Total Assets 9,132 691 — 9,823
+Added: Year Ended December 31, 2024
+Added: Print and Other IT Solutions Corporate Other (1)
+Added: External revenue $ 5,864 $ 357 $ — $ 6,221
+Added: Intersegment net revenue (2)
+Added: Total Segment net revenue $ 5,864 $ 358 $ — $ 6,222
+Added: Reconciliation to Segment Profit
+Added: Cost of sales (3)(4)
+Added: $ 1,357 $ 197 $ — $ 1,554
+Added: Cost of services, maintenance, rentals and other (4)(5)(6)
+Added: 2,553 103 — 2,656
+Added: Research, development and engineering expenses 191 — — 191
+Added: Selling, administrative and general expenses (7)(8)
+Added: 1,366 58 94 1,518
+Added: Intersegment expense (9)
Segment profit $ 396 $ — $ ( 94 ) $ 302
Interest income (10)
+Added: $ 151 $ — $ — $ 151
+Added: Interest expense (4)
Depreciation and amortization 201 — — 201
Capital expenditures 44 — — 44
+Added: Total Assets $ 7,649 $ 716 $ — $ 8,365
+Added: Xerox 2025 Annual Report 104
+Added: Table of Conten t s
+Added: Year Ended December 31, 2023
+Added: Print and Other IT Solutions Corporate Other (1)
+Added: External net revenue $ 6,523 $ 363 $ — $ 6,886
+Added: Intersegment revenue — — — —
+Added: Total Segment net revenue $ 6,523 $ 363 $ — $ 6,886
+Added: Reconciliation to Segment Profit
+Added: Cost of sales $ 1,556 $ 222 $ — $ 1,778
+Added: Cost of services, maintenance, rentals and other 2,706 88 — 2,794
+Added: Research, development and engineering expenses 229 — — 229
+Added: Selling, administrative and general expenses (7)
1,547 48 101 1,696
+Added: Intersegment expense — — — —
+Added: Segment profit $ 485 $ 5 $ ( 101 ) $ 389
+Added: Interest income (10)
+Added: $ 191 $ — $ — $ 191
+Added: Interest expense (6)
+Added: Depreciation and amortization 208 — — 208
+Added: Capital expenditures 37 — — 37
Total Assets $ 9,782 $ 226 $ — $ 10,008
_____________
−Removed: (1) Intersegment revenue is primarily commissions and other payments made by the XFS Segment to the Print and Other Segment for the lease of Xerox equipment placements.
−Removed: (2) Cost of sales and Cost of services, maintenance and rentals for the Print and Other Segment excludes $ 8 and $ 43 from the reduction of inventory and the cancellation of related purchase contracts as a result of the exit of certain production print manufacturing operations during the year ended December 31, 2024.
−Removed: (3) Cost of financing is Interest expense associated with allocated debt of the Company, and is fully allocated to the XFS segment in support of its Finance assets, while no interest expense is allocated to the Print and Other segment.
−Removed: (4) Includes bad debt expense for the XFS segment of $ 17 , $ 6 and $ 26 , and bad debt expense for the Print and Other segment of $ 25 , $ 22 , $ 17 for the three years ended December 31, 2024, 2023 and 2022, respectively.
−Removed: (5) The Print and Other segment excludes $ 12 of Reinvention costs and $ 7 of Transaction and related costs, net for the year ended December 31, 2024, respectively, and $ 21 related to accelerated share vesting for the year ended December 31, 2022.
−Removed: (6) Intersegment expense is primarily origination fees and commissions made by the Print and Other Segment to the XFS Segment which leases Xerox equipment to third parties.
−Removed: (7) Capital expenditures are allocated fully to the Print and Other segment since they are primarily managed and controlled through that segment, together, with related long-lived assets.
+Added: (1) Certain administrative and general expenses, which primarily relate to corporate functions, are not allocated to either of our operating/reportable segments.
+Added: (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.
+Added: (3) Excludes the impact of a charge made for inventory purchase accounting adjustments related to the Lexmark Acquisition of $ 102 year ended December 31, 2025.
+Added: Refer to Note 6 - Acquisition and Divestitures for additional information regarding the Lexmark Acquisition.
+Added: (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 $ 24 and $ 8 for the years ended December 31, 2025 and 2024, respectively, as well as the cancellation of related purchase contracts $ — and $ 43 for the years ended December 31, 2025 and 2024, respectively.
+Added: (5) Excludes the impact of fixed asset purchase accounting adjustments related to the Lexmark Acquisition of $ 29 for year ended December 31, 2025.
+Added: Refer to Note 6 - Acquisition and Divestitures for additional information regarding the Lexmark Acquisition
+Added: (6) Includes equipment financing interest expense associated with Company's financing debt, which is fully allocated to the Print and Other segment in support of its Finance assets.
+Added: No interest expense is allocated to the IT Solutions segment, as the segment has no financing debt.
+Added: (7) Includes bad debt expense for the Print and Other segment of $ 39 , $ 42 , $ 28 for the three years ended December 31, 2025, 2024 and 2023, respectively.
+Added: Bad debt expense for the IT Solutions segment was nil for the three years ended December 31, 2025, 2024 and 2023, respectively.
+Added: (8) The Print and Other segment excludes Reinvention Costs of $ 17 and $ 12 , and Transaction and related costs, net of $ 33 and $ 5 , for the years ended December 31, 2025 and 2024, respectively.
+Added: Additionally, the Print and Other segment excludes $ 25 for the year ended December 31, 2025 related to the settlement of pre-existing employment agreements as a result of the Lexmark Acquisition.
+Added: The IT Solutions segment excludes Transaction and related costs, net of $ 1 and $ 2 , for the years ended December 31, 2025 and 2024, respectively.
+Added: Refer to Note 6 - Acquisition and Divestitures for additional information regarding the Lexmark Acquisition and ITsavvy.
+Added: (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.
+Added: (10) Reflects financing income, which is included in Services, maintenance, rentals and other in the Consolidated Statements of (Loss) Income.
+Added: No interest income is allocated to the IT Solutions segment, as the segment has no finance assets.
Xerox 2025 Annual Report 105
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Selected financial information for our reportable segments was as follows:
4 unchanged sentences
Goodwill impairment (1)
+Added: — ( 1,058 ) —
Restructuring and related costs, net ( 66 ) ( 112 ) ( 167 )
Amortization of intangible assets ( 83 ) ( 73 ) ( 43 )
−Removed: PARC Donation — ( 132 ) —
−Removed: Accelerated share vesting — — ( 21 )
+Added: Reinvention-related costs ( 17 ) ( 12 ) —
+Added: Purchase Accounting Adjustment - Fixed Assets ( 29 ) — —
+Added: Purchase Accounting Adjustment - Inventory ( 102 ) — —
+Added: Settlement of pre-existing employment agreements ( 25 ) — —
+Added: Transaction-related costs ( 34 ) ( 7 ) —
Inventory-related impact - exit of certain production print manufacturing operations (2)
+Added: ( 24 ) ( 51 ) —
Divestitures 4 ( 47 ) —
−Removed: Reinvention costs ( 12 ) — —
−Removed: Transaction and related costs, net ( 7 ) — —
+Added: PARC Donation — — ( 132 )
Other expenses, net ( 360 ) ( 158 ) ( 75 )
12 unchanged sentences
Total Interest income $ 140 $ 165 $ 207
+Added: (1) For the year ended December 31, 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.
+Added: (2) Includes certain charges resulting from the exit of certain production print manufacturing operations, including inventory-related charges of approximately $ 24 and $ 8 for the years ended December 31, 2025 and 2024 respectively, as well as charges for the cancellation of related purchase contracts of $ — and $ 43 for the years ended December 31, 2025 and 2024, respectively.
Geographic Area Data
6 unchanged sentences
Canada 464 487 554 49 39
+Added: Latin America 274 199 246 106 10
+Added: Asia Pacific 154 54 55 51 2
Other areas 193 201 254 2 2
3 unchanged sentences
Xerox 2025 Annual Report 106
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 5 – Lessor
Revenue from sales-type leases is presented on a gross basis when the Company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where the Company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if any, is presented on a net basis.
−Removed: In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration and present revenue net of these costs.
+Added: In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration.
The components of lease income are as follows:
3 unchanged sentences
Revenue from sales type leases Sales $ 454 $ 706 $ 920
−Removed: Interest income on lease receivables Financing 151 191 207
−Removed: Lease income - operating leases Services, maintenance and rentals 168 161 170
−Removed: Variable lease income Services, maintenance and rentals 46 62 63
+Added: Interest income on lease receivables Services, maintenance, rentals and other 126 151 191
+Added: Lease income - operating leases Services, maintenance, rentals and other 171 168 161
+Added: Variable lease income Services, maintenance, rentals and other 38 46 62
Total Lease income $ 789 $ 1,071 $ 1,334
2 unchanged sentences
The following table summarizes the purchase price allocations for our acquisitions as of the acquisition dates.
−Removed: Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022
+Added: There were no acquisitions for the year ended 2023.
+Added: Year Ended December 31, 2025 Year Ended December 31, 2024
Weighted-Average Life Acquisitions (1)
−Removed: Weighted-Average Life Acquisitions Weighted-Average Life Acquisitions
+Added: Weighted-Average Life Acquisitions (1)
Accounts/finance receivables $ 346 $ 58
+Added: Inventories 422 4
+Added: Equipment on operating leases, net 65 —
+Added: Land, Buildings and Equipments, net 243 5
Intangible assets:
Customer relationships 10 years 530 10 years 134
−Removed: Trademarks 1 year 2 — 5 years 7
+Added: Trademarks 7 years 110 1 year 2
+Added: Technology 7 years 123 —
Other assets 441 6
1 unchanged sentence
Liabilities assumed ( 1,531 ) ( 124 )
−Removed: ( 124 ) — ( 76 )
Acquisition-related debt ( 323 ) ( 210 )
+Added: Total Acquisition, net of cash acquired $ 674 $ 161
_____________
+Added: (1) For additional details related to our 2025 and 2024 acquisition activity, see below.
+Added: (2) Our 2025 and 2024 acquisitions included approximately $ 2 and $ 42 , respectively, of goodwill that is expected to be deductible for tax purposes.
+Added: Goodwill resulting from our 2025 acquisition is allocated to the Print and Other Segment.
+Added: 2025 Acquisition
+Added: Lexmark Acquisition
+Added: On July 1, 2025, Xerox Corporation completed the acquisition of all of the issued and outstanding equity of Lexmark International II, LLC (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).
+Added: Xerox 2025 Annual Report 107
+Added: Table of Conten t s
+Added: Total Purchase Consideration
+Added: Total consideration paid to the Seller for the net assets acquired from Lexmark was $ 768 , which included Cash and cash equivalents acquired of $ 93 .
+Added: As part of the Lexmark Acquisition we effectively settled a pre-existing net payable of $ 43 with Lexmark.
+Added: The settlement is presented as an operating cash outflow to reflect the nature of the underlying net liability.
+Added: Assets Acquired and Liabilities Assumed
+Added: The transaction has been accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification (ASC) 805 — Business Combinations (ASC 805), which requires among other things, that assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date.
+Added: No contingent consideration was recorded by Xerox.
+Added: 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.
+Added: The following table summarizes the preliminary allocation of total purchase consideration to the assets acquired and the liabilities assumed as of the date of the acquisition.
+Added: Certain amounts have been updated to reflect working capital and measurement period adjustments, the impacts of which were not material to the Consolidated Statements of (Loss) Income:
+Added: Assets acquired
+Added: Cash and cash equivalents $ 93
+Added: Accounts receivable, net 280
+Added: Finance receivables, net (1)
+Added: Inventories 422
+Added: Other current assets 131
+Added: Finance receivables due after one year, net (1)
+Added: Equipment on operating lease, net 65
+Added: Land, buildings and equipment, net 243
+Added: Intangible assets, net 763
+Added: Deferred tax assets 25
+Added: Other long-term assets 266
+Added: Total Assets acquired $ 2,600
+Added: Liabilities assumed
+Added: Accounts payable $ 476
+Added: Accrued compensation and benefits costs 56
+Added: Accrued expenses and other current liabilities (2)
+Added: Long-term debt 323
+Added: Pension and other benefit liabilities 118
+Added: Post-retirement medical benefits 6
+Added: Other long-term liabilities (2)
+Added: Total Liabilities assumed $ 1,832
+Added: Net Assets acquired $ 768
_____________
−Removed: (1) For details related to our 2024 acquisition activity, refer to the "2024 Acquisition" section below.
−Removed: (2) Goodwill from 2024 and 2022 acquisitions included approximately $ 42 and $ 20 of goodwill that is expected to be deductible for tax purposes.
−Removed: Goodwill is allocated to the Print and Other Segment, the only reporting segment with Goodwill.
−Removed: (3) Liabilities assumed in 2022 acquisitions included estimated contingent consideration liabilities of approximately $ 11 .
−Removed: (4) Reflects the secured promissory notes, net of unamortized discounts, issued in connection with the acquisition of ITsavvy Acquisition Company, Inc.
−Removed: (5) Total is net of cash acquired .
+Added: (1) Comprised of sales-type lease receivables.
+Added: (2) Includes Deferred revenue accounted for in accordance with ASC 606, Revenue from Contracts with Customers .
+Added: Our estimates and assumptions are subject to change, and have already changed, within the measurement period, which is up to 12 months after the acquisition date.
+Added: During the fourth quarter 2025, adjustments were recorded to correct certain errors in the Lexmark Acquisition preliminary purchase price allocation that existed as of the acquisition date.
+Added: The errors resulted from misstated balances of accounts receivable, contract assets, and contract liabilities in Lexmark's opening balance sheet as of July 1, 2025, and were subsequently reflected in the Company's Consolidated Balance Sheet as of September 30, 2025.
+Added: Accordingly, Accounts receivable, net decreased by $ 73 , Other current assets increased by $ 20 , Deferred tax assets increased by $ 7 , Accrued expenses and other current liabilities decreased by $ 11 , and Other long-term liabilities decreased $ 7 .
+Added: The identified errors had an immaterial impact on the Lexmark preliminary purchase accounting through September 30, 2025.
+Added: As a result of the correction, an increase of $ 28 was recorded to Goodwill.
+Added: In addition, immaterial measurement period adjustments were also recorded which resulted in a further increase of $ 11 to Goodwill associated with the Lexmark Acquisition.
+Added: Xerox 2025 Annual Report 108
+Added: Table of Conten t s
+Added: The allocation of the purchase price for this acquisition has been prepared on a preliminary basis, and adjustments may continue to be required as additional information becomes available.
+Added: 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.
+Added: The final purchase price is subject to a final working capital adjustment, which we are still finalizing.
+Added: Transaction-related expense for the Lexmark Acquisition was approximately $ 33 for the year ended December 31, 2025 and were recorded within Selling, administrative and general expenses.
+Added: Our Consolidated Statements of (Loss) Income includes revenue of $ 962 , and net loss of $ 119 for the year ended December 31, 2025, attributable to the Lexmark Acquisition since the date of acquisition.
+Added: Intangible Assets
+Added: The following table is a summary of the fair value estimates of the identifiable intangible assets and their estimated average useful lives:
+Added: July 1, 2025 Estimated Useful Life
+Added: Customer relationships $ 530 10 years
+Added: Developed technology 123 7 years
+Added: Trademarks 110 7 years
+Added: Total Identifiable intangible assets $ 763
+Added: The customer-related intangible assets relates to customer contracts and related relationships.
+Added: The customer contracts and related relationships intangible asset represents the fair value of future projected cash flows that will be derived from sales of products and services to existing customers of Lexmark.
+Added: The asset was valued using a multi-period excess earnings method which estimates the present value of the after-tax cash flows attributable to the customer relationships.
+Added: The present value of projected future cash flows included significant judgment and assumptions regarding projected annual revenues based on estimated customer attrition rates, projected operating margins, and the discount rate.
+Added: 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.
+Added: 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.
+Added: Trade name and trademarks represents the estimated fair value of Lexmark’s trade name and trademarks.
+Added: The fair value was determined by applying the relief-from-royalty method under the income approach.
+Added: This method is based on the application of a royalty rate to forecasted 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.
+Added: Intangible assets of approximately $ 4 are deductible for tax purposes as a result of previous taxable acquisitions made by Lexmark.
+Added: Goodwill in the amount of $ 246 was recognized for this acquisition and is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized, primarily expected synergies.
+Added: Goodwill of approximately $ 2 is deductible for tax purposes as a result of previous taxable acquisitions made by Lexmark.
+Added: All of the goodwill associated with the Lexmark Acquisition is allocated to our Print and Other Segment.
+Added: 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.
+Added: The assumed debt is included in Long-term debt in the Consolidated Balance Sheet.
+Added: 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.
+Added: Refer to Note 15 - Debt for additional information regarding debt related to the Lexmark Acquisition.
+Added: Deferred Taxes
+Added: We provided deferred taxes and recorded other tax adjustments as part of the accounting for the acquisition primarily related to the estimated fair value adjustments for acquired intangible assets, as well as the elimination of a previously recorded deferred tax liability associated with Lexmark's historical tax deductible goodwill.
+Added: Xerox 2025 Annual Report 109
+Added: Table of Conten t s
2024 Acquisition
1 unchanged sentence
(ITsavvy), a technology infrastructure solutions provider for total consideration of $ 404 , which resulted in 100 % ownership of ITsavvy.
−Removed: The total consideration paid was $ 405 , which consisted of (i) cash payments of $ 195 , (ii) a $ 110 secured promissory note issued by Xerox to the Seller at closing (the 2025 Note), and (iii) another $ 110 secured promissory note issued by Xerox to the Seller at closing (the 2026 Note and, together with the 2025 Note, the Notes), net of unamortized debt discount of $ 10 on the Notes.
−Removed: For additional information related to the secured promissory notes issued in connection with the acquisition of ITsavvy, refer to Note 15 - Debt.
−Removed: Xerox 2024 Annual Report 104
−Removed: Table of Contents Legal Sign-off 2.24.25
Total Purchase Consideration
−Removed: The table below details the total fair value of consideration for the ITsavvy acquisition:
+Added: The table below details the total fair value of consideration paid for the ITsavvy Acquisition:
November 20, 2024
2 unchanged sentences
Total Fair value of consideration transferred $ 404
+Added: The secured promissory notes due in 2025 (the 2025 Note), as well as the secured promissory notes due in 2026 (the 2026 Note and, together with the 2025 Note, the Notes), were issued by Xerox to the Seller at closing, net of total unamortized debt discounts of $ 10 .
+Added: For additional information related to the Notes issued in connection with the acquisition of ITsavvy, refer to Note 15 - Debt.
Assets Acquired and Liabilities Assumed
1 unchanged sentence
No change-in-control or contingent consideration liabilities were recorded by Xerox.
−Removed: The following table summarizes the preliminary allocation of total purchase consideration to the assets acquired and the liabilities assumed as of the date of the acquisition:
+Added: The following table summarizes the final allocation of total purchase consideration to the assets acquired and the liabilities assumed as of the date of the acquisition.
+Added: Certain amounts have been updated to reflect working capital and measurement period adjustments, the impacts of which were not material to the Consolidated Statements of (Loss) Income and resulted in a final allocation to Goodwill of $ 288 , as compared to the original allocation of Goodwill of $ 286 at the time of acquisition:
November 20, 2024
11 unchanged sentences
Accrued compensation and benefits costs 7
−Removed: Accrued expenses and other liabilities (1)
+Added: Accrued expenses and other current liabilities (1)
Deferred tax liability 18
Other long-term liabilities (1)
−Removed: Total Liabilities acquired $ 124
+Added: Total Liabilities assumed $ 146
Net Assets acquired $ 404
−Removed: _____________
(1) Includes Deferred revenue accounted for in accordance with ASC 606 Revenue .
−Removed: The purchase price allocation for ITsavvy is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available.
−Removed: Xerox has one year from the acquisition date to finalize the purchase price allocation which may result in measurement period adjustments.
−Removed: Our Consolidated Statement of (Loss) Income for fiscal 2024 includes revenue of $ 48 and net income of $ 2 attributable to the ITsavvy acquisition since the date of acquisition.
+Added: Transaction-related expense for the ITsavvy Acquisition were not material for the year ended December 31, 2024.
+Added: For the years ended December 31, 2025 and 2024, our Consolidated Statements of (Loss) Income include revenue of $ 451 and $ 48 , respectively, and net income of $ 16 and $ 2 , respectively, attributable to the ITsavvy Acquisition.
+Added: Amounts for 2024 are from the date of acquisition on November 20, 2024.
+Added: Xerox 2025 Annual Report 110
+Added: Table of Conten t s
Intangible Assets
5 unchanged sentences
The majority of customer-related intangible assets relates to customer contracts and related relationships.
−Removed: The customer contracts and related relationships intangible asset represents the fair value of future projected revenue that will be derived from sales of products to existing customers of ITsavvy.
−Removed: The asset was valued using a multi-
−Removed: Xerox 2024 Annual Report 105
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: period excess earnings method which calculates the present value of the estimated revenues and net cash flows derived from it.
−Removed: The present value of projected future cash flows included judgment and assumptions regarding projected future revenues, projected expenses, attrition rates, and the discount rate.
+Added: The customer contracts and related relationships intangible asset represents the fair value of future projected cash flows that will be derived from sales of products to existing customers of ITsavvy.
+Added: The asset was valued using a multi-period excess earnings method which estimates the present value of the after-tax cash flows attributable to the customer relationships.
+Added: The present value of projected future cash flows included significant judgment and assumptions regarding projected annual revenues based on estimated customer attrition rates, projected operating margins, and the discount rate.
Trademark represents the preliminary estimated fair value of the ITsavvy trade name.
4 unchanged sentences
Goodwill of approximately $ 42 is deductible for tax purposes as a result of previous taxable acquisitions made by ITsavvy.
−Removed: All of the goodwill associated with the ITsavvy acquisition is related to our Print and Other Segment.
+Added: As a result of the ITsavvy Acquisition, we reassessed our operating and reportable segments on January 1, 2025.
+Added: Accordingly, all of the goodwill associated with the ITsavvy Acquisition is allocated to our IT Solutions Segment.
Deferred Taxes
We provided deferred taxes and recorded other tax adjustments as part of the accounting for the acquisition primarily related to the estimated fair value adjustments for acquired intangible assets, as well as the elimination of a previously recorded deferred tax liability associated with ITsavvy’s historical tax deductible goodwill.
−Removed: Pro Forma Information (Unaudited)
−Removed: The unaudited pro-forma results presented below include the effects of the ITsavvy acquisition as if it had been consummated as of January 1, 2023.
−Removed: The pro forma financial information for the twelve months ended December 31, 2024 combines our results for this period with the results of ITsavvy for the period beginning January 1, 2024 to November 19, 2024.
−Removed: The pro forma financial information for the twelve months ended December 31, 2023 combines our historical results for that period with the historical results of ITsavvy for that period.
+Added: Unaudited Pro Forma Information
+Added: The unaudited 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.
+Added: ITsavvy is included in our 2025 reported results as the effective date of the acquisition was November 20, 2024.
+Added: Lexmark is included in our 2025 results beginning July 1, 2025, the effective date of acquisition.
+Added: 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:
2 unchanged sentences
Net loss ( 968 ) ( 1,680 )
−Removed: The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition and the cost of financing the acquisition had taken place on January 1, 2023.
−Removed: In addition to the results of ITsavvy for the periods prior to acquisition, the pro-forma results include primarily the amortization associated with the acquired intangible assets, interest expense associated with the Notes, and expense related to certain share-based payment awards.
+Added: The unaudited 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.
+Added: Xerox 2025 Annual Report 111
+Added: Table of Conten t s
2023 Acquisitions
There were no material business acquisitions during 2023.
−Removed: 2022 Acquisitions
−Removed: During 2022, Xerox acquired two businesses that totaled $ 93 , net of cash acquired.
−Removed: In February 2022, Xerox acquired Powerland, a leading IT services provider in Canada, for approximately $ 52 (CAD 66 million), net of cash.
−Removed: The acquisition also included contingent consideration up to approximately $ 22 (CAD 28 million) based on future performance of the acquisition over the two-year period following the date of acquisition.
−Removed: Approximately $ 11 was accrued as part of the purchase price reflecting the estimated fair value payout for this element.
−Removed: During 2023 $ 6 of contingent consideration was paid, and the remaining accrual was released during 2024, as performance obligations were not met.
−Removed: The acquisition strengthened Xerox’s IT services offerings in North America, which include cloud, cybersecurity, end user computing and managed services.
−Removed: In July 2022, Xerox acquired Go Inspire, a U.K.-based print and digital marketing and communication services provider, for approximately $ 41 (GBP 34 million), net of cash.
−Removed: The acquisition strengthened Xerox’s strategy to grow its global Digital Services presence in EMEA.
−Removed: The Goodwill associated with both acquisitions is included in our Print and Other segment.
−Removed: Xerox 2024 Annual Report 106
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: Our acquisitions in 2022 resulted in 100 % ownership of the acquired companies.
−Removed: The operating results of these acquisitions were not material to our financial statements and were included within our results from the respective acquisition dates.
−Removed: The purchase prices were all cash, with the exception of the Powerland acquisition in 2022, which included a contingent consideration element.
−Removed: Revenue Impact
−Removed: Our acquisitions contributed aggregate revenues from their respective acquisition dates as follows:
−Removed: Year Ended December 31,
−Removed: Acquisition Year 2024 2023 2022
−Removed: 2024 $ 48 $ — $ —
−Removed: 2022 196 215 163
−Removed: Total Contributed Aggregate Revenue $ 244 $ 215 $ 163
−Removed: Pending Acquisition of Lexmark International II, LLC
−Removed: Equity Purchase Agreement
−Removed: On December 22, 2024, Xerox Corporation (Xerox Corporation) entered into an Equity Purchase Agreement (the Purchase Agreement) with Ninestar Group Company Limited (the Seller) and Lexmark International II, LLC (Lexmark).
−Removed: The Purchase Agreement provides, among other things, that, subject to the terms and conditions set forth therein, Xerox Corporation will purchase from the Seller all of the issued and outstanding equity securities of Lexmark.
−Removed: The Purchase Agreement provides that Xerox Corporation will acquire Lexmark for $ 1.5 billion, inclusive of net debt and other assumed liabilities, subject to certain other customary pre- and post-closing adjustments and escrow arrangements.
−Removed: The Purchase Agreement contains certain representations, warranties, and covenants of each of the parties, including covenants by Lexmark relating to the operation of Lexmark’s business prior to the closing.
−Removed: Xerox Corporation has obtained representation and warranty insurance, which provides coverage for certain breaches of representations and warranties, subject to certain terms and conditions.
−Removed: The consummation of the transaction is subject to the satisfaction or waiver of certain closing conditions, including (i) the termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and certain foreign regulatory approvals, as well as receipt of confirmation from the CFIUS Monitoring Agencies, as defined in the Purchase Agreement, that the National Security Agreement related to Lexmark will be terminated following the closing, (ii) the absence of any law or judgment preventing the closing and (iii) approval of the shareholders of Ninestar Corporation (Ninestar), a shareholder of the Seller (the Ninestar Shareholder Approval).
−Removed: The obligation to consummate the transaction by Xerox Corporation, on the one hand, and by the Seller and Lexmark, on the other hand, is also subject to the accuracy of the other’s representations and warranties contained in the Purchase Agreement (subject, with specified exceptions, to customary materiality standards) and the performance of the other’s covenants and agreements in all material respects.
−Removed: Xerox Corporation’s obligation to consummate the transaction is further subject to the condition that, since the date of the Purchase Agreement, there has not been a “Material Adverse Effect,” as defined in the Purchase Agreement, that is continuing as the date of closing.
−Removed: The parties have agreed to use certain efforts to satisfy the closing conditions and consummate the transaction as soon as practicable, including specified efforts to obtain certain regulatory approvals and confirmation from the CFIUS Monitoring Agencies required for the transaction.
−Removed: Xerox Corporation expects to close the transaction in the second half of 2025.
−Removed: The Purchase Agreement contains certain termination rights, including that either party may terminate the Purchase Agreement if (i) the transaction has not closed prior to December 22, 2025 (subject to up to three , three-month extensions at the election of either party, in each case if on such date all of the closing conditions except those relating to regulatory approvals have been satisfied or waived), (ii) a governmental entity permanently enjoins the transaction or (iii) the Ninestar Shareholder Approval is not obtained at the applicable meeting of Ninestar shareholders (the Ninestar Meeting).
−Removed: Additionally, Xerox Corporation may terminate if the Ninestar Meeting is not held within 180 days following the date of the Purchase Agreement (subject to a 90-day extension under certain conditions).
−Removed: Xerox 2024 Annual Report 107
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: The Purchase Agreement provides that, if the Purchase Agreement is terminated for failure to hold the Ninestar Meeting by the applicable deadline or for failure to obtain the Ninestar Shareholder Approval at the Ninestar Meeting, and subject to certain other conditions, Lexmark will reimburse Xerox Corporation for up to $ 30 of its documented out-of-pocket expenses.
−Removed: If the Purchase Agreement is terminated by either Xerox Corporation or the Seller under certain circumstances at a time when the requisite antitrust approvals have not been received or if the transaction is permanently enjoined pursuant to an antitrust law, subject to certain conditions, Xerox Corporation will reimburse Seller for up to $ 30 its documented out-of-pocket expenses.
−Removed: In addition, the Purchase Agreement provides that if (x) Xerox Corporation or the Seller terminates the Purchase Agreement for failure to hold the Ninestar Meeting by the applicable deadline or the Ninestar Shareholder Approval is not obtained at the Ninestar Meeting, (y) at the time of termination an alternative proposal for the acquisition of Lexmark has been made and (iii) within 18 months of termination the Seller enters into a definitive agreement with respect to such alternative acquisition proposal, Lexmark will pay Xerox Corporation $ 50 , less any expenses previously reimbursed to Xerox Corporation.
−Removed: Voting Agreement
−Removed: On December 22, 2024, in connection with the execution and delivery of the Purchase Agreement, certain Ninestar shareholders and their affiliates, solely in their respective capacities as shareholders of Ninestar, entered into that certain Irrevocable Undertaking (the Voting Agreement) with Xerox Corporation, pursuant to which each stockholder agreed, among other things, (i) to vote or cause to be vote all of the Ninestar shares they beneficially own, subject to certain exceptions (including the valid termination of the Purchase Agreement), (ii) to vote against other proposals to acquire Lexmark and (iii) to certain other restrictions on its ability to take actions with respect to Lexmark and its shares.
−Removed: The shareholders party to the Voting Agreement collectively beneficially own approximately 32.12 % of the outstanding Ninestar shares.
−Removed: Committed Debt Financing
−Removed: On December 22, 2024, Xerox Corporation and Xerox Holdings Corporation (Xerox Holdings Corporation) obtained commitments for new debt financing pursuant to (i) a commitment letter with Morgan Stanley Senior Funding, Inc., MUFG Bank, LTD., Regions Bank, Truist Bank and Citigroup Global Markets Inc.
−Removed: (together, the Incremental Commitment Parties) pursuant to which the Incremental Commitment Parties agreed to provide an approximately $ 357 senior secured incremental term loan facility (the Incremental Facility) in the form of incremental loans under Xerox Corporation’s first lien term loan agreement entered into in November 2023, among Xerox Corporation, as borrower, Xerox Holdings Corporation and certain subsidiaries of Xerox Corporation as guarantors, Jefferies Finance LLC, as administrative agent and collateral agent and the lenders party thereto (the TLB Facility), (ii) a commitment letter with DCS Finance, LLC and Christy 2017, LP (collectively, the Senior Unsecured Commitment Parties), pursuant to which the Senior Unsecured Commitment Parties agreed to provide debt financing in the form of $ 250 principal amount of senior unsecured notes to be issued by Xerox Holdings Corporation (the Senior Unsecured Notes) and (iii) a debt commitment letter with Jefferies Finance LLC and Jefferies LLC (collectively, Jefferies), pursuant to which Jefferies agreed to provide debt financing in the form of $ 250 senior unsecured notes (the SUNs) and a committed $ 550 senior secured term loan facility, in the form of an incremental facility to the TLB Facility (the Senior Secured Facility and together with the Incremental Facility, the Senior Unsecured Notes and the SUNs, the Transaction Facilities) (the Commitment Letters).
−Removed: Xerox Corporation and Xerox Holdings Corporation intend to use the proceeds of the Incremental Facility, the Senior Unsecured Notes, the Senior Secured Facility (or an equivalent amount of debt securities issued in lieu thereof) and the SUNs, together with cash on hand and drawings under Xerox Corporation’s asset-backed revolving credit facility to, among other things, fund the purchase price of all of the issued and outstanding equity securities of Lexmark pursuant to the Purchase Agreement and other amounts required to be paid by Xerox Corporation pursuant to Purchase Agreement, and to refinance $ 388 of Xerox Holdings Corporation’s 5.00 % Senior Notes due 2025.
−Removed: The funding of the Transaction Facilities, other than the Senior Secured Facility, under the Commitment Letters is contingent on the satisfaction of customary conditions, including, among others (i) execution and delivery of definitive documentation in respect of such financings in accordance with the commitment letters, and (ii) consummation of the transactions contemplated by the Purchase Agreement.
−Removed: As of December 31, 2024, Xerox accrued in Other current liabilities approximately $ 22 in commitment fees, for the commitments discussed above.
−Removed: The fees will become payable upon the closing of the financing transaction.
−Removed: Xerox 2024 Annual Report 108
−Removed: Table of Contents Legal Sign-off 2.24.25
Sales of Argentina and Chile
In March 2024, Xerox completed the sales of its direct business operations in Argentina and Chile to Grupo Datco, a technologies and fiber optic network service provider in Latin America for a total consideration of $ 19 .
−Removed: Following the transfer of ownership, the new companies will operate as independent entities and Grupo Datco will continue to service Xerox devices previously sold in Argentina and Chile and will become the exclusive partner for Xerox in these markets.
+Added: Following the transfer of ownership, the new companies operate as independent entities and Grupo Datco will continue to service Xerox devices previously sold in Argentina and Chile and is the exclusive partner for Xerox in these markets.
This transaction aligns with the Company's ongoing Reinvention.
−Removed: The sales resulted in a net disposal loss of $ 51 , which includes, a net currency translation loss of $ 40 , allocated Goodwill of $ 10 , the carrying value of the net assets of $ 18 , and related fees of $ 2 .
+Added: The sales resulted in a net disposal loss of $ 51 , which included, a net currency translation loss of $ 40 , allocated Goodwill of $ 10 , the carrying value of the net assets of $ 18 , and related fees of $ 2 .
During the second quarter of 2024 we recorded a purchase price adjustment credit of $ 3 .
2 unchanged sentences
Xerox also recorded a net income tax benefit of $ 19 related to the sales, for a net after-tax loss on the sales of $ 32 .
−Removed: Other Divestitures
−Removed: During the fourth quarter 2024 we sold the rights to sell paper in certain European countries.
−Removed: The sale resulted in a net disposal gain of $ 4 .
−Removed: This sale is not expected to materially impact current estimates of future projections with respect to results of operations or cash flows of the Company.
Donation of Palo Alto Research Center (PARC)
2 unchanged sentences
The donation also allows PARC to reach its full potential through SRI’s resources and deep-tech expertise that will enable PARC to focus exclusively on the development of pioneering innovative technologies.
−Removed: The majority of patents held by PARC will be retained by Xerox with a perpetual license to use those patents being provided to SRI.
+Added: The majority of patents held by PARC were retained by Xerox with a perpetual license to use those patents being provided to SRI.
Xerox, at its option, will also continue to receive certain research services from SRI.
2 unchanged sentences
The estimated fair values of the PARC business as well as the Print and Other reporting unit are based on estimates and assumptions that are considered Level 3 inputs under the fair value hierarchy.
−Removed: Xerox also recorded a net income tax benefit of $ 40 related to the donation for a net after-tax loss on the donation of $ 92 .
+Added: At the time of divestiture, Xerox also recorded a net income tax benefit of $ 40 related to the donation for a net after-tax loss on the donation of $ 92 .
+Added: In 2025, we concluded that certain deferred tax assets in the U.S.
+Added: were not more-likely-than-not to be realized, including the benefits associated with the charitable contribution of PARC in 2023.
+Added: Accordingly, a valuation allowance for the remaining deferred tax assets of $ 20 was recorded.
+Added: Other Divestitures
+Added: During 2025 and 2024 we sold the rights to sell paper in certain European countries.
+Added: The sales resulted in a net disposal gain of $ 4 and $ 4 for the years ended December 31, 2025 and 2024, respectively.
Xerox 2025 Annual Report 112
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 7 – Accounts Receivable, Net
3 unchanged sentences
Accounts receivable, net $ 1,122 $ 796
−Removed: (1) Accrued receivables includes amounts to be invoiced in the subsequent quarter for current services provided.
+Added: (1) Accrued receivables includes amounts to be invoiced in the subsequent quarter for current products and services provided.
The allowance for doubtful accounts was as follows:
1 unchanged sentence
Charge-offs, net ( 20 )
+Added: Recoveries and Other (1)
Balance at December 31, 2024 $ 69
Charge-offs, net ( 23 )
+Added: Acquisition (2)
+Added: Recoveries and Other (1)
Balance at December 31, 2025 $ 73
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.
+Added: (2) Reflects the Lexmark Acquisition on July 1, 2025.
+Added: Refer to Note 6 - Acquisitions and Divestitures for additional information regarding the Lexmark acquisition.
We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness.
1 unchanged sentence
Based on that assessment the allowance for doubtful accounts as a percentage of gross receivables was 6.1 % at December 31, 2025 and 8.0 % at December 31, 2024.
−Removed: The increase in the allowance is primarily due to an increase in aged receivables in the U.S.
Accounts Receivable Sale Arrangements
−Removed: We have one facility in Europe that enables us to sell accounts receivable associated with our distributor network on an ongoing basis, without recourse.
−Removed: 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.
+Added: We have two facilities in Europe that enable us to sell accounts receivable without recourse on an ongoing basis.
+Added: Under these arrangements, we sell our entire interest in the related accounts receivable for cash.
+Added: 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:
6 unchanged sentences
Xerox 2025 Annual Report 113
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 8 – Finance Receivables, Net
12 unchanged sentences
A summary of our gross finance receivables' future contractual maturities, including those previously billed, is as follows:
−Removed: 12 months $ 842 $ 1,075
+Added: December 31, 2025
12 months $ 661
2 unchanged sentences
48 months 166
−Removed: Thereafter 10 33
Total $ 1,643
6 unchanged sentences
The risk characteristics in our finance receivable portfolio segments are generally consistent with the risk factors associated with the economies of the countries/regions included in those geographies.
−Removed: Since EMEA is comprised of various countries and regional economies, the risk profile within that portfolio segment is somewhat more diversified due to the varying economic conditions among and within the countries.
+Added: 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.
The net bad debt provision was $ 16 for the year ended December 31, 2025.
6 unchanged sentences
Xerox 2025 Annual Report 114
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
The allowance for credit losses as well as the related investment in finance receivables were as follows:
Allowance for Credit Losses:
−Removed: United States Canada EMEA Total
+Added: United States Canada EMEA Other Total
Balance at December 31, 2023 $ 58 $ 7 $ 27 $ — $ 92
1 unchanged sentence
Charge-offs, net ( 23 ) ( 11 ) ( 17 ) — ( 51 )
+Added: 1 ( 1 ) ( 1 ) — ( 1 )
Balance at December 31, 2024 $ 29 $ 5 $ 23 $ — $ 57
1 unchanged sentence
Charge-offs, net ( 12 ) ( 3 ) ( 16 ) — ( 31 )
−Removed: 1 ( 1 ) ( 1 ) ( 1 )
Balance at December 31, 2025 $ 24 $ 5 $ 16 $ — $ 45
6 unchanged sentences
(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.
+Added: (2) As a result of the Lexmark Acquisition on July 1, 2025, Other includes amounts for Latin America, Asia Pacific and South Africa.
+Added: for doubtful credit losses in Other for the year ended December 31, 2025 was nil .
+Added: Refer to Note 6 - Acquisitions and Divestitures for additional information regarding the Lexmark acquisition.
(3) Total Finance receivables exclude the allowance for credit losses of $ 45 and $ 57 at December 31, 2025 and 2024, respectively.
5 unchanged sentences
These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance.
−Removed: Loss rates in this category in the normal course are generally less than 1 %.
+Added: Loss rates in this category in the normal course are generally in the range of 1 % to 2 %
• Average Credit Risk:
11 unchanged sentences
Xerox 2025 Annual Report 115
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Details about our finance receivables portfolio based on geography, origination year and credit quality indicators are as follows:
24 unchanged sentences
Charge-offs $ 5 $ 3 $ 7 $ 4 $ 1 $ — $ 20
+Added: Low Credit Risk 7 4 3 1 — — 15
+Added: Average Credit Risk — 1 1 — — — 2
+Added: High Credit Risk — — — — — — —
+Added: Total $ 7 $ 5 $ 4 $ 1 $ — $ — $ 17
+Added: Charge-offs $ — $ — $ — $ — $ — $ — $ —
Total Finance Receivables
4 unchanged sentences
Total Charge-offs $ 5 $ 5 $ 15 $ 11 $ 4 $ 3 $ 43
+Added: _____________
+Added: (1) As a result of the Lexmark Acquisition on July 1, 2025, includes amounts for Latin America, Asia Pacific and South Africa.
Xerox 2025 Annual Report 116
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
December 31, 2024
29 unchanged sentences
Total Charge-offs $ 2 $ 23 $ 11 $ 8 $ 5 $ 7 $ 56
−Removed: Xerox 2024 Annual Report 114
−Removed: Table of Contents Legal Sign-off 2.24.25
The aging of our receivables portfolio is based upon the number of days an invoice is past due.
Receivables that are more than 90 days past due are considered delinquent.
−Removed: Receivable losses are charged against the allowance when management believes the uncollectibility of the receivable is confirmed and is generally based on individual credit evaluations, results of collection efforts and specific circumstances of the customer.
+Added: Receivable losses are charged against the allowance when management believes the uncollectability of the receivable is confirmed and is generally based on individual credit evaluations, results of collection efforts and specific circumstances of the customer.
Subsequent recoveries, if any, are credited to the allowance.
1 unchanged sentence
However, interest revenue for such billings is only recognized if collectability is deemed probable.
+Added: Xerox 2025 Annual Report 117
+Added: Table of Conten t s
The aging of our billed finance receivables is as follows:
9 unchanged sentences
8 1 1 10 653 663 17
+Added: — — — — 17 17 —
Total $ 33 $ 9 $ 7 $ 49 $ 1,398 $ 1,447 $ 56
8 unchanged sentences
Canada 5 1 1 7 137 144 5
−Removed: 7 2 1 10 1,132 1,142 10
+Added: EMEA 5 1 1 7 902 909 15
Total $ 35 $ 8 $ 7 $ 50 $ 1,752 $ 1,802 $ 55
−Removed: Sales of Receivables
−Removed: The Company has expanded the finance receivables funding agreement with an affiliate of HPS Investment Partners (HPS) pursuant to which the Company agreed to offer for sale, and HPS agreed to purchase, certain eligible pools of finance receivables, on a monthly basis, in transactions structured as "true sales at law," and bankruptcy remote transfers.
−Removed: We have received an opinion to that effect from outside legal counsel.
−Removed: Accordingly, the receivables sold are derecognized from our financial statements and HPS does not have recourse back to the Company for uncollectible receivables.
−Removed: 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.
−Removed: The Company retains a first right of refusal to repurchase the underlying equipment at the end of the lease term, to the extent offered for sale by HPS, at its then fair value.
−Removed: In January 2024, we entered into a new agreement with HPS to transfer the servicing of the majority of funding activity to HPS as well as extend the existing term for five years .
−Removed: This agreement automatically renews for a one-year period unless terminated by either the Company or HPS.
−Removed: Xerox will be required to pay a specified fee to service the Company’s retained receivables.
−Removed: Xerox will continue to service the lease receivables from prior service arrangements with HPS for a specified fee.
−Removed: In October 2024, the Company entered into a finance receivables funding agreement with De Lage Landen Financial Services Canada Inc.
−Removed: (DLL), pursuant to which the Company can offer for sale, and DLL may purchase, certain eligible pools of finance receivables structured as “true sales at law” and bankruptcy remote transfers and we have received an opinion to that effect from outside counsel.
−Removed: This finance receivables funding agreement has an initial term of five years , with automatic one-year extensions thereafter, unless terminated by either the Company or DLL.
−Removed: 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.
−Removed: If the portfolio performs above a certain level of incremental service, a fee can be earned annually.
−Removed: Xerox 2024 Annual Report 115
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: During 2024, the Company received proceeds of approximately $ 100 (CAD 139 million) related to the sales of lease receivables under this finance receivables funding agreement with DLL.
+Added: (1) As a result of the Lexmark Acquisition on July 1, 2025, includes amounts for Latin America, Asia Pacific and South Africa .
+Added: Sales of Finance Receivables
+Added: The Company has finance receivables funding arrangements with third-party funding partners in the U.S., Canada, and in EMEA.
+Added: Under these arrangements, the Company sells certain eligible pools of finance receivables.
+Added: The transfers are structured to qualify for sale accounting treatment and the related receivables are derecognized from the Company's consolidated financial statements.
+Added: The Company's funding partners generally do not have recourse to the Company for credit losses on the transferred receivables.
+Added: In addition, under certain arrangements, the Company may transfer servicing responsibilities for funded receivables to a funding partner.
+Added: In such cases, the Company pays a servicing fee related to certain retained finance receivables and may continue to service certain finance receivables under prior servicing arrangements with that funding partner for an agreed-upon fee.
Finance receivable sales activity was as follows:
7 unchanged sentences
(1) Cash proceeds were reported in Net cash provided by operating activities.
−Removed: (2) Recorded in Services, maintenance and rentals as Other Revenue.
+Added: (2) Recorded in Services, maintenance, rentals and other as Other Revenue.
Amounts include revenues associated with the sale of the underlying leased equipment.
−Removed: (3) The years ended December 31, 2024 and 2023 includes $ 4 and $ 4 of revenues associated with the sale of the underlying leased equipment and which are expected to be paid over the term of the agreements.
Secured Borrowings and Collateral
−Removed: We sold certain finance receivables to consolidated special purpose entities included in our Consolidated Balance Sheet as collateral for secured loans.
+Added: Prior to 2025, we sold certain finance receivables to consolidated special purpose entities included in our Consolidated Balance Sheet as collateral for secured loans.
+Added: During 2025, we fully repaid the outstanding balance related to these secured borrowings.
Refer to Note 15 - Debt, for additional information related to these arrangements.
+Added: Xerox 2025 Annual Report 118
+Added: Table of Conten t s
Note 9 – Inventories and Equipment on Operating Leases, Net
4 unchanged sentences
Total Inventories $ 1,016 $ 695
−Removed: _____________
−Removed: (1) Finished goods at December 31, 2024 includes a reduction of approximately $ 7 , related to the exit of certain production print manufacturing operations.
−Removed: (2) Raw materials at December 31, 2024 includes a reduction of approximately $ 38 , related to the exit of certain production print manufacturing operations.
The transfer of equipment from our inventories to equipment subject to an operating lease is presented in our Consolidated Statements of Cash Flows in the operating activities section.
4 unchanged sentences
Equipment on operating leases, net $ 299 $ 245
−Removed: Xerox 2024 Annual Report 116
−Removed: Table of Contents Legal Sign-off 2.24.25
Depreciable lives generally vary from four to five years consistent with our planned and historical usage of the equipment subject to operating leases.
Estimated minimum future revenues associated with Equipment on operating leases are as follows:
−Removed: 12 months $ 131 $ 165
−Removed: 24 months 70 89
−Removed: 36 months 45 52
−Removed: 48 months 25 30
+Added: December 31, 2025
12 months $ 135
−Removed: Thereafter — 2
−Removed: Total $ 280 $ 351
Total contingent rentals on operating leases, consisting principally of usage charges in excess of minimum contracted amounts, for the years ended December 31, 2025, 2024 and 2023 amounted to $ 38 , $ 46 and $ 62 , respectively.
−Removed: Secured Borrowings and Collateral
−Removed: We sold the rights to payments under operating leases to a consolidated special purpose entity included in our Consolidated Balance Sheet as collateral for a secured loan.
−Removed: Refer to Note 15 - Debt, for additional information related to this arrangement.
+Added: Xerox 2025 Annual Report 119
+Added: Table of Conten t s
Note 10 - Land, Buildings, Equipment and Software, Net
1 unchanged sentence
Estimated Useful Lives (Years) 2025 2024
+Added: Land $ 24 $ 8
Building and building equipment 25 to 50
14 unchanged sentences
Internal Use Software
−Removed: As of December 31, 2024 and 2023, capitalized costs related to internal use software, net of accumulated amortization, were $ 60 and $ 68 , respectively.
+Added: Additions to internal use software were $ 54 , $ 17 , and $ 8 for the three years ended December 31, 2025, 2024 and 2023, respectively.
+Added: As of December 31, 2025 and 2024, capitalized costs related to internal use software, net of accumulated amortization, were $ 146 and $ 60 , respectively, and are included in Other long-term assets.
Useful lives of our internal use software generally vary from three to seven years .
+Added: Refer to Note 14 - Supplementary Financial Information for additional information.
Xerox 2025 Annual Report 120
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 11 – Lessee
2 unchanged sentences
Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations.
−Removed: Our leases have remaining terms of up to ten years and a variety of renewal and/or termination options.
+Added: 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:
14 unchanged sentences
Total Operating lease liabilities $ 327 $ 188
+Added: _____________
+Added: (1) During 2025, the Company modified a lease agreement for electric vehicles, which resulted in a change in the lease classification from financing to operating.
+Added: Accordingly, we remeasured the right of use asset and the corresponding lease liability .
Supplemental information related to operating leases is as follows:
7 unchanged sentences
19.29 % 7.70 % 6.07 %
+Added: _____________
(1) Includes the impact of new leases as well as remeasurements and modifications to existing leases.
+Added: (2) Increase in 2025 rate reflects the increase in the Company's incremental borrowing rate, as well as the remeasurement of the leases associated with the Lexmark Acquisition.
Maturities and additional information related to operating lease liabilities are as follows:
1 unchanged sentence
12 months $ 122
+Added: Thereafter 296
Total Lease payments 696
2 unchanged sentences
Xerox 2025 Annual Report 121
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Finance Leases
1 unchanged sentence
and Europe, as well as for vehicles and related infrastructure, within outsourced warehouse supply arrangements, in the U.S.
−Removed: These leases have remaining maturities up to five years .
+Added: These leases have remaining maturities up to six years .
The lease expense associated with our finance leases was $ 13 , $ 13 , and $ 8 for the three years ended December 31, 2025, 2024 or 2023, respectively.
5 unchanged sentences
Total Finance lease liabilities $ 8 $ 53
+Added: (1) During 2025, the Company modified a lease agreement for electric vehicles, which resulted in a change in the lease classification from financing to operating.
+Added: Accordingly, we remeasured the right of use asset and the corresponding lease liability.
Supplemental information related to finance leases is as follows:
2 unchanged sentences
Cash paid for amounts included in the measurement of lease liabilities $ 13 $ 12 $ 8
−Removed: Right-of-use assets obtained in exchange for new lease liabilities (1)
−Removed: $ 42 $ 7 $ 12
+Added: Finance lease assets obtained in exchange for new lease liabilities (1)
Weighted-average remaining lease term 2 years 4 Years 2 Years
3 unchanged sentences
Maturities and additional information related to finance lease liabilities are as follows:
−Removed: 12 months $ 19 $ 9
−Removed: 24 months 15 6
−Removed: 36 months 12 3
−Removed: 48 months 11 1
+Added: December 31, 2025
12 months $ 6
−Removed: Thereafter — —
Total Lease payments 9
2 unchanged sentences
Xerox 2025 Annual Report 122
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 12 - Goodwill, Net and Intangible Assets, Net
Goodwill, Net
−Removed: The following table presents the changes in the carrying amount of Goodwill, net:
−Removed: 2024 2023 2022
−Removed: Goodwill $ 3,940 $ 4,013 $ 4,068
−Removed: Accumulated impairment losses ( 1,193 ) ( 1,193 ) ( 781 )
−Removed: Goodwill, net at January 1 $ 2,747 $ 2,820 $ 3,287
−Removed: Goodwill Activity:
+Added: On January 1, 2025, we reassessed our operating and reportable segments and determined that the Company's operations had two operating and reportable segments - Print and Other and IT Solutions .
+Added: We also determined that there were no other businesses that met the requirements to be considered separate operating or reportable segments.
+Added: As a result of this change, the carrying amount of Goodwill, net was reassessed and was allocated to our two reporting units - Print and Other and IT Solutions , based on the relative fair value of each reporting unit.
+Added: As part of the reassessment it was determined that Goodwill was not impaired either before or after the resegmentation.
+Added: Prior to this reassessment, all Goodwill was allocated to our Print and Other reporting unit.
+Added: T he following presents the changes in the carrying amount of Goodwill, net:
+Added: Print and Other 2025
+Added: Gross Goodwill - January 1st $ 3,808
+Added: Foreign currency translation 91
+Added: Gross Goodwill - December 31st $ 4,146
+Added: Accumulated impairment - January 1st $ ( 2,245 )
+Added: Impairment loss —
+Added: Currency ( 57 )
+Added: Accumulated impairment - December 31st $ ( 2,302 )
+Added: Goodwill, net - December 31 st
+Added: IT Solutions 2025
+Added: Gross Goodwill - January 1st $ 374
+Added: Foreign currency translation 2
+Added: Gross Goodwill - December 31st $ 378
+Added: Accumulated impairment - January 1st $ —
+Added: Impairment loss —
+Added: Accumulated impairment - December 31st $ —
+Added: Goodwill, net - December 31 st
+Added: Total Xerox 2025 2024 2023
+Added: Gross Goodwill - January 1st $ 4,182 $ 3,940 $ 4,013
Foreign currency translation - Gross 93 ( 29 ) 47
Acquisitions (1) :
−Removed: Acquisition 286 — —
+Added: Lexmark 246 — —
+Added: ITsavvy 2 286 —
Acquisitions — — 5
−Removed: Canada Acquisition — — 34
Dispositions (2)
— ( 16 ) ( 125 )
−Removed: Goodwill impairment ( 1,058 ) — ( 412 )
+Added: Gross Goodwill - December 31st $ 4,524 $ 4,182 $ 3,940
+Added: Accumulated impairment - January 1st $ ( 2,245 ) $ ( 1,193 ) $ ( 1,193 )
+Added: Impairment loss — ( 1,058 ) —
Foreign currency translation - Impairment ( 57 ) 6 —
−Removed: Goodwill $ 4,182 $ 3,940 $ 4,013
−Removed: Accumulated impairment losses ( 2,245 ) ( 1,193 ) ( 1,193 )
−Removed: Goodwill, net at December 31 $ 1,937 $ 2,747 $ 2,820
+Added: Accumulated impairment - December 31st $ ( 2,302 ) $ ( 2,245 ) $ ( 1,193 )
+Added: Goodwill, net - December 31 st
$ 2,222 $ 1,937 $ 2,747
−Removed: (1) 2024 primarily relates to our acquisition of ITsavvy.
−Removed: Refer to Note 6 - Acquisitions and Divestitures for additional information related to acquisitions.
−Removed: (2) 2024 primarily includes the write off of $ 10 of Goodwill associated with the sales of our business operations in Argentina and Chile, as well as other immaterial dispositions.
−Removed: 2023 primarily includes the write-off of $ 115 of Goodwill associated with the donation of our Palo Alto Research Center (PARC).
−Removed: Refer to Note 6 - Acquisitions and Divestitures for additional information related to the sales of our operations in Argentina and Chile and the PARC donation.
−Removed: Total Goodwill is fully allocated to the Print and Other segment and no Goodwill has been allocated to the XFS segment for the three years ended December 31, 2024, 2023 or 2022, respectively.
−Removed: In the third quarter of 2024, we concluded that a quantitative test of Goodwill was required.
−Removed: Based on that test, we determined that the estimated fair value of the Print and Other reporting unit (the only reporting unit with Goodwill) had declined below its carrying value and, as a result, we recognized an after-tax non-cash impairment charge of $ 1,015 ($ 1,058 pre-tax) related to our Goodwill for the year ended December 31, 2024.
−Removed: In the third quarter of 2022, we concluded that an interim impairment test of Goodwill was required.
+Added: _____________
+Added: (1) 2025 activity reflects the acquisition of Lexmark, as well as measurement period adjustments for ITsavvy.
+Added: Refer to Note 6 - Acquisitions and Divestitures for additional information related to acquisitions of Lexmark and ITsavvy.
+Added: (2) Reflects the write off of $ 10 of Goodwill associated with the sales of our business operations in Argentina and Chile, as well as other immaterial dispositions during 2024, and the write-off of $ 115 of Goodwill associated with the donation of our Palo Alto Research Center (PARC) during 2023.
+Added: Refer to Note 6 - Acquisitions and Divestitures for additional information related to these dispositions.
+Added: Xerox 2025 Annual Report 123
+Added: Table of Conten t s
+Added: During 2024, we concluded that a quantitative test of Goodwill was required.
Based on that test, we determined that the estimated fair value of the Print and Other reporting unit (the only reporting unit with Goodwill) had declined below its carrying value and, as a result, we recognized an after-tax non-cash impairment charge of $ 1,015 ($ 1,058 pre-tax) related to our Goodwill for the year ended December 31, 2024.
−Removed: The estimated fair value of the Print and Other reporting unit, for all periods discussed above, is based on estimates and assumptions that are considered Level 3 inputs under the fair value hierarchy.
+Added: The estimated fair value of the Print and Other and IT Solutions reporting units, for all periods discussed above, is based on estimates and assumptions that are considered Level 3 inputs under the fair value hierarchy.
Intangible Assets, Net
−Removed: Intangible assets, net were $ 236 at December 31, 2024, all of which relate to our Print and Other segment.
+Added: Intangible assets, net were $ 921 at December 31, 2025.
+Added: Approximately, $ 778 related to our Print and Other segment and $ 143 related to our IT Solutions segment.
+Added: Approximately $ 163 of Intangible assets, net were allocated to the IT Solutions segment on January 1, 2025, the date that we reassessed our operating and reportable segments.
Intangible assets were comprised of the following:
6 unchanged sentences
Amortization Net
−Removed: Customer relationships 10 years $ 324 $ 106 $ 218 $ 200 $ 92 $ 108
−Removed: Distribution network 25 years 123 123 — 123 118 5
−Removed: Trademarks 11 years 38 20 18 209 147 62
+Added: Customer relationships (1)
+Added: 10 years $ 856 $ 163 $ 693 $ 324 $ 106 $ 218
+Added: Distribution network (1)
+Added: 25 years 123 123 — 123 123 —
+Added: Trademarks (1)
+Added: 8 years 142 28 114 38 20 18
Technology and non-compete 7 years 135 21 114 12 12 —
Total Intangible Assets $ 1,256 $ 335 $ 921 $ 497 $ 261 $ 236
−Removed: Excluding the impact of future acquisitions, amortization expense is expected to approximate $ 36 in 2025, 2026, 2027, and 2028, respectively, and $ 33 in 2029.
−Removed: Trademark assets are expected to be fully amortized by 2029.
−Removed: Xerox 2024 Annual Report 120
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: (1) 2025 and 2024 balances reflect the acquisitions of Lexmark and ITsavvy, respectively.
+Added: Refer to Note 6 - Acquisitions and Divestitures for additional information related to acquisitions of Lexmark and ITsavvy.
+Added: Excluding the impact of future acquisitions, amortization expense is expected to approximate $ 123 in 2026, 2027, 2028, 2029 and 2030, respectively .
Note 13 – Restructuring Programs
−Removed: In connection with our Reinvention and other transformative programs, we engage in restructuring actions in order to reduce our cost structure and realign it to the changing nature of our business.
−Removed: As part of our efforts to reduce costs, our restructuring actions may also include the off-shoring and/or outsourcing of certain operations, services and other functions, the exit from certain product lines and geographies, as well as reducing our real estate footprint.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Refer to Note 6 - Acquisitions and Divestitures for additional information related to the Lexmark Acquisition.
Restructuring and related costs, net reflect the following components for the three years ended December 31, 2025, 2024 and 2023:
5 unchanged sentences
Total Restructuring and related costs, net $ 66 $ 112 $ 167
−Removed: Restructuring charges, net primarily includes employee severance costs and other contractual termination costs that may result from restructuring actions and initiatives.
−Removed: In those geographies where we have either a formal severance plan or a history of consistently providing severance benefits representing a substantive plan (on-going benefit arrangements), we recognize employee severance and associated costs when they are both probable and reasonably estimable and is the primary accounting treatment applied for most of our Restructuring actions.
−Removed: Severance payments made under a one-time benefit arrangement are recorded upon communication to the affected employees.
−Removed: In the event employees are required to perform future service beyond their minimum retention period in a one-time benefit arrangement, we record severance charges ratably over the remaining service period of those employees as restructuring related costs.
−Removed: Contractual termination costs, including facility exit costs, are generally recognized when it has been determined that a liability has been incurred.
+Added: _____________
+Added: (1) Impairments are net of cash receipts.
+Added: Restructuring charges, net primarily include employee severance costs and other contractual termination costs resulting from restructuring actions and initiatives.
+Added: In those geographies where the Company has a formal severance plan or a history of consistently providing severance benefits representing a substantive on-going benefit arrangement, employee severance and related costs are accounted for in accordance with ASC 712 and are recognized when the obligation is both probable and reasonably estimable.
+Added: Severance payments provided under one-time benefit arrangements related to restructuring activities are accounted for in accordance with ASC 420 and are recognized when the Company has communicated the termination plan to the affected employees, the benefits are fixed or determinable, and the Company does not have the ability to withdraw the offer.
+Added: To the extent employees are required to render future service beyond a minimum retention period, severance costs are recognized ratably over the future service period as restructuring related costs.
+Added: Contractual termination costs, including facility exit
+Added: Xerox 2025 Annual Report 124
+Added: Table of Conten t s
+Added: costs and other contract termination costs, are recognized when a liability has been incurred in accordance with applicable accounting guidance.
Asset impairment charges, net primarily include impairments that may result from employee reductions, migration of facilities from higher-cost to lower-cost countries, and the consolidation of facilities, and is net of any gains we may realize on the disposal of those assets.
Restructuring activities may also include the disposal or abandonment of assets, including leased right-of-use assets, that require an acceleration of depreciation or an impairment charge reflecting the excess of an asset's book value over fair value or other recoveries.
−Removed: Restructuring related costs also include severance costs paid in connection with contractual outsourcing arrangements as well as professional support services associated with our business transformation initiatives.
−Removed: The recognition of restructuring and related costs requires that we make certain judgments and estimates regarding the nature, timing and amount of costs associated with planned initiatives.
+Added: Restructuring related costs include severance costs paid in connection with contractual outsourcing arrangements as well as professional support services associated with our business transformation initiatives.
+Added: The recognition of restructuring and related costs requires the Company to make certain judgments and estimates regarding the nature, timing and amount of costs associated with planned initiatives.
To the extent our actual results differ from our estimates and assumptions, we may be required to revise the estimated liabilities, requiring the recognition of additional restructuring costs or the reduction of liabilities already recognized.
At the end of each reporting period, we evaluate the remaining accrued balances to ensure they are properly stated, and the utilization of the reserves are for their intended purpose in accordance with developed exit plans.
−Removed: Xerox 2024 Annual Report 121
−Removed: Table of Contents Legal Sign-off 2.24.25
Restructuring Charges, Net
−Removed: Restructuring charges, net primarily relate to the Print and Other segment as amounts related to the XFS segment were immaterial for all periods presented.
+Added: Restructuring charges, net primarily relate to the Print and Other segment as amounts related to the IT Solutions segment were immaterial for all periods presented.
A summary of our restructuring program activity for the three years ended December 31, 2025, 2024 and 2023 is as follows:
−Removed: Costs Other Contractual
+Added: Severance Cost Prior Actions Severance Costs Reinvention Severance Costs Integration Other Contractual
Termination Costs (2)
3 unchanged sentences
Net Current Period Charges (1)
+Added: 10 104 — — 114
Charges against reserve and currency ( 24 ) — — ( 4 ) ( 28 )
3 unchanged sentences
Net Current Period Charges (1)
+Added: ( 4 ) 63 — 3 62
Charges against reserve and currency ( 16 ) ( 63 ) — ( 3 ) ( 82 )
3 unchanged sentences
Net Current Period Charges (1)
+Added: ( 3 ) ( 9 ) 89 5 82
Charges against reserve and currency ( 1 ) ( 52 ) ( 12 ) — ( 65 )
1 unchanged sentence
_____________
−Removed: (1) Represents net amount recognized within the Consolidated Statements of (Loss) Income for the years shown for restructuring.
−Removed: Reversals of prior charges primarily include net changes in estimated reserves from prior period initiatives.
+Added: (1) Represents net amount recognized within the Consolidated Statements of (Loss) Income for the years shown for restructuring charges.
+Added: Reversals of prior charges primarily include net changes in estimated reserves from prior period initiatives accrued for in prior periods, including Reinvention and Integration.
(2) Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual termination costs.
+Added: We expect that the majority of these costs reserved for in 2025 will be paid upon the exercise of an early termination clause in 2027 .
+Added: At December 31, 2025, we expect to pay $ 67 of the restructuring reserve over the next twelve months.
The following table summarizes the reconciliation to the Consolidated Statements of Cash Flows:
4 unchanged sentences
Charges against reserve and currency $ ( 65 ) $ ( 82 ) $ ( 28 )
+Added: Xerox 2025 Annual Report 125
+Added: Table of Conten t s
Asset Impairment Charges, Net
1 unchanged sentence
Impairments are net of any potential sublease income or other recovery amounts.
−Removed: Charges incurred during 2024 includes impairments associated with strategic actions taken as a result of the Company's Reinvention, including geographic simplification.
+Added: In connection with strategic actions taken as a result of the Company's Reinvention, 2025 activity included the impairment of an operating lease ROU asset, as well as the sales of facilities in the U.S.
+Added: and Europe, while 2024 primarily related to impairments associated with geographic simplification.
2023 activity includes the impairment associated with the Company's sale of its Russian Subsidiary, which was completed in October 2023 and the impairment associated with the Company's sale of its Xerox Research Center of Canada (XRCC), the Canadian research division of Xerox, to Myant Capital Partners, which was completed in July 2023.
5 unchanged sentences
Asset impairments 27 27 36
−Removed: Gain on sales of owned assets (2)
Adjustments/Reversals (3)
−Removed: Net asset impairment charge (credit) $ 25 $ 32 $ ( 6 )
9 ( 2 ) ( 4 )
−Removed: (1) Primarily related to the exit and abandonment of leased and owned facilities, net of any potential sublease income and recoveries.
−Removed: (2) Reflect gain on the sales of exited surplus facilities and land.
−Removed: Xerox 2024 Annual Report 122
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Proceeds from the sales of owned assets (4)
+Added: Net asset impairment (credit) charge $ ( 15 ) $ 25 $ 32
+Added: _____________ _
+Added: (1) Primarily related to the exit and abandonment of leased facilities, net of recoveries and any potential sublease income.
+Added: (2) Primarily related to the exit and abandonment of owned facilities.
+Added: (3) Reflects adjustment and reversals of impairments taken in prior periods.
+Added: (4) Reflects proceeds on the sales of exited surplus facilities and land.
Related Cost, Net
13 unchanged sentences
Xerox 2025 Annual Report 126
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 14 - Supplementary Financial Information
6 unchanged sentences
Advances and deposits 14 17
+Added: Contract assets and other deferred contract costs 47 2
Total Other Current Assets $ 362 $ 212
23 unchanged sentences
Total Accrued Expenses and Other Current Liabilities (4)
+Added: $ 1,258 $ 784
Other Long-term Liabilities
4 unchanged sentences
Restructuring reserves 59 23
+Added: Unearned income 109 19
Total Other Long-term Liabilities $ 685 $ 386
6 unchanged sentences
Xerox 2025 Annual Report 127
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Cash, Cash Equivalents and Restricted Cash
−Removed: Restricted cash primarily relates to escrow cash deposits made in Brazil associated with ongoing litigation as well as cash collections on finance receivables that were pledged for secured borrowings.
+Added: Restricted cash primarily relates to escrow cash deposits made in Brazil associated with ongoing litigation.
As more fully discussed in Note 20 - Contingencies and Litigation, various litigation matters in Brazil require us to make cash deposits to escrow as a condition of the continuing litigation.
8 unchanged sentences
Cash, cash equivalents and restricted cash $ 565 $ 631
−Removed: __________________________
−Removed: (1) Includes collections on finance receivables pledged for secured borrowings or receivables sold that will be remitted in the following month.
Restricted cash is reported in the Consolidated Balance Sheets as follows:
2 unchanged sentences
Total Restricted cash $ 53 $ 55
−Removed: Summarized Cash Flow Information
+Added: Supplemental Cash Flow Information
Summarized cash flow information is as follows:
17 unchanged sentences
Preferred stock dividends - Xerox Holdings Financing ( 14 ) ( 14 ) ( 14 )
−Removed: Payments to noncontrolling interests Financing ( 2 ) ( 2 ) ( 1 )
−Removed: Investment from noncontrolling interests Financing — — 6
Repurchases related to stock-based compensation - Xerox Holdings Financing ( 6 ) ( 10 ) ( 8 )
+Added: Payments to noncontrolling interests Financing ( 2 ) ( 2 ) ( 2 )
+Added: Proceeds from issuance of warrants Financing 11 — —
+Added: Commitment fees Financing ( 22 ) — —
+Added: Finance lease obligations payment Financing ( 10 ) ( 10 ) ( 7 )
__________________________
(1) Provision for receivables includes adjustments for customer accommodations and contract terminations of $ 1 , $ 2 , and $ 8 for the three years ended December 31, 2025, 2024 and 2023, respectively.
−Removed: (2) Amortization of patents is reported in (Increase) decrease in other current and long-term assets on the Consolidated Statements of Cash Flows.
−Removed: (3) Amortization of customer contract costs is reported in (Increase) decrease in other current and long-term assets on the Consolidated Statements of Cash Flows.
+Added: (2) Amortization of patents is reported in Decrease (increase) in other current and long-term assets on the Consolidated Statements of Cash Flows.
+Added: (3) Amortization of customer contract costs is reported in Decrease (increase) in other current and long-term assets on the Consolidated Statements of Cash Flows.
Refer to Note 3 - Revenue - Contract Costs for additional information.
Xerox 2025 Annual Report 128
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Supplier Finance Programs
6 unchanged sentences
Activity related to the Company's supplier finance program is as follows:
+Added: 2025 2024 2023
Balance at January 1st, $ 30 $ 40 $ 40
15 unchanged sentences
Xerox 2025 Annual Report 129
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Long-term debt was as follows:
4 unchanged sentences
Senior Notes due 2028 5.50 % 5.40 % 750 750
+Added: Senior Notes due 2029 8.88 % 8.88 % 500 500
+Added: Senior Notes due 2030 13.00 % 13.00 % 250 —
Convertible Senior Notes due 2030 3.75 % 3.75 % 400 400
1 unchanged sentence
Xerox Corporation
−Removed: Senior Notes due 2024 3.80 % 3.84 % $ — $ 300
Term Loan B due 2029 (2)(3)
4 unchanged sentences
— % 5.53 % 110 110
+Added: Senior Secured Notes due 2030 (2)
+Added: 10.25 % 10.50 % 400 —
+Added: Senior Secured Notes due 2031 (2)
+Added: 13.50 % 14.16 % 500 —
Senior Notes due 2035 4.80 % 4.84 % 250 250
2 unchanged sentences
Xerox - Other Subsidiaries (2)
−Removed: United States $ — $ 102
−Removed: France 70 182
Subtotal Xerox - Other Subsidiaries $ 3 $ 70
8 unchanged sentences
_____________
−Removed: (1) Represents the weighted average effective interest rate, which includes the effect of discounts and imputed interest on issued debt.
+Added: (1) Represents the weighted average effective interest rate, which includes the effect of discounts, premiums and imputed interest on issued debt.
(2) Represent secured borrowings of Xerox Corporation and its Other subsidiaries.
Refer to the Secured Borrowings and Collateral section below for additional information regarding the secured borrowings of Other subsidiaries, which are secured by finance receivables.
+Added: (3) The stated rate and the weighted average interest rate for the TLB is SOFR plus a margin of 4.00 %, which is the option selected by Xerox per the terms of the agreement.
+Added: Refer to the Term Loan B Credit Facility discussion below for additional information on the TLB.
Scheduled principal payments due on our long-term debt for the next five years and thereafter are as follows:
8 unchanged sentences
(2) Represents subsidiaries of Xerox Corporation.
−Removed: Secured Promissory Notes
−Removed: In connection with Xerox's acquisition of ITsavvy Acquisition Company, Inc.
−Removed: (ITsavvy), Xerox issued two , non-interest bearing, secured promissory notes (the 2025 Note and the 2026 Note, or the Notes).
−Removed: Each of the Notes has a principal amount of $ 110 .
−Removed: The 2025 Note has a maturity date of October 8, 2025, and the 2026 Note has a maturity date of January 30, 2026.
−Removed: Pursuant to the 2025 Note, Xerox must pay the seller $ 27.50 within five business days of each of January 1, 2025, April 1, 2025, July 1, 2025, and October 1, 2025.
−Removed: To the extent not previously paid, each of the Notes shall be paid in full in cash on their respective maturity date.
−Removed: We recorded the non-interest-bearing promissory notes at their present value in our Consolidated Financial Statements.
−Removed: The total amount recorded was $ 210 , and was net of unamortized debt discount of $ 10 .
−Removed: At December 31, 2024, the 2025 Note was recorded in Short-term debt and the current portion of long-term debt, while the 2026 Note was recorded in Long-term debt in our Consolidated Balance Sheet.
−Removed: Notwithstanding the foregoing, the Notes will be subject to prepayment in the event of a “Disposition Event,” as defined in each of the Notes, and customary
+Added: We have entered into transactions, and continue to seek opportunities to reduce our borrowings in a cost and cash efficient manner, including strategies to retire debt that has recently traded at significant discounts.
+Added: Refer to Note 26 - Subsequent Events, for additional information.
Xerox 2025 Annual Report 130
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: events of default.
−Removed: Each of the Notes are subordinated in lien priority to certain outstanding indebtedness of Xerox.
−Removed: Each of the Notes are secured by a security interest in substantially all of the assets of Xerox Holdings Corporation (Holdings), Xerox and certain U.S.
−Removed: and Canadian subsidiaries of Xerox.
−Removed: Holdings and certain U.S.
−Removed: and Canadian subsidiaries of Xerox are guarantors under each of the Notes.
−Removed: For additional information related to our acquisition of ITsavvy , refer to Note 6 - Acquisitions and Divestitures.
−Removed: In March 2024, Xerox Holdings Corporation issued $ 500 of 8.875 % Senior Notes due in 2029 (the 2029 Notes) at par, resulting in net proceeds (after fees and expenses) of approximately $ 495 .
−Removed: The 2029 Notes are senior unsecured obligations of Xerox Holdings Corporation and are fully and unconditionally guaranteed on a senior unsecured basis by Xerox Corporation and certain other wholly owned domestic restricted subsidiaries of the Company.
−Removed: The 2029 Notes and the related guarantees were issued in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
−Removed: Interest is payable semi-annually in arrears on May 30th and November 30th of each year, beginning on November 30, 2024.
−Removed: Xerox Holdings Corporation may, at its option, redeem some or all of the 2029 Notes at varying prices based on the timing of the redemption.
−Removed: The indenture governing the 2029 Notes contains covenants that, among other things, limit the ability of Xerox Holdings Corporation and the ability of its restricted subsidiaries to incur or guarantee additional indebtedness, pay dividends or make other restricted payments, prepay, redeem or repurchase certain subordinated debt, issue certain preferred stock or similar equity securities, make loans and investments, sell or otherwise dispose of assets, incur liens, enter into transactions with affiliates, enter into agreements restricting its subsidiaries’ ability to pay dividends, and consolidate, merge or sell all or substantially all assets.
−Removed: Additionally, if Xerox Holdings Corporation experiences a Change of Control Triggering Event (as defined in the indenture governing the 2029 Notes), Xerox Holdings Corporation is required to offer to repurchase the 2029 Notes at 101 % of the principal amount of such notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.
−Removed: Debt issuance costs of approximately $ 5 were paid and deferred in connection with the issuance of the 2029 Notes, and will be amortized over the term of the 2029 Notes.
−Removed: Refer to the Use of Aggregate Proceeds from Senior Notes section below for additional information regarding the use of net proceeds.
−Removed: Convertible Senior Notes and Capped Call
−Removed: Convertible Senior Notes
−Removed: In March 2024, Xerox Holdings Corporation issued an aggregate $ 400 of 3.75 % Convertible Senior Notes due in 2030 (the 2030 Notes).
−Removed: The 2030 Notes are senior unsecured obligations of Xerox Holdings Corporation and are fully and unconditionally guaranteed by Xerox Corporation and Xerox Business Solutions, LLC.
−Removed: The 2030 Notes were issued in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
−Removed: Interest is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2024, and the 2030 Notes will mature on March 15, 2030, unless earlier converted, redeemed or repurchased.
−Removed: The net proceeds from this offering were approximately $ 390 , after deducting the debt issuance costs.
−Removed: Debt issuance costs of approximately $ 10 were paid and deferred in connection with the issuance of the 2030 Notes, and will be amortized over the term of the 2030 Notes.
−Removed: Refer to the Use of Aggregate Proceeds from Senior Notes section below for additional information regarding the use of net proceeds.
−Removed: Holders of the 2030 Notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2029 only under the following circumstances:
−Removed: (i) during any fiscal quarter commencing after the fiscal quarter ending on March 31, 2024 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the applicable conversion price on each applicable trading day;
−Removed: (ii) during the five consecutive trading day period after any ten consecutive trading day period (the measurement period) in which the trading price (as determined in accordance with the indenture governing the 2030 Notes) per $1,000 principal amount of 2030 Notes, as determined following a request by a holder or holders of the 2030 Notes, for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company's common stock and the applicable conversion rate on each such trading day;
−Removed: (iii) if the Company calls any, or all of the 2030 Notes for redemption, but only with respect to the Notes called (or deemed called) for redemption;
−Removed: (iv) if the Company elects to distribute to all or substantially all holders of common stock any rights, options or warrants (other than in connection with a stockholder rights plan) entitling them, for a period of not more than 45 calendar days from the declaration date for such distribution, to subscribe for or purchase shares of Company's common stock at a price per share that is less than the average of
+Added: Table of Conten t s
+Added: Senior Secured and Unsecured Notes
+Added: Xerox Corporation
+Added: On April 11, 2025, Xerox Corporation and Xerox Issuer Corporation, a wholly-owned subsidiary of Xerox Corporation (Escrow Issuer), completed a private offering of (i) $ 400 aggregate principal amount of 10.250 % Senior Secured First Lien Notes due 2030 at 99 % of par (the First Lien Notes) issued by Xerox Corporation, and (ii) $ 400 aggregate principal amount of 13.500 % Senior Secured Second Lien Notes due 2031 at 98 % of par (the Second Lien Notes, issued and together with the First Lien Notes, the Notes) issued by the Escrow Issuer.
+Added: The Company received net proceeds (after discount, fees and expenses) on the issuance of the First Lien Notes of $ 366 , and net proceeds of $ 392 (after discount) on the issuance of the Second Lien Notes.
+Added: The net proceeds of the Second Lien Notes were deposited into an escrow account upon the issuance of the Second Lien Notes and were released upon the consummation of the Lexmark Acquisition.
+Added: On May 9, 2025, the Escrow Issuer issued an additional $ 100 of the Second Lien Notes at 95 % of par.
+Added: Net proceeds (after discounts, fees and expenses) were approximately $ 93 .
+Added: The net proceeds were deposited into the escrow account, as well as $ 1 of accrued and unpaid interest, and a deposit of $ 2 by Xerox Corporation.
+Added: On July 1, 2025, approximately $ 494 was released from escrow (including accrued interest) to fund a portion of the Lexmark Acquisition.
+Added: An additional $ 15 of commitment and underwriting fees were paid upon the release of the proceeds from escrow.
+Added: Upon consummation of the Lexmark Acquisition, the Escrow issuer was merged into Xerox Corporation and Xerox Corporation assumed the Second Lien Notes.
+Added: 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.
+Added: Net proceeds from the offering of the Second Lien Notes were used 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.
+Added: 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.
+Added: Bank Trust Company, National Association, as trustee and collateral agent (the First Lien Notes Agent).
+Added: 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 Xerox Holdings Corporation, Xerox Corporation (as successor to the Escrow Issuer), certain of Xerox Corporation’s domestic and foreign subsidiaries and U.S.
+Added: Bank Trust Company, National Association, as trustee and collateral agent (the Second Lien Notes Agent).
+Added: The First Lien Notes mature on October 15, 2030 and bear interest at a rate of 10.250 % per annum.
+Added: The Second Lien Notes bear interest at a rate of 13.500 % per annum.
+Added: The First Lien Notes are unconditionally guaranteed on a senior secured basis by Xerox Holdings Corporation and certain of Xerox Corporation’s domestic and foreign subsidiaries (including, following the completion of the Lexmark Acquisition, Lexmark and certain of its domestic and foreign subsidiaries).
+Added: Subject to certain exceptions and permitted liens, the First Lien Notes are secured by security interests in substantially all of the assets of the guarantors of the First Lien Notes (the Collateral) on a first-priority basis by the Collateral that is Fixed Asset Collateral (as defined in the First Lien Indenture) and on a second-priority basis by the Collateral that is Current Asset Collateral (as defined in the First Lien Indenture).
+Added: Subject to certain exceptions and permitted liens, the Second Lien Notes are secured by security interests in the same Collateral as the First Lien Notes, but on a second-priority basis by the Collateral that is Fixed Asset Collateral (as defined in the Second Lien Indenture) and on a third-priority basis by the Collateral that is Current Asset Collateral (as defined in the Second Lien Indenture).
+Added: The Indentures contain customary affirmative and negative covenants governing dividends, investments, debt, liens, and other matters of default.
+Added: Xerox Holdings Corporation
+Added: On July 1, 2025, Xerox Holdings Corporation completed an offering of (i) $ 125 aggregate principal amount of 13.00 % Senior Unsecured Notes due June 2026 (the 2026 Notes), and ii) $ 250 aggregate principal amount of 13.00 % Senior Notes due July 2030 (the 2030 Notes).
+Added: Xerox Holdings Corporation received net proceeds (after discount, fees and expenses) on issuance of the 2026 Notes of approximately $ 116 , and net proceeds on the
Xerox 2025 Annual Report 131
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: the last reported sale price of common stock for the ten consecutive trading date period ending on, and including, the trading day immediately preceding the declaration date for such distribution or distribute to all, or substantially all holders of common stock, our assets, debt securities or rights to purchase our securities, which distribution has a per share value, as reasonably determined by our Board of Directors or a committee thereof, exceeding 10 % of the last reported sale price of the Company's common stock on the trading day immediately preceding the declaration date for such distribution;
−Removed: or (v) upon the occurrence of specified corporate events (as determined in accordance with the indenture governing the 2030 Notes).
−Removed: On or after December 15, 2029, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2030 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.
−Removed: As of December 31, 2024, none of the conditions permitting the holders of the 2030 Notes to convert their notes early had been met.
−Removed: Therefore, the 2030 Notes are classified as long-term debt.
−Removed: The initial conversion rate is 47.99 shares of the common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $ 20.84 per share of the common stock.
−Removed: The conversion rate will be subject to adjustment under certain circumstances.
−Removed: In connection with certain corporate events or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their notes in connection with such corporate event or during the relevant redemption period.
−Removed: Upon conversion of the 2030 Notes, the Company must pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of the Company's common stock, or a combination of cash and shares of the Company's common stock, at the Company's election in respect of the remainder, if any, of the Company's conversion obligation in excess of the aggregate principal amount of the notes being converted.
−Removed: We may not redeem the 2030 Notes prior to September 20, 2027.
−Removed: The Company may redeem for cash all or any portion of the notes, at our option, on or after September 20, 2027, if the last reported sale price of the Company's common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
−Removed: No sinking fund for the notes has been provided.
−Removed: If the Company undergoes a fundamental change (as defined in the indenture governing the 2030 Notes), holders may require the Company to repurchase for cash all or any portion of their 2030 Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
−Removed: The indenture governing the 2030 Notes includes customary covenants, sets forth certain events of default after which the notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company after which the notes become automatically due and payable.
−Removed: The indenture governing the 2030 Notes does not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by us or any of our subsidiaries.
−Removed: In connection with the issuance of the 2030 Notes (see Convertible Senior Notes above), the Company entered into privately negotiated capped call transactions (the Capped Calls) with certain of the initial purchasers of the 2030 Notes or their respective affiliates (the option counterparties) at a cost of approximately $ 23 .
−Removed: The Capped Calls cover, subject to anti-dilution adjustments, the number of shares of the Company's common stock initially underlying the 2030 Notes.
−Removed: By entering into the Capped Calls, we expect to reduce the potential dilution to the Company's common stock (or, in the event a conversion of the 2030 Notes is settled in cash, to reduce our cash payment obligation) in the event that at the time of conversion of the 2030 Notes the trading price of our common stock price exceeds the conversion price of the 2030 Notes.
−Removed: 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.
−Removed: The Capped Calls were recorded in Additional paid-in capital in the Consolidated Balance Sheet as of December 31, 2024, with no remeasurement in subsequent periods as it meets the conditions for equity classification.
−Removed: The purchases of the Capped Calls resulted
+Added: Table of Conten t s
+Added: issuance of the 2030 Notes of approximately $ 245 .
+Added: In connection with the issuance of the 2030 Notes, Xerox Holdings Corporation issued a pre-funded warrant with a fair value of approximately $ 11 (as of the date of the issuance).
+Added: Refer to Note 22 - Shareholders' Equity for additional information regarding the issuance of the pre-funded warrant.
+Added: The 2026 Notes mature on June 30, 2026 and provide the option for Xerox Holdings Corporation (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 2026 Notes outstanding after the payment on the scheduled maturity date).
+Added: The 2026 Notes bear interest at a rate of 13.00 % per annum.
+Added: During the extension period, the 2026 Notes will continue to bear interest at 13.00 % per annum.
+Added: The 2026 Notes are governed by an indenture, dated as of July 1, 2025 (the 2026 Notes Indenture), among Xerox, Xerox Holdings Corporation, the guarantors party thereto and U.S.
+Added: Bank Trust Company, National Association, as trustee.
+Added: The 2026 Notes are unconditionally guaranteed on an unsecured basis by Xerox Corporation and certain of Xerox’s domestic and foreign subsidiaries.
+Added: 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.
+Added: 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.
+Added: The 2030 Notes mature on July 31, 2030 and initially bear interest at a rate equal to 13.00 % per annum.
+Added: 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.
+Added: Step-Up Date Interest Rate Step-Up
+Added: July 1, 2026 13.500 %
+Added: July 1, 2027 14.000 %
+Added: October 1, 2027 14.125 %
+Added: January 1, 2028 14.250 %
+Added: April 1, 2028 14.500 %
+Added: July 1, 2028 14.750 %
+Added: October 1, 2028 15.000 %
+Added: January 1, 2029 15.250 %
+Added: April 1, 2029 15.500 %
+Added: July 1, 2029 15.750 %
+Added: October 1, 2029 16.000 %
+Added: January 1, 2030 16.250 %
+Added: April 1, 2030 16.500 %
+Added: July 1, 2030 16.750 %
+Added: The 2030 Notes are governed by an Indenture, dated as of July 1, 2025 (the 2030 Notes Indenture), among Xerox Corporation, the guarantors party thereto and U.S.
+Added: Bank Trust Company, National Association, as trustee.
+Added: The 2030 Notes are unconditionally guaranteed on an unsecured basis by Xerox Corporation and certain of Xerox Corporation’s domestic and foreign subsidiaries (including, following the completion of the Lexmark Acquisition, Lexmark and certain of its domestic and foreign subsidiaries).
+Added: Each of the 2026 Notes Indenture and the 2030 Notes Indenture contains customary affirmative and negative covenants governing dividends, investments, debt, liens, and other matters and events of default.
+Added: Net proceeds of the 2030 Notes offering were used 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.
+Added: Net proceeds of the 2026 Notes offering are being used for general corporate purposes including, without limitation, funding the realization of synergies associated with the Lexmark Acquisition.
+Added: Refer to the Debt section of Note 6 - Acquisitions and Divestitures, for additional information regarding the Lexmark Acquisition.
Xerox 2025 Annual Report 132
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: in a tax benefit of approximately $ 6 , the impact of which was included in Additional paid-in capital.
−Removed: Refer to Note 17 - Shareholders' Equity of Xerox Holdings for additional information regarding the Capped Calls.
−Removed: Use of Aggregate Proceeds from Senior Notes
−Removed: A portion of the aggregate net proceeds from the Senior Note offerings was used to fund the cost of entering into the Capped Call transactions (see Convertible Senior Notes above).
−Removed: Additionally, a portion of the aggregate net proceeds were used to repay, through a tender offer for Senior Notes, approximately $ 84 of the 3.80 % Xerox Corporation Senior Notes due in 2024 and approximately $ 362 of the 5.00 % Xerox Holdings Corporation Senior Notes due in 2025.
−Removed: The remaining outstanding 3.80 % Senior Notes of $ 216 , that were not redeemed as part of the Senior Notes tender offer, were repaid in May 2024.
−Removed: In connection with the repayment of the 2024 and 2025 Senior Notes, we recorded a gain on the extinguishment of the debt of approximately $ 4 , which was partially offset by a loss of approximately $ 1 on the write-off of deferred debt issuance costs.
−Removed: The net gain on the extinguishment of $ 3 was recorded in Other expenses, net.
−Removed: Xerox Holdings Corporation/Xerox Corporation Intercompany Loan
−Removed: In March 2024, Xerox Holdings Corporation and Xerox Corporation entered into two intercompany loan agreements which mirror the terms of Xerox Holdings Corporation's 2029 and 2030 Senior Notes, including principal, interest rates, payment dates and debt issuance costs of approximately $ 15 (see the Senior Notes and the Convertible Senior Notes sections above).
−Removed: As a result, Xerox Corporation recorded approximately $ 900 of related party debt.
−Removed: The proceeds of this new intercompany loan were used to partially pay down approximately $ 362 on the existing 2020 intercompany loan made by Xerox Holdings Corporation to Xerox Corporation.
−Removed: At December 31, 2024 and 2023, the balance of the Intercompany Loan reported in Xerox Corporation’s Consolidated Balance Sheet was $ 2,022 and $ 1,497 , respectively, which is net of related debt issuance costs, and the intercompany interest payable was $ 31 and $ 30 , respectively.
+Added: Table of Conten t s
+Added: Term Loan B Credit Facility
+Added: In November 2023, Xerox Corporation, as borrower, Xerox Holdings Corporation, and certain of Xerox Corporation’s subsidiaries, as guarantors, entered into a first lien term loan credit agreement with Jefferies Finance LLC, as administrative agent and collateral agent (the TLB Agent), and a syndicate of lenders providing for a first lien senior secured term loan credit facility (the TLB Facility) to Xerox Corporation of $ 550 , which was fully extended as term loans to Xerox Corporation at closing.
+Added: The term loans under this facility included an aggregate original issue discount (OID) of $ 17 and debt issuance costs of $ 9 resulting in net proceeds of approximately $ 524 .
+Added: The OID and debt issuance costs were accordingly deferred and are amortized over the term of the Loans.
+Added: On July 1, 2025, Xerox Corporation made an incremental term loan borrowing of approximately $ 327 (Incremental Term Loans) under the TLB Facility.
+Added: 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 .
+Added: 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.
+Added: Refer to the Debt section of Note 6 - Acquisitions and Divestitures, for additional information regarding the Lexmark Acquisition and the TLB Facility.
+Added: As a result of sales of finance receivables during the third quarter 2025, approximately $ 41 of the TLB Facility was repaid in October 2025.
+Added: Refer to Note 8 - Finance Receivables, Net for additional information regarding our sales of finance receivables.
+Added: Xerox Corporation’s obligations under the TLB Facility are supported by, guarantees from the Company and certain of Xerox Corporation’s U.S., Canadian, German, Belgium, and English subsidiaries, and security interests in substantially all of the assets of the Company, and such U.S., Canadian and English subsidiaries (subject to certain exceptions and limitations set forth in the TLB Facility), and security interests in the finance lease receivables of such German and Belgium subsidiaries.
+Added: Liens in favor of the lenders or holders, as applicable, under the TLB, the ABL, the First Lien Notes, the Second Lien Notes and the ITsavvy Notes are subject to intercreditor agreements with the TLB Agent, ABL Agent, the First Lien Notes Agent, the Second Lien Notes Agent and ITsavvy Holdings, LLC, as the representative for the holders of the ITsavvy Notes.
+Added: At Xerox Corporation’s election, the term loans will bear interest at a per annum rate of either:
+Added: (1) a fluctuating rate equal to the highest of (A) a rate of 0.5 % in excess of the “NYFRB” rate, (B) the “prime rate” and (C) a rate of 1.0 % in excess of one-month Term SOFR, plus an applicable margin of 3.00 %, or
+Added: (2) Term SOFR for a one-, three- or six-month interest period or (as agreed to by the Agent and the Lenders) such other period, as selected by the Company (provided that such rate shall not be less than 0.50 %), plus an applicable margin of 4.00 %, for Term SOFR term loans, or 3.00 % for ABR term loans.
+Added: There are $ 706 of term loans outstanding at December 31, 2025.
+Added: Currently, $ 406 of the term loans bears interest at an average rate of 7.73 %, $ 175 bears interest at an average rate of 7.67 % through Mar 31, 2026, and the remaining $ 125 of the term loans bears interest at an average rate of 7.72 % through January 31, 2026, at which time the interest rate will reset based on Xerox Corporation’s elections.
+Added: The remaining term loans are repayable in full at maturity in November 2029 and amortize at a quarterly rate of 7.50 % per annum in 2026 and 10 % per annum thereafter.
+Added: If an event of default occurs under the TLB Facility, the entire principal amount outstanding thereunder, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable, subject, in certain instances, to the expiration of applicable cure periods.
+Added: The TLB Facility also contains customary excess cash flow and asset sale mandatory prepayments, reporting covenants and negative covenants governing dividends, investments, debt, liens, and other matters that are customary for similar term loan B facilities.
+Added: In October 2025, Lexmark and certain of its domestic and foreign subsidiaries became guarantors under the TLB Facility.
+Added: Refer to the Debt section of Note 6 – Acquisitions and Divestitures, for additional information regarding the Lexmark Acquisition.
Revolving Credit Facility
−Removed: In May 2023, Xerox Corporation, as borrower, and certain of its subsidiaries, as guarantors, entered into a five-year asset-based revolving credit agreement (the ABL Facility) with Citibank, N.A., as administrative agent and collateral agent (the ABL Agent) and several lenders including Citibank N.A.
−Removed: The aggregate outstanding principal amount of the ABL Facility is payable in full at maturity on May 22, 2028, and there are no scheduled principal payments prior to maturity.
−Removed: We deferred approximately $ 7 of debt issuance costs in connection with the ABL Facility, which are being amortized over the five-year term.
−Removed: In February 2024, the Company, Xerox Holdings Corporation and the Administrative Agent entered into an amendment in connection with the delivery of additional guarantees and collateral under the ABL Facility as a result of the Company’s execution of the TLB, which constituted Material Springer Debt (as defined in the ABL Facility), and the execution of certain guarantees by subsidiaries of the Company in connection with the TLB.
+Added: In May 2023, Xerox Corporation, as borrower, Xerox Holdings Corporation and certain subsidiaries of Xerox Corporation, as guarantors, entered into a five-year asset-based revolving credit agreement (the ABL Facility) with Citibank, N.A., as administrative agent and collateral agent (the ABL Agent) and several lenders including Citibank N.A.
+Added: The aggregate outstanding principal amount of the ABL Facility is payable in full at maturity on the earlier of May 22, 2028, and date that is 91 days prior to the final scheduled maturity date of any Material Springer Debt (as defined in the ABL Facility), and there are no scheduled principal payments prior to maturity.
+Added: Xerox 2025 Annual Report 133
+Added: Table of Conten t s
+Added: approximately $ 7 of debt issuance costs in connection with the ABL Facility, which are being amortized over the five-year term.
+Added: In February 2024, the Company, Xerox Holdings Corporation and the Administrative Agent entered into an amendment in connection with the delivery of additional guarantees and collateral under the ABL Facility as a result of the Company’s execution of the TLB Facility, which constituted Material Springer Debt (as defined in the ABL Facility), and the execution of certain guarantees by subsidiaries of the Company in connection with the TLB.
In June 2024, Xerox Corporation and Xerox Holdings Corporation, entered into Amendment No.
4 unchanged sentences
The ABL Facility also includes a $ 100 letter of credit subfacility.
−Removed: Xerox Corporation's borrowings under the ABL Facility are supported by guarantees from Xerox Holdings Corporation and certain of Xerox Corporation's U.S., Canadian, German, Belgian and English subsidiaries, and by security interests in substantially all of the assets of Xerox Corporation, Xerox Holdings Corporation, and such U.S., Canadian and English subsidiaries (subject to certain exceptions and limitations set forth in the TLB), and all finance lease receivables of such German and Belgian subsidiaries.
−Removed: Xerox 2024 Annual Report 130
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Xerox Corporation's borrowings under the ABL Facility are supported by guarantees from Xerox Holdings Corporation and certain of Xerox Corporation's U.S., Canadian, German, Belgian and English subsidiaries, and by security interests in substantially all of the assets of Xerox Corporation, Xerox Holdings Corporation, and such U.S., Canadian and English subsidiaries (subject to certain exceptions and limitations set forth in the TLB Facility), and all finance lease receivables of such German and Belgian subsidiaries.
At Xerox Corporation’s election, the loans under the amended ABL Facility will bear interest at either:
3 unchanged sentences
The applicable margin for Term SOFR loans from 1.5 % to 2.0 % depending on the Company’s average daily excess availability.
−Removed: At December 31, 2024, there were no borrowings under the ABL Facility, and approximately $ 2 of letters of credits were issued under the facility.
−Removed: During 2024, maximum borrowings under the ABL Facility were $ 130 .
The amended ABL Facility requires the Company to comply with a fixed charge coverage ratio of 1x, as defined in the ABL Facility, measured as of the last day of each fiscal quarter during which excess availability is less than an amount equal to the greater of (A) $ 31.875 and (B) 10 % of the Line Cap (the lesser of the aggregate amount of revolving commitments and the then-applicable borrowing base).
Based on the excess availability at December 31, 2025, the fixed charge coverage ratio measurement was not applicable.
−Removed: The amended ABL Facility also contains negative covenants governing dividends, investments, indebtedness, liens, and other matters customary for similar facilities.
+Added: The amended ABL Facility also contains negative covenants governing dividends, investments, debt, liens, and other matters customary for similar facilities.
+Added: As of March 16, 2026 and based on our January availability calculation, we have availability of $ 382 before letters of credit issued under the ABL Facility of approximately $ 93 .
+Added: There are no current borrowings outstanding.
+Added: Accordingly, our net availability is approximately $ 289 .
+Added: As discussed above, certain debt covenants limit our total amount of secured debt outstanding.
+Added: As of the date of our filing, our capacity under the ABL was not limited by any debt covenants.
+Added: 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 debt.
If an event of default occurs under the amended ABL Facility, the entire principal amount outstanding, together with all accrued unpaid interest and other amounts owed in respect thereof, may be declared immediately due and payable, subject, in certain instances, to the expiration of applicable cure periods.
−Removed: Term Loan B Credit Facility
−Removed: In November 2023, Xerox Corporation, as borrower, Xerox Holdings Corporation, and certain of Xerox’s subsidiaries, as guarantors, entered into a first lien term loan credit agreement with Jefferies Finance LLC, as administrative agent and collateral agent (the TLB Agent), and a syndicate of lenders providing for a first lien senior secured term loan credit facility (the TLB) to Xerox Corporation of $ 550 , which was fully extended as term loans to Xerox Corporation at closing.
−Removed: The term loans under this facility included an aggregate original issue discount (OID) of $ 17 and debt issuance costs of $ 9 resulting in net proceeds of approximately $ 524 .
−Removed: The OID and debt issuance costs were accordingly deferred and will be amortized over the term of the Loans.
−Removed: Xerox’s obligations under the TLB are supported by, guarantees from the Company and certain of Xerox’s U.S., Canadian, German, Belgium, and English subsidiaries, and security interests in substantially all of the assets of Xerox, the Company, and such U.S., Canadian and English subsidiaries (subject to certain exceptions and limitations set forth in the TLB), and security interests in the finance lease receivables of such German and Belgium subsidiaries.
−Removed: Liens in favor of the lenders under the TLB are subject to an intercreditor agreement with the ABL Agent.
−Removed: At Xerox’s election, the term loans will bear interest at a per annum rate of either:
−Removed: (1) a fluctuating rate equal to the highest of (A) a rate of 0.5 % in excess of the “NYFRB” rate, (B) the “prime rate” and (C) a rate of 1.0 % in excess of one-month Term SOFR, plus an applicable margin of 3.00 %, or
−Removed: (2) Term SOFR for a one-, three- or six-month interest period or (as agreed to by the Agent and the Lenders) such other period, as selected by the company (provided that such rate shall not be less than 0.50 %), plus an applicable margin of 4.00 %, for Term SOFR term loans, or 3.00 % for ABR term loans.
−Removed: There are $ 523 of term loans outstanding at December 31, 2024.
−Removed: Currently, $ 300 of the term loans bears interest at an average rate of 8.33 % through March 31, 2025, and the remaining $ 223 of the term loans bears interest at an average rate of 8.36 % through January 31, 2025, at which time the interest rate will reset based on Xerox’s elections.
−Removed: The term loans are repayable in full at maturity in November 2029 and amortize at a rate of 5 % per annum in 2024 and 2025, 7.5 % per annum in 2026 and 10 % per annum thereafter.
−Removed: If the term loans are voluntarily prepaid in connection with a Repricing Event (as defined in the TLB) within six months of the closing date, a prepayment premium of 1 % will apply.
+Added: In October 2025, Lexmark and certain of its domestic and foreign subsidiaries became guarantors under the ABL.
+Added: Refer to the Debt section of Note 6 - Acquisitions and Divestitures, for additional information regarding the Lexmark Acquisition.
Xerox 2025 Annual Report 134
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: If an event of default occurs under the TLB, the entire principal amount outstanding thereunder, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable, subject, in certain instances, to the expiration of applicable cure periods.
−Removed: The TLB also contains customary excess cash flow and asset sale mandatory prepayments, reporting covenants and negative covenants governing dividends, investments, indebtedness, liens, and other matters that are customary for similar term loan B facilities.
+Added: Table of Conten t s
+Added: Secured Promissory Notes
+Added: In connection with Xerox Corporation's acquisition of ITsavvy Acquisition Company, Inc.
+Added: (ITsavvy), Xerox Corporation issued two , non-interest bearing, secured promissory notes (the 2025 ITsavvy Note and the 2026 ITsavvy Note, or the ITsavvy Notes).
+Added: Each of the ITsavvy Notes had a principal amount of $ 110 .
+Added: The 2025 ITsavvy Note had a maturity date of October 8, 2025, and the 2026 ITsavvy Note had a maturity date of January 30, 2026.
+Added: The 2025 ITsavvy Note has been paid in full in cash as of its maturity date.
+Added: Refer to the Debt section of Note 6 - Acquisitions and Divestitures, for additional information regarding the ITsavvy and the ITsavvy Notes.
+Added: In October 2025, the U.S.
+Added: Lexmark and certain of its domestic and foreign subsidiaries became guarantors under the TLB Facility.
+Added: Refer to the Debt section of Note 6 - Acquisitions and Divestitures, for additional information regarding the Lexmark Acquisition.
+Added: 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 .
+Added: The Capped Calls cover, subject to anti-dilution adjustments, the number of shares of the Company's common stock initially underlying the 2030 Convertible Notes.
+Added: By entering into the Capped Calls, we expect to reduce the potential dilution to the Company's common stock (or, in the event a conversion of the 2030 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: In the second quarter of 2025, the annual dividend was reduced to $ .10 per share.
+Added: 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.
+Added: Xerox Holdings Corporation/Xerox Corporation Intercompany Loan
+Added: In March 2024, Xerox Holdings Corporation and Xerox Corporation entered into two intercompany loan agreements which mirror the terms of Xerox Holdings Corporation's 2029 and 2030 Senior Notes, including principal, interest rates, payment dates and debt issuance costs of approximately $ 15 .
+Added: As a result, Xerox Corporation recorded approximately $ 900 of related party debt.
+Added: The proceeds of this new intercompany loan were used to partially pay down approximately $ 362 on the existing 2020 intercompany loan made by Xerox Holdings Corporation to Xerox Corporation.
+Added: At December 31, 2025 and 2024, the balance of the Intercompany Loan reported in Xerox Corporation’s Consolidated Balance Sheet was $ 1,993 and $ 2,022 , respectively, which is net of related debt issuance costs, and the intercompany interest payable was $ 36 and $ 31 , respectively.
Secured Borrowings and Collateral
−Removed: We have entered into secured loan agreements with various financial institutions where we sold finance receivables and rights to payments under our equipment on operating leases.
+Added: In prior years, we had entered into secured loan agreements with various financial institutions where we sold finance receivables and rights to payments under our equipment on operating leases.
In certain transactions, the sales were made to special purpose entities (SPEs), owned and controlled by Xerox, where the SPEs funded the purchase through amortizing secured loans from the financial institutions.
−Removed: The loans have variable interest rates and expected lives of approximately 2.5 years, with half projected to be repaid within the first year based on collections of the underlying portfolio of receivables.
+Added: The loans had variable interest rates and expected lives of approximately 2.5 years with half projected to be repaid within the first year based on collections of the underlying portfolio of receivables.
For certain loans, we entered into interest rate hedge agreements to either fix or cap the interest rate over the life of the loan.
3 unchanged sentences
Conversely, the credit holders of these SPEs did not have legal recourse to the Company’s general credit.
−Removed: Below are the secured assets and obligations held by subsidiaries of Xerox, which are included in our Consolidated Balance Sheets.
−Removed: Balance at December 31, 2024
−Removed: Finance Receivables, Net (1)
−Removed: Equipment on Operating Leases, Net Secured Debt (2)
−Removed: Interest Rate (3)
−Removed: Expected Maturity
−Removed: November 2023 $ 58 $ — $ 70 4.62 % 2026
−Removed: Total $ 58 $ — $ 70
−Removed: Balance at December 31, 2023
−Removed: Finance Receivables, Net (1)
−Removed: Equipment on Operating Leases, Net Secured Debt (2)
−Removed: Interest Rate (3)
−Removed: Expected Maturity
−Removed: United States (4)(5)
−Removed: January 2022 $ 209 $ — $ 77 6.82 % 2024
−Removed: September 2021 89 2 25 6.76 % 2024
−Removed: $ 298 $ 2 $ 102
−Removed: Canada (4)(6)
−Removed: July 2023 $ 86 $ — $ 77 6.74 % 2026
−Removed: November 2023 $ 235 $ — $ 182 5.42 % 2026
−Removed: Total $ 619 $ 2 $ 361
−Removed: ____________ _
−Removed: (1) Includes (i) Billed portion of finance receivables, net (ii) Finance receivables, net and (iii) Finance receivables due after one year, net as included in the Consolidated Balance Sheets as of December 31, 2024 and 2023 .
−Removed: (2) Represents principal debt balance and excludes debt issuance costs of $ 0 and $ 1 as of December 31, 2024 and 2023 , respectively.
−Removed: (3) Represents the pre-hedged rate - refer to Note 16 - Financial Instruments for additional information regarding hedging of these borrowings.
−Removed: (4) Secured assets and obligations held by SPEs.
−Removed: (5) In the second quarter of 2024, we repaid the remaining balance on these secured borrowings.
−Removed: (6) Prior to entering the new finance receivable sales agreement with De Lage Landen Financial Services Canada Inc.
−Removed: (DLL), in October 2024, the remaining balance of this secured debt was repaid.
−Removed: Refer to Note 8 - Finance Receivables, Net for additional information related to our arrangement with DLL.
Xerox 2025 Annual Report 135
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
+Added: At December 31, 2024, we had borrowings of $ 70 , which were secured by finance receivables of $ 58 .
+Added: These borrowings had an interest rate of 4.62 %, and were expected to mature in 2026.
+Added: During the first quarter 2025, the outstanding balance of $ 70 was repaid.
+Added: Accordingly, there are no borrowings secured by finance receivables that are outstanding as of December 31, 2025.
Interest paid on our short-term and long-term debt amounted to $ 272 , $ 214 and $ 201 for the years ended December 31, 2025, 2024 and 2023, respectively.
2 unchanged sentences
2025 2024 2023
+Added: Equipment financing interest (1)
+Added: $ 86 $ 106 $ 130
+Added: Non-financing interest expense (1)(2)
Interest expense $ 334 $ 225 $ 198
+Added: Financing income (3)
$ 126 $ 151 $ 191
+Added: Other interest income (3)
Interest income $ 140 $ 165 $ 207
_____________
−Removed: (1) Includes Equipment financing (Cost of financing) interest as well as non-financing interest expense included in Other expenses, net in the Consolidated Statements of (Loss) Income.
+Added: (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 Consolidated Statements of (Loss) Income.
(2) Interest expense of Xerox Corporation included intercompany expense associated with the Xerox Holdings Corporation/Xerox Corporation Intercompany Loan of $ 136 , $ 111 and $ 80 for the three years ended December 31, 2025, 2024 and 2023, respectively.
−Removed: (3) Includes Financing income, as well as other interest income that is included in Other expenses, net in the Consolidated Statements of (Loss) Income.
+Added: (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 Consolidated Statements of (Loss) Income.
Equipment financing interest is determined based on an estimated cost of funds, applied against the estimated level of debt required to support our net finance receivables.
7 unchanged sentences
Our primary foreign currency market exposures include the Euro, U.K.
−Removed: Pound Sterling, and the Japanese Yen.
−Removed: The fair market values of all our derivative contracts change with fluctuations in interest rates and/or currency exchange rates and are designed so that any changes in their values are offset by changes in the values of the underlying exposures.
+Added: Pound Sterling, Japanese Yen, Philippine Peso, Mexican Peso, and Chinese Yuan .The fair market values of all our derivative contracts change with fluctuations in interest rates and/or currency exchange rates and are designed so that any changes in their values are offset by changes in the values of the underlying exposures.
Derivative financial instruments are held solely as risk management tools and not for trading or speculative purposes.
5 unchanged sentences
We use interest rate swap and interest rate cap agreements to manage our interest rate exposure and to achieve a desired proportion of variable and fixed rate debt.
−Removed: These derivatives may be designated as fair value hedges or cash flow hedges depending on the nature of the risk being hedged.
+Added: 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-year period ended December 31, 2025, 2024, and 2023, respectively.
2 unchanged sentences
The interest rate swaps convert the interest paid on certain loans to a fixed amount while the caps limit the maximum amount of interest paid.
−Removed: During first quarter 2024, the following derivatives were dedesignated as cash flow hedges.
−Removed: The net fair value of these cash flow hedges, which was not material, was recorded in Accumulated Other Comprehensive Loss and then reclassified to earnings.
Xerox 2025 Annual Report 136
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: Secured Borrowing Derivative Type Notional Amount
−Removed: France Cap 43
−Removed: France Cap 34
−Removed: In September 2024, we entered into two floating-to-fixed interest rate swaps to hedge against interest rate volatility associated with any of our floating rate debt which was primarily under our Term Loan B Credit Agreement (TLB).
−Removed: The TLB had an outstanding principal balance of $ 523 as of December 31, 2024.
−Removed: The following is a summary of our swaps at December 31, 2024:
−Removed: Counterparty Derivative Type Principal Debt
−Removed: Notional Amount
−Removed: Expected Maturity Fixed Rate Paid
−Removed: Floating Rate Received
−Removed: Net Fair Value
−Removed: Mizuho Swap 175 175 2027 3.271 % 4.604 % $ 3
−Removed: Credit Agricole Swap 125 125 2027 3.276 % 4.604 % 2
−Removed: Total $ 300 $ 300 $ 5
−Removed: The remaining portion of the TLB of $ 223 is not hedged, and is subject to interest rate fluctuations.
−Removed: The impact of these interest rate swaps on interest expense was a net reduction of $ 1 for the year ended December 31, 2024.
+Added: Table of Conten t s
+Added: During 2024, certain derivatives were de-designated as cash flow hedges.
+Added: The net fair value of these cash flow hedges, which was not material, was recorded in Accumulated Other Comprehensive Loss and then reclassified to earnings.
+Added: In 2024, we entered into two floating-to-fixed interest rate swaps to hedge against interest rate volatility associated with any of our floating rate debt which was primarily under our Term Loan B Credit Agreement (TLB).
+Added: 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.
+Added: 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.
+Added: Following the de-designation, the swaps continue to be carried at fair value on the balance sheet.
+Added: Changes in fair value are recognized in earnings in interest expense were not material during 2025.
+Added: Amounts previously recorded in accumulated other comprehensive loss related to the hedged cash flows was immaterial and was reclassified to earnings during the third quarter 2025.
+Added: During the fourth quarter 2025, a $ 125 interest rate swap was terminated.
+Added: Accordingly, the notional value of the remaining swap at December 31, 2025 was $ 175 .
Foreign Exchange Risk Management
14 unchanged sentences
Asset (Liability) (1)
−Removed: Pound Sterling $ 337 $ 1 $ 385 $ 3
+Added: Dollar $ 1,195 $ 1 $ 212 $ ( 1 )
Dollar/Euro 289 — 342 3
−Removed: Euro/Canadian Dollar — — 169 —
+Added: Euro/U.K Pound Sterling 134 — 337 1
+Added: Chinese Yuan/U.S.
Dollar 134 — — —
+Added: Mexican Peso/U.S.
+Added: Dollar 121 — — —
+Added: Philippine Peso/U.S Dollar 115 — — —
Japanese Yen/U.S.
Dollar 100 ( 3 ) 104 ( 5 )
−Removed: Japanese Yen/Euro 52 ( 1 ) 60 —
−Removed: Dollar/Canadian Dollar 194 — — —
+Added: U.K Pound Sterling/U.S.
+Added: Dollar 67 — — —
+Added: Swiss Franc/U.S.
+Added: Dollar 62 — — —
+Added: U.S Dollar/Canadian Dollar 52 — 194 —
+Added: Hong Kong Dollar/ U.S.
+Added: Dollar 51 — — —
Swiss Franc /Euro 30 — 19 —
−Removed: Euro/Swedish Krona — — — —
+Added: Japanese Yen/Euro 24 ( 1 ) 52 ( 1 )
Pound Sterling/Euro 14 — 67 —
−Removed: Euro/Danish Krone — — 25 —
Canadian Dollar/Euro 21 — 19 —
3 unchanged sentences
(1) Represents the net receivable (payable) amount included in the Consolidated Balance Sheet at December 31, 2025 and 2024.
+Added: The change in the gross notional value of our hedging positions since December 31, 2024 resulted from the acquisition of Lexmark.
Xerox 2025 Annual Report 137
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Foreign Currency Cash Flow Hedges
8 unchanged sentences
The following table provide a summary of gains (losses) on derivative instruments:
−Removed: Derivative (Loss) Gain Recognized in OCI (Effective Portion) (Loss) Gain Reclassified from AOCI to Income (Effective Portion)
+Added: Derivative (Loss) Gain Recognized in OCI (Effective Portion) (Loss) Gain Reclassified from AOCL to Income (Effective Portion)
Derivatives in Cash Flow
1 unchanged sentence
(Loss) Gain Reclassified
−Removed: from AOCI into Income
+Added: from AOCL into Income
(Effective Portion) Year Ended December 31,
5 unchanged sentences
All components of each derivative’s gain or (loss) were included in the assessment of hedge effectiveness.
−Removed: At December 31, 2024, a net after-tax income of $ 6 was recorded in Accumulated other comprehensive loss associated with our cash flow hedging activity.
+Added: At December 31, 2025, a net after-tax loss of $ 4 was recorded in Accumulated other comprehensive loss associated with our cash flow hedging activity.
The entire balance is expected to be reclassified into Net income within the next 12 months, providing an offsetting economic impact against the underlying anticipated transactions.
+Added: Credit Support Annex
+Added: 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.
+Added: At December 31 2025, the Company had no collateral posted due to this provision.
Non-Designated Derivative Instruments Gains (Losses)
5 unchanged sentences
Derivatives NOT Designated as Hedging Instruments Location of Derivative Gain 2025 2024 2023
−Removed: Foreign exchange contracts – forwards Other expense – Currency gains, net $ 24 $ 26 $ 17
+Added: Foreign exchange contracts – forwards Other expense – Currency gains (losses), net $ ( 8 ) $ 24 $ 26
For the three years ended December 31, 2025, 2024 and 2023, we recorded net currency losses of $ 12 , $ 15 and $ 28 , respectively.
1 unchanged sentence
Xerox 2025 Annual Report 138
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 17 – Fair Value of Financial Assets and Liabilities
26 unchanged sentences
_____________
−Removed: (1) Includes $ 388 of Xerox Corporation related party debt.
+Added: (1) Includes $ 121 and $ 388 of Xerox Corporation related party debt for the years ended December 31, 2025 and 2024 , respectively.
(2) Represents subsidiaries of Xerox Corporation.
3 unchanged sentences
Xerox 2025 Annual Report 139
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 18 – Employee Benefit Plans
12 unchanged sentences
This contract is issued by a third-party insurance company with no affiliation to the Company or the plan.
−Removed: The contract was funded through existing plan assets, with a portion of the premium payments for the policy being deferred until full liquidation of certain illiquid assets of the plan.
+Added: The contract was funded through existing plan assets, with a portion of the premium payments for the policy being deferred.
+Added: In February 2026, the remaining portion of the premium was paid in full using proceeds from the sale of certain assets that were previously illiquid.
The insurance buy-in contract is valued on an insurer pricing basis, which reflects the purchase price adjusted for changes in discount rates and other actuarial assumptions, which approximates fair value.
3 unchanged sentences
pension plan pension obligations, at which time the Company would derecognize the assets and liabilities of the pension plan and realize a settlement gain or loss as a component of the net periodic pension cost.
−Removed: Effective January 1, 2023, we implemented a new defined contribution plan in the Netherlands to provide future retirement benefits for eligible employees and ceased accruals in the existing pension plan in the Netherlands.
−Removed: We recorded this change as a curtailment effective December 31, 2022.
−Removed: The benefits accrued prior to 2023 under the pension plan in the Netherlands remain in a Collective Defined Contribution (CDC) plan.
−Removed: From a Company risk perspective, this plan operates just like a defined contribution plan as the Company is only responsible for a contribution for annual benefit accruals under 5-year agreements through 2022.
−Removed: Although the Company's risk has been mitigated, under U.S.
−Removed: GAAP this plan doesn’t meet the definition of a defined contribution plan and therefore it continues to be accounted for as a defined benefit plan.
+Added: In May 2023, the Dutch Parliament enacted the Future Pensions Act (Wet toekomst pensioenen), which became effective on July 1, 2023.
+Added: The legislation requires employers to transition existing pension arrangements in the Netherlands that are structured as defined benefit plans or age-dependent defined contribution plans to defined contribution plans.
+Added: All affected pension plans must be converted to compliant plans by January 1, 2028.
+Added: The Company sponsors pension plans for certain employees in the Netherlands that are subject to this legislation, and is in the process of evaluating the required transition.
+Added: The transition is expected to be completed within the statutory timeframe.
+Added: The conversion of the Company’s Dutch retirement plan may result in changes to the nature of the pension obligations and could give rise to plan amendments, or settlements under ASC 715, Compensation—Retirement Benefits, depending on the final structure of the transitioned plans and the treatment of accrued benefits.
+Added: Such events could require remeasurement of pension obligations and plan assets and may result in the recognition of settlement gains or losses in the period in which the transition is finalized or implemented.
+Added: At December 31, 2025, the Company has not yet finalized the design of the plans and, accordingly, has not recorded any impacts related to the conversion.
+Added: The Company will recognize any resulting effects on its pension obligations, net periodic pension cost, or accumulated other comprehensive income in accordance with ASC 715 when the transition is substantively enacted and the amounts are reasonably estimable.
Xerox 2025 Annual Report 140
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Pension Benefits
7 unchanged sentences
Plan participants' contributions — — 2 1 5 5
−Removed: Actuarial (gain) loss (1)
+Added: Actuarial loss (gain) (1)
38 ( 136 ) ( 114 ) ( 281 ) 6 ( 3 )
2 unchanged sentences
Benefits paid/settlements ( 189 ) ( 165 ) ( 346 ) ( 274 ) ( 26 ) ( 23 )
+Added: Acquisition (2)
+Added: 399 — 155 — 7 —
Other 1 — ( 2 ) — — —
7 unchanged sentences
Benefits paid/settlements ( 189 ) ( 165 ) ( 346 ) ( 274 ) ( 26 ) ( 23 )
+Added: Acquisition (2)
+Added: 326 — 122 — — —
+Added: Other — — ( 2 ) — — —
Fair Value of Plan Assets, December 31 $ 1,845 $ 1,407 $ 4,588 $ 4,220 $ — $ —
9 unchanged sentences
_____________
−Removed: (1) Changes in actuarial (gains) losses are primarily due to changes in discount rates.
+Added: (1) Changes in actuarial losses (gains) are due to actual returns in excess of expected returns, as well as changes in discount rates.
+Added: (2) Reflects the Lexmark Acquisition on July 1, 2025.
+Added: Refer to Note 6 - Acquisitions and Divestitures for additional information regarding the Lexmark acquisition.
(3) Includes under-funded and unfunded plans.
9 unchanged sentences
Refer to Note 17 - Fair Value of Financial Assets and Liabilities for additional information regarding deferred compensation liabilities.
+Added: Xerox 2025 Annual Report 141
+Added: Table of Conten t s
Benefit plans pre-tax amounts recognized in AOCL at December 31st:
6 unchanged sentences
Total loss (gain) - Pre-tax $ 640 $ 700 $ 1,530 $ 1,582 $ ( 99 ) $ ( 129 )
−Removed: Xerox 2024 Annual Report 138
−Removed: Table of Contents Legal Sign-off 2.24.25
Aggregate information for pension plans with an accumulated benefit obligation in excess of plan assets is presented below.
4 unchanged sentences
$ 2,338 $ 1,845 $ 1,956 $ 1,407
+Added: 212 165 13 39
Unfunded Plans:
9 unchanged sentences
$ 2,338 $ 1,845 $ 1,956 $ 1,407
+Added: 225 165 45 39
Unfunded Plans:
4 unchanged sentences
Total $ 3,055 $ 2,010 $ 2,513 $ 1,446
+Added: Xerox 2025 Annual Report 142
+Added: Table of Conten t s
Pension plan assets and benefit obligations by country were as follows:
10 unchanged sentences
Total $ 6,433 $ 6,909 $ ( 476 ) $ 5,627 $ 6,273 $ ( 646 )
−Removed: Xerox 2024 Annual Report 139
−Removed: Table of Contents Legal Sign-off 2.24.25
The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows:
6 unchanged sentences
Service cost $ — $ — $ — $ 6 $ 5 $ 5 $ 1 $ 1 $ 1
−Removed: Interest cost (income) (1)
+Added: Interest cost (1)(2)
138 88 116 195 182 188 8 8 10
2 unchanged sentences
Recognized net actuarial loss (gain) (1)
+Added: 19 18 16 53 62 11 ( 11 ) ( 12 ) ( 12 )
Amortization of prior service cost (credit) (1)
+Added: — — — 9 8 5 ( 13 ) ( 15 ) ( 15 )
Recognized settlement loss (1)
−Removed: Recognized curtailment gain — — — — — ( 4 ) — — —
+Added: — 5 19 — — 1 — — —
Defined Benefit Plans 46 40 48 54 64 ( 7 ) ( 15 ) ( 18 ) ( 16 )
1 unchanged sentence
Net Periodic Benefit Cost (Credit) $ 49 $ 57 $ 67 $ 77 $ 87 $ 14 $ ( 15 ) $ ( 18 ) $ ( 16 )
−Removed: Other changes in plan assets and benefit obligations recognized in Other Comprehensive Loss:
+Added: Other changes in plan assets and benefit obligations recognized in Other Comprehensive Income (Loss):
Net actuarial (gain) loss
3 unchanged sentences
Amortization of net prior service (cost) credit — — — ( 9 ) ( 8 ) ( 5 ) 13 15 15
−Removed: Curtailment gain — — — — — 4 — — —
−Removed: Total Recognized in Other Comprehensive Loss (3)
+Added: Total Recognized in Other Comprehensive Income (Loss) (4)
( 60 ) ( 31 ) 39 ( 175 ) ( 62 ) 317 30 24 19
−Removed: Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive Loss $ 26 $ 106 $ 43 $ 25 $ 331 $ 370 $ 6 $ 3 $ ( 67 )
+Added: Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive Income (Loss) $ ( 11 ) $ 26 $ 106 $ ( 98 ) $ 25 $ 331 $ 15 $ 6 $ 3
_____________
+Added: (1) Included in Other expenses, net in the Statements of (Loss) Income.
(2) Interest cost for Pension Benefits includes interest expense on non-TRA obligations of $ 358 , $ 279 and $ 284 and interest (income)/expense directly allocated to TRA participant accounts of $( 25 ), $( 9 ) and $ 20 for the years ended December 31, 2025, 2024 and 2023, respectively.
−Removed: (2) Expected return on plan assets includes expected investment income on non-TRA assets of $ 273 , $ 300 and $ 302 and actual investment (loss)/income on TRA assets of $( 9 ), $ 20 and $( 147 ) for the years ended December 31, 2024, 2023 and 2022, respectively.
−Removed: (3) Amounts represent the pre-tax effect included in Other comprehensive loss.
−Removed: Refer to Note 24 - Other Comprehensive Loss for the related tax effects and the net of tax amounts.
+Added: (3) Expected return on plan assets includes expected investment income on non-TRA assets of $ 295 , $ 273 and $ 300 and actual investment income/(loss) on TRA assets of $ 25 , $( 9 ) and $ 20 for the years ended December 31, 2025, 2024 and 2023, respectively.
+Added: (4) Amounts represent the pre-tax effect included in Other comprehensive income (loss).
+Added: Refer to Note 24 - Other Comprehensive Income (Loss) for the related tax effects and the net of tax amounts.
+Added: Xerox 2025 Annual Report 143
+Added: Table of Conten t s
Plan Amendments
6 unchanged sentences
United Kingdom
−Removed: In April 2024, 2023 and 2022, our U.K.
+Added: In December 2025, April 2024, and April 2023, our U.K.
defined benefit pension plan was amended, at the sole discretion of the Plan Trustees as legally allowed, to increase the capped inflation indexation for the April 2026, 2024 and 2023 pension increase award to 4.0 %, 5.0 % and 6.5 %, respectively.
−Removed: The April 2024 plan amendment resulted in an increase of $ 6 in the projected benefit obligation (PBO) for this plan, the April 2023 plan amendment resulted in an increase of $ 36 in the projected benefit obligation (PBO) for this plan, and the April 2022 plan amendment resulted in an increase of
−Removed: Xerox 2024 Annual Report 140
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: approximately $ 72 in the PBO for this plan, with all amounts inclusive of other remeasurement adjustments for changes in actuarial assumptions.
+Added: The December 2025 plan amendment resulted in an increase of $ 3 in the projected benefit obligation (PBO) for this plan, the April 2024 plan amendment resulted in an increase of $ 6 in the PBO for this plan, and the April 2023 plan amendment resulted in an increase of $ 36 in the PBO for this plan, with all amounts inclusive of other remeasurement adjustments for changes in actuarial assumptions.
In October 2018, the High Court of Justice in the United Kingdom (the High Court) ruled that Lloyds Bank PLC was required to equalize benefits payable to men and women under its U.K.
5 unchanged sentences
The equalization method was agreed between the Company and Trustee and is in the process of being implemented.
−Removed: Retiree Health Plans:
−Removed: During 2022, we amended our U.S.
−Removed: Retiree Health Plan to reduce benefits and eliminate coverage for existing union retirees and for certain union employees as a result of contract negotiations.
−Removed: These negative plan amendments resulted in a reduction of approximately $ 30 in the Company's postretirement benefit obligation.
+Added: Xerox 2025 Annual Report 144
+Added: Table of Conten t s
Current Allocation
10 unchanged sentences
International (2)
+Added: 99 — — 181 280 372 18 — 21 411
Fixed Income Securities:
treasury securities (2)
+Added: — 84 — 69 153 — 2 — — 2
Debt security issued by government agency — 163 — — 163 — 661 — 2 663
Corporate bonds (2)
+Added: — 623 — 116 739 — 266 — — 266
+Added: Asset backed securities — — — — — — 4 — — 4
Derivatives — 2 — — 2 — ( 11 ) — — ( 11 )
7 unchanged sentences
(1) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
−Removed: (2) Other Level 1 includes net non-financial (liabilities)/assets, such as due to/from broker, interest receivables and accrued expenses.
−Removed: Plans had net liabilities of $( 3 ), while the non-U.S.
+Added: (2) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient include investments in common collective trusts.
+Added: (3) Other Level 1 includes net non-financial assets, such as due to/from broker, interest receivables and accrued expenses.
+Added: Plans had no net assets, while the non-U.S.
plans had net assets of $ 28 .
(4) Other NAV for U.S.
−Removed: Plans (measured at NAV) includes mutual funds of $ 116 , which are invested approximately 70 % in fixed income securities and approximately 30 % in equity securities.
+Added: Plans (measured at NAV) includes common collective trust funds of $ 104 , which are invested approximately 30 % in fixed income securities and approximately 70 % in equity securities.
(5) Other NAV for the non-U.S.
−Removed: Plans (measured at NAV) includes mortgage funds of $ 64 in our Netherlands plans.
+Added: Plans (measured at NAV) includes mortgage funds of approximately $ 87 in our Netherlands plans.
Xerox 2025 Annual Report 145
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
December 31, 2024
14 unchanged sentences
Guaranteed insurance contracts — — — — — — — 2,184 — 2,184
+Added: Other (2)(3)(4)
( 3 ) — — 163 160 51 12 — 64 127
5 unchanged sentences
plans had net assets of $ 51 .
−Removed: (3) Other NAV includes mutual funds of $ 92 (measured at NAV) which are invested approximately 70 % in fixed income securities and approximately 30 % in equity securities.
−Removed: The following tables represents a rollforward of the defined benefit plans assets measured at fair value using significant unobservable inputs (Level 3 assets):
+Added: (3) Other NAV for the U.S.
+Added: Plans includes common collective trust funds of $ 116 (measured at NAV) which are invested approximately 70 % in fixed income securities and approximately 30 % in equity securities.
+Added: (4) Other NAV for the non-U.S.
+Added: Plans (measured at NAV) includes mortgage funds of approximately $ 64 in our Netherlands plans.
+Added: The following tables represents a roll forward of the defined benefit plans assets measured at fair value using significant unobservable inputs (Level 3 assets):
Real Estate Real Estate Private Equity/Venture Capital Guaranteed Insurance Contracts Total
2 unchanged sentences
Sales ( 22 ) — — ( 3 ) ( 3 )
−Removed: Unrealized gains (losses) 3 ( 31 ) — ( 9 ) ( 40 )
+Added: Unrealized losses ( 1 ) ( 12 ) ( 4 ) ( 253 ) ( 269 )
Currency translation — ( 7 ) — ( 42 ) ( 49 )
2 unchanged sentences
Sales ( 2 ) — — — —
−Removed: Unrealized losses ( 1 ) ( 12 ) ( 4 ) ( 253 ) ( 269 )
+Added: Unrealized gains (losses) 1 ( 31 ) — 20 ( 11 )
+Added: Acquisition (1)
+Added: — — — 131 131
Currency translation — 14 — 163 177
Balance at December 31, 2025 $ 23 $ 70 $ — $ 2,498 $ 2,568
+Added: _____________
+Added: (1) Reflects the Lexmark Acquisition on July 1, 2025.
+Added: Refer to Note 6 - Acquisitions and Divestitures for additional information regarding the Lexmark acquisition.
Level 3 Valuation Method
3 unchanged sentences
The fair value for our private equity/venture capital partnership investments are based on our share of the estimated fair values of the underlying investments held by these partnerships as reported (or expected to be reported) in their audited financial statements.
−Removed: 2022 and 2023 purchases of Guaranteed Insurance Contracts (GICs) include the purchases of buy-in annuity contracts, which have been valued based on the member benefits covered by the contracts adjusted for current market factors.
+Added: Purchases of Guaranteed Insurance Contracts (GICs) include the purchases of buy-in annuity contracts, which have been valued based on the member benefits covered by the contracts adjusted for current market factors.
The valuation techniques and inputs for our Level 3 assets have been consistently applied for all periods presented.
Xerox 2025 Annual Report 146
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Investment Strategy
9 unchanged sentences
(1) Target allows for an additional allocation to synthetic equity which is offset by cash, which resulted in a negative cash position in Other.
−Removed: (2) Significant changes in asset allocation in non-U.S.
−Removed: are due to the U.K.
−Removed: pension plan entering an insurance buy-in contract, which is included in Other.
We employ a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk.
29 unchanged sentences
Xerox 2025 Annual Report 147
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Estimated Future Benefit Payments
35 unchanged sentences
Defined Contribution Plans
−Removed: We have post-retirement savings and investment plans in several countries, including the U.S., the U.K.
+Added: We have defined contribution savings and investment plans in several countries, including the U.S., the U.K.
In many instances, employees who participated in the defined benefit pension plans that have been amended to freeze future service accruals were transitioned to an enhanced defined contribution plan.
1 unchanged sentence
We recorded charges related to our defined contribution plans of $ 26 in 2025, $ 40 in 2024 and $ 40 in 2023.
−Removed: During 2021, the Company suspended its full year employer matching contribution for its U.S.
+Added: During 2025, the Company suspended its full year employer matching contribution for its legacy Xerox U.S.
based 401(k) plan for salaried (non-union) employees.
−Removed: The employer matching contribution was reinstated for 2022 and was made in the first quarter of 2023.
+Added: The employer matching contribution was reinstated for 2026 and began to be paid on a per-pay-period basis.
Xerox 2025 Annual Report 148
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 19 - Income and Other Taxes
19 unchanged sentences
A reconciliation of the U.S.
−Removed: federal statutory income tax rate to the consolidated effective income tax rate was as follows:
+Added: federal statutory income tax rate to the consolidated income tax rate pursuant to the disclosure requirements of ASU 2023-09 was as follows:
Year Ended December 31, 2025
+Added: Amount Percent
+Added: Loss before Income Taxes $ ( 488 )
+Added: federal statutory income tax rate ( 102 ) 21.0 %
+Added: State and local income taxes, net of federal (national) income tax effect (1)
80 ( 16.4 ) %
+Added: Foreign tax effects
+Added: Changes in valuation allowances ( 6 ) 1.2 %
+Added: Other 3 ( 0.6 ) %
+Added: Germany 6 ( 1.2 ) %
+Added: Effect of rates different than statutory 10 ( 2.1 ) %
+Added: Other ( 5 ) 1.0 %
+Added: United Kingdom
+Added: Changes in valuation allowances 27 ( 5.5 ) %
+Added: Other ( 6 ) 1.2 %
+Added: Other foreign jurisdictions 2 ( 0.4 ) %
+Added: Effect of cross-border tax laws
+Added: Subpart F 10 ( 2.1 ) %
+Added: GILTI 30 ( 6.2 ) %
+Added: Other 4 ( 0.8 ) %
+Added: Other ( 3 ) 0.6 %
+Added: Changes in valuation allowances 483 ( 99.0 ) %
+Added: Non-taxable or non-deductible items
+Added: Stock-based compensation 7 ( 1.4 ) %
+Added: Other 7 ( 1.4 ) %
+Added: Other Adjustments ( 3 ) 0.6 %
+Added: Changes in unrecognized tax benefits ( 3 ) 0.6 %
+Added: Effective Tax Rate $ 541 ( 110.9 ) %
+Added: _____________
+Added: (1) State Taxes in Illinois, New Jersey, New York, Connecticut, Florida, Maryland, Georgia and Alabama make up the majority (greater than 50%) of the tax effect in this category.
+Added: Xerox 2025 Annual Report 149
+Added: Table of Conten t s
+Added: A reconciliation of the U.S.
+Added: federal statutory income tax rate to the consolidated effective income tax rate for the years ended December 31, 2024, and 2023 was as follows:
+Added: Year Ended December 31,
federal statutory income tax rate 21.0 % 21.0 %
18 unchanged sentences
subsidiaries.
+Added: A summary of income taxes paid by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 was as follows:
+Added: Year Ended December 31, 2025
+Added: State and local 2
+Added: Switzerland 4
+Added: Other foreign 20
+Added: Total foreign 62
+Added: Total cash paid for income taxes (net of refunds) $ 65
On a consolidated basis, we paid a total of $ 65 , $ 65 and $ 51 in income taxes to federal, foreign and state jurisdictions during the three years ended December 31, 2025 , 2024 and 2023, respectively.
9 unchanged sentences
Xerox 2025 Annual Report 150
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Unrecognized Tax Benefits and Audit Resolutions
2 unchanged sentences
Benefits from uncertain tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement - the more-likely-than-not recognition threshold.
−Removed: Where we have determined that our tax return filing position does not satisfy the more likely than not recognition threshold, we have recorded no tax benefit.
+Added: Where we have determined that our tax return filing position does not satisfy the more-likely-than not recognition threshold, we have recorded no tax benefits.
These assessments require the use of considerable estimates and judgments and can increase or decrease our effective tax rate, as well as impact our operating results.
5 unchanged sentences
The specific timing of when the resolution of each tax position will be reached is uncertain.
−Removed: As of December 31, 2024, we do not believe that there are any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
3 unchanged sentences
Additions related to prior years positions — — 57
+Added: Additions related to business acquisitions 20 — —
Reductions related to prior years positions ( 1 ) — ( 14 )
14 unchanged sentences
Deferred Income Taxes
−Removed: At December 31, 2024 we have not provided deferred taxes on our undistributed pre-1987 E&P of approximately $ 292 , as such undistributed earnings have been determined to be indefinitely reinvested and we currently do not plan to initiate any action that would precipitate a deferred tax impact.
−Removed: The net change from the amount at December 31, 2023 of $ 310 was predominately due to currency impacts as well as the disposition of certain foreign subsidiaries.
+Added: At December 31, 2025 we have not provided deferred taxes on our undistributed pre-1987 Earnings & Profits as such undistributed earnings have been determined to be indefinitely reinvested and we currently do not plan to initiate any action that would precipitate a deferred tax impact.
+Added: Further, post-1986 earnings and profits associated with those foreign subsidiaries acquired in the Lexmark Acquisition have been determined to be indefinitely reinvested.
Additionally, we have also not provided deferred taxes on the outside basis differences in our investments in foreign subsidiaries that are unrelated to undistributed earnings.
2 unchanged sentences
Xerox 2025 Annual Report 151
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows:
5 unchanged sentences
Tax credit carryforwards 90 80
+Added: Disallowed interest expense carryforward (1)
Deferred and share-based compensation 24 22
6 unchanged sentences
Deferred Tax Liabilities
−Removed: Finance lease and installment sales $ — $ 36
Intangibles and goodwill 180 84
+Added: Depreciation 33 —
Unremitted earnings of foreign subsidiaries 29 26
1 unchanged sentence
Total $ 349 $ 172
−Removed: Total Deferred taxes, net $ 530 $ 650
+Added: Total Deferred tax (liability) asset, net $ ( 40 ) $ 530
Reconciliation to the Consolidated Balance Sheets
2 unchanged sentences
( 138 ) ( 85 )
−Removed: Total Deferred taxes, net $ 530 $ 650
+Added: Total Deferred tax (liability) asset, net $ ( 40 ) $ 530
_____________
+Added: (1) Prior year amounts have been reclassified to conform to the current year presentation.
(2) Represents the deferred tax liabilities recorded in Other long-term liabilities - refer to Note 14 - Supplementary Financial Information.
3 unchanged sentences
In determining the amount of deferred tax assets that are more-likely-than-not to be realized, we considered historical profitability, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies.
−Removed: The deferred tax assets requiring significant judgment are U.S.
−Removed: tax credit carryforwards with a limited life.
The net change in the total valuation allowance for the three years ended December 31, 2025, 2024 and 2023 was an increase of $ 1,422 , $ 136 and $ 9 , respectively.
The valuation allowance relates primarily to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which we have concluded it is more-likely-than-not that these items will not be realized in the ordinary course of operations.
−Removed: Although realization is not assured, we have concluded that it is more-likely-than-not that the deferred tax assets, for which a valuation allowance was determined to be unnecessary, will be realized in the ordinary course of operations based on the available positive and negative evidence, including scheduling of deferred tax liabilities and projected income from operating activities.
−Removed: The amount of the net deferred tax assets considered realizable, however, could change in the near term if future income or income tax rates are higher or lower than currently estimated, or if there are differences in the timing or amount of future reversals of existing taxable or deductible temporary differences.
−Removed: At December 31, 2024, we had tax credit carryforwards of $ 80 available to offset future income taxes, of which $ 1 is available to carryforward indefinitely while the majority of the remaining $ 79 will begin to expire in 2025 and 2026, if not utilized.
−Removed: We also had net operating loss carryforwards for income tax purposes of $ 473 that will begin to expire in 2024 through 2043, if not utilized, and $ 1.4 billion available to offset future taxable income indefinitely.
+Added: At December 31, 2025, we had tax credit carryforwards of $ 90 available to offset future income taxes, of which $ 1 is available to carryforward indefinitely while the majority of the remaining $ 89 will expire in 2026, if not utilized.
+Added: We also had net operating loss carryforwards for income tax purposes of $ 6.5 billion that will begin to expire in 2026 through 2045, if not utilized, and $ 1.6 billion available to offset future taxable income indefinitely.
Xerox 2025 Annual Report 152
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 20 – Contingencies and Litigation
+Added: Legal Matters
We are involved in a variety of claims, lawsuits, investigations and proceedings concerning:
28 unchanged sentences
Liens on Brazilian assets — —
−Removed: The decrease in the unreserved portion of the tax contingency, inclusive of any related interest, was primarily related to currency, partially offset by interest.
+Added: The increase in the unreserved portion of the tax contingency was primarily due to currency, as well as interest, partially offset by closed cases.
With respect to the unreserved tax contingency, the majority has been assessed by management as being remote as to the likelihood of ultimately resulting in a loss to the Company.
5 unchanged sentences
Xerox 2025 Annual Report 153
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: Litigation Matters
−Removed: Miami Firefighters’ Relief & Pension Fund v.
−Removed: Icahn, et al.:
−Removed: On December 13, 2019, shareholder Miami Firefighters’ Relief & Pension Fund (Miami Firefighters) filed a derivative complaint in New York State Supreme Court, New York County on behalf of Xerox Holdings Corporation (Xerox Holdings) against Carl Icahn and his affiliated entities High River Limited Partnership and Icahn Capital LP (the Icahn defendants), Xerox Holdings, and all then-current Xerox Holdings directors (the Directors).
−Removed: Xerox Holdings was named as a nominal defendant in the case but no monetary damages are sought against it.
−Removed: Miami Firefighters alleges:
−Removed: breach of fiduciary duty of loyalty against the Icahn defendants;
−Removed: breach of contract against the Icahn defendants (for purchasing HP stock in violation of Icahn’s confidentiality agreement with Xerox Holdings);
−Removed: unjust enrichment against the Icahn defendants;
−Removed: and breach of fiduciary duty of loyalty against the Directors (for any consent to the Icahn defendants’ purchases of HP common stock while Xerox Holdings was considering acquiring HP).
−Removed: Miami Firefighters seeks a judgment of breach of fiduciary duties against the Icahn defendants and the Directors, and disgorgement to Xerox Holdings of profits Icahn Capital and High River earned from trading in HP stock.
−Removed: This action was consolidated with a similar action brought by Steven J.
−Removed: Reynolds against the same parties in the same court.
−Removed: Miami Firefighters’ counsel has been designated as lead counsel in the consolidated action.
−Removed: Claims asserted against the Directors were later dismissed.
−Removed: The parties have reached a stipulation of settlement providing for certain governance changes and a payment by the Icahn defendants to Xerox.
−Removed: This stipulation has been submitted to the Supreme Court of the State of New York for approval, and Miami Firefighters has submitted a contested fee application seeking $ 5 that is under consideration by that court as well.
−Removed: Guarantees, Indemnifications and Warranty Liabilities
+Added: Table of Conten t s
+Added: We are engaged in numerous legal actions arising in the ordinary course of our business.
+Added: While there can be no assurance, as of December 31, 2025, we believe that the ultimate outcome of these other legal actions will not have a material adverse effect on our business, results of operations, financial condition or cash flows.
+Added: Guarantees, Indemnifications and Other Agreement
Indemnifications Provided as Part of Contracts and Agreements
17 unchanged sentences
In the case of lease guarantees, we may contest the liabilities asserted under the lease.
−Removed: Xerox 2024 Annual Report 149
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: obligations under these agreements and guarantees may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments we made.
+Added: Further, our obligations under these agreements and guarantees may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments we made.
Patent Indemnifications
5 unchanged sentences
Although the by-laws provide no limit on the amount of indemnification, Xerox Holdings Corporation or Xerox Corporation may have recourse against our insurance carriers for certain payments made by Xerox Holdings Corporation or Xerox Corporation.
−Removed: However, certain indemnification payments (such as those related to "clawback" provisions in certain compensation arrangements) may not be covered under Xerox Holdings Corporation's and Xerox Corporation's directors' and officers' insurance coverage.
+Added: Xerox 2025 Annual Report 154
+Added: Table of Conten t s
+Added: certain indemnification payments (such as those related to "clawback" provisions in certain compensation arrangements) may not be covered under Xerox Holdings Corporation's and Xerox Corporation's directors' and officers' insurance coverage.
Xerox Holdings Corporation and Xerox Corporation also indemnify certain fiduciaries of our employee benefit plans for liabilities incurred in their service as fiduciary whether or not they are officers of Xerox Holdings Corporation or Xerox Corporation.
1 unchanged sentence
We have issued or provided approximately $ 279 of guarantees as of December 31, 2025 in the form of letters of credit or surety bonds issued to i) support certain insurance programs;
−Removed: ii) support our obligations related to the Brazil tax and labor contingencies (see Brazil Contingencies );
+Added: ii) support our obligations related to the Brazil tax contingencies (see Brazil Contingencies );
iii) support our obligations related to our U.K.
3 unchanged sentences
the probability of which we believe is remote.
−Removed: 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.
−Removed: Xerox 2024 Annual Report 150
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: We believe that our capacity in the surety markets as well as under various credit arrangements (including our ABL Credit Facility) is sufficient to allow us to respond to future requests for proposals that require such credit support.
Note 21 - Preferred Stock
7 unchanged sentences
The Series A Preferred Stock is also convertible, at the option of the holder, upon a change in control, at the applicable conversion rate plus an additional number of shares determined by reference to the price paid for our common stock upon such change in control.
−Removed: In addition, upon the occurrence of certain fundamental change events, including a change in control or the delisting of Xerox Holdings Corporation's common stock, the holder of the Series A Preferred Stock has the right to require Xerox Holdings Corporation to redeem any or all of the preferred stock in cash at a redemption price per share equal to the liquidation preference and any accrued and unpaid dividends up to, but not including, the redemption date.
+Added: In addition, upon the occurrence of certain fundamental change events, including a change in control or the delisting of Xerox Holdings Corporation's common stock, a holder of Series A Preferred Stock has the right to require Xerox Holdings Corporation to redeem any or all of the preferred stock in cash at a redemption price per share equal to the liquidation preference and any accrued and unpaid dividends up to, but not including, the redemption date.
The Series A Preferred Stock is classified as temporary equity (i.e., apart from permanent equity) as a result of the contingent redemption feature.
2 unchanged sentences
Xerox 2025 Annual Report 155
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 22 – Shareholders’ Equity
24 unchanged sentences
Stock based compensation plans, net 1,291 —
−Removed: Acquisition of Treasury stock — 34,245
−Removed: Cancellation of Treasury stock ( 34,245 ) ( 34,245 )
Balance at December 31, 2024 124,435 —
Stock based compensation plans, net 1,453 —
+Added: Exercise of warrants 2,156 —
Balance at December 31, 2025 128,044 —
+Added: Unregistered Sales of Equity Securities
+Added: 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.
+Added: 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.
+Added: The Warrant was exercised during the third quarter 2025.
+Added: Refer to Note 15 - Debt for additional information regarding the issuance of the 2030 No te.
At December 31, 2025, Xerox Corporation has 1,000 authorized shares of Common stock, $ 1.00 par value per share, of which 100 shares are issued and outstanding and held by Xerox Holdings Corporation.
Xerox 2025 Annual Report 156
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 23 – Stock-Based Compensation
8 unchanged sentences
Stock-based compensation expense, pre-tax $ 45 $ 52 $ 54
−Removed: $ 52 $ 54 $ 75
Income tax benefit recognized in earnings 9 8 10
−Removed: (1) 2022 includes $ 21 associated with the accelerated vesting of all outstanding equity awards, according to the terms of the award agreement, in connection with the passing of Xerox Holding's former CEO.
Restricted Stock Units
Compensation expense for RSUs is based upon the grant-date market price and is recognized on a straight-line basis over the vesting period, based on management's estimate of the number of shares expected to vest.
−Removed: RSUs granted in 2022 through 2024 vest on a graded schedule as follows:
−Removed: 33 % after one year of service, 33 % after two years of service, and 34 % after three years of service from the date of grant.
+Added: RSUs granted in 2025 vest one-third on the first anniversary of the grant date, with the remainder vesting in equal quarterly installments over the subsequent two years of service.
+Added: RSUs granted in 2024 and 2023 vest ratably over three years , with one-third vesting on each anniversary of the grant date.
Performance Share Units
−Removed: PSU awards are comprised of performance-based components (Operating income improvement and Earnings per share) as well as market-based components (Relative Total Shareholder Return (RTSR) and Absolute Share Price).
−Removed: PSUs granted in 2024 are entirely performance-based with an RTSR modifier - see Market-Based Component below.
−Removed: PSUs granted in 2023 are entirely market-based, and PSUs granted in 2022 are one-half performance-based and one-half market-based.
+Added: PSU awards are comprised of a performance-based component (Operating income) as well as a market-based component (Relative Total Shareholder Return (RTSR)).
+Added: PSUs granted in 2025 and 2024 are entirely performance-based with an RTSR modifier - see Market-Based Component below.
+Added: PSUs granted in 2023 are entirely market-based.
The metrics and weightings are as follows:
1 unchanged sentence
Performance Metric 2025 2024 2023
+Added: Operating income (1)
+Added: 100 % — % — %
Operating income improvement (1)
— % 100 % — %
−Removed: Earnings per share — % — % 50 %
Relative total shareholder return — % — % 100 %
−Removed: Absolute share price — % — % 50 %
100 % 100 % 100 %
−Removed: (1) PSUs granted in 2024 are performance-based (Operating income improvement metric) with an RTSR modifier which can increase or decrease the number of shares that ultimately vest by 25 %.
+Added: (1) PSUs granted in 2025 and 2024 are performance-based and subject to an operating income metric and an RTSR modifier that may increase or decrease the number of shares that vest by up to 15 % and 25 %, respectively.
The measures are independent of each other and depending on the achievement of these metrics, a recipient of a PSU award is entitled to receive a number of shares equal to a percentage, ranging from 0 % to 200 % of the PSU award granted.
All PSUs granted have a three-year cliff vesting from the date of grant.
+Added: In August 2025, the Board of Directors of Xerox Holdings Corporation approved a modification to the 2025 PSUs that increased the threshold, target, and maximum operating income performance levels to reflect the inclusion of Lexmark’s estimated operating income from the July 1, 2025 acquisition date through December 31, 2025.
Performance-Based Component:
This PSU component vests contingent upon meeting predetermined annual and/or cumulative performance metrics.
+Added: The 2025 PSU metric vests based on the achievement of a one-year predetermined operating income goal for fiscal year 2025.
The 2024 PSU metric vests contingent upon meeting predetermined annual, as well as cumulative, operating income improvement goals established for four discrete performance periods (2024, 2025 and 2026) weighted 20 %, respectively, and a three-year cumulative goal (2024-2026) weighted 40 %.
−Removed: The 2022 PSU metric, Earnings per share, vests contingent upon meeting a three-year cumulative goal (2022-2024).
−Removed: The fair value of this PSU component is based upon the grant-date market price for the underlying stock.
−Removed: Compensation expense is recognized on a straight-line basis over a three-year vesting period, based on management's estimate of the number of shares expected to vest and based on meeting the performance metrics.
+Added: The fair value of this PSU component is determined using the grant-date market price for the underlying stock.
+Added: Compensation expense is recognized on a straight-line basis over the three-year vesting period, based on management's estimate of the number of shares expected to vest and based on achievement of the applicable performance targets.
If actual results exceed the stated targets, all plan participants have the potential to earn additional shares of common stock up to a maximum over-achievement of 100 % of the original grant.
1 unchanged sentence
Xerox 2025 Annual Report 157
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Market-Based Component :
+Added: The RTSR metric, included as part of the 2025 PSU, is based on Xerox Holdings Corporation's stock price appreciation, inclusive of dividends paid, measured over a three-year performance period (2025-2027).
+Added: RTSR will be determined by ranking Xerox Holdings Corporation and the companies within the S&P 600 Information Technology Index, as approved by the Compensation and Human Capital Committee of the Board, from highest to lowest according to their respective TSRs, for the three-year performance period.
+Added: Payout for this portion of the 2025 PSU will be determined based on the RTSR for the three-year measurement period, and based on this result, the RTSR modifier can increase or decrease the number of shares that ultimately vest by 15 %.
+Added: Final payout will be determined based on Xerox’s Operating income metric, and depending on the RTSR performance, a potential increase or decrease of 15 %, with a maximum over-achievement of 100 % of the original grant.
The RTSR metric, included as part of the 2024 PSU, is based on Xerox Holdings Corporation's stock price appreciation, inclusive of dividends paid, measured over three equally weighted performance periods (2024, 2024-2025, and 2024-2026).
5 unchanged sentences
Payout for the 2023 PSU will be determined based on the weighted average of Xerox Holdings Corporation's payout for each of the three performance periods.
−Removed: The Absolute Share Price metric, included as the market-based component of the 2022 PSU grant, is based on Xerox Holdings Corporation's average closing price for the last 20 trading days of the three-year performance period, inclusive of dividends during that period.
Payout for these portions of the PSU metrics will be determined based on total return targets.
13 unchanged sentences
(3) The weighted average of fair values used to record compensation expense as determined by the Monte Carlo simulation.
−Removed: Our RTSR and Absolute Share Price metrics are compared against total return targets to determine the payout as follows:
+Added: Our RTSR metrics are compared against total return targets to determine the payout as follows:
2025 2024 2023
1 unchanged sentence
Percentile Ranking Return Targets (1)
−Removed: Total Return Targets (1)
+Added: Percentile Ranking Return Targets (1)
+Added: 200 % n/a n/a 75th and above
+Added: 100 % n/a n/a 50th
+Added: 50 % n/a n/a 25th
25 % n/a 75th and above
−Removed: $ 30.00 and above
−Removed: 100 % n/a 50th $ 25.00
−Removed: 50 % n/a 25th $ 20.00
15 % 75th and above
−Removed: 0 % 50th Below 25th
−Removed: Below $ 20.00
+Added: 0 % 50th 50th Below 25th
( 15 )% 25th and below n/a n/a
+Added: ( 25 )% n/a 25th and below n/a
(1) For performance between the levels described above, the degree of vesting is interpolated on a linear basis.
−Removed: Compensation expense for the market-based component of the PSU awards is recognized on a straight-line basis over the vesting period based on the fair value determined by the Monte Carlo simulation and, except in cases of employee forfeiture, cannot be reversed regardless of performance.
Xerox 2025 Annual Report 158
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
+Added: Compensation expense for the market-based component of the PSU awards is recognized on a straight-line basis over the vesting period based on the fair value determined by the Monte Carlo simulation and, except in cases of employee forfeiture, cannot be reversed regardless of performance.
With respect to all stock-based compensation programs, Management’s estimate of the number of shares expected to vest at the time of grant reflects an estimate for forfeitures based on our historical forfeiture rate to date.
7 unchanged sentences
8,951 5.51 4,159 14.09 3,382 16.56
−Removed: ( 2,030 ) 19.04 ( 1,593 ) 23.73 ( 1,975 ) 24.56
+Added: Vested ( 2,370 ) 17.78 ( 2,030 ) 19.04 ( 1,593 ) 23.73
Forfeited ( 973 ) 8.20 ( 487 ) 17.27 ( 338 ) 19.27
2 unchanged sentences
Outstanding at January 1 2,066 $ 21.59 2,039 $ 24.18 1,729 $ 28.38
−Removed: Granted 1,243 13.89 940 22.97 977 25.72
1,912 4.46 1,243 13.89 940 22.97
+Added: Vested — — — — — —
Forfeited/Expired ( 1,560 ) 15.67 ( 1,216 ) 17.67 ( 630 ) 33.86
−Removed: ( 1,216 ) 17.67 ( 630 ) 33.86 ( 1,422 ) 20.98
Outstanding at December 31 2,418 11.87 2,066 21.59 2,039 24.18
−Removed: (1) 2023 includes approximately 445 RSUs associated with a special retention award.
−Removed: (2) 2022 includes approximately 469 RSUs and 644 PSUs associated with the accelerated vesting of all outstanding equity awards, according to the terms of the award agreement, in connection with the passing of Xerox Holding's former CEO.
−Removed: No other PSUs vested in 2022.
−Removed: (3) 2022 includes approximately 1,125 PSUs granted in 2019 that were adversely affected permanently by the impacts from the COVID-19 pandemic, and therefore no shares were earned.
+Added: (1) RSUs and PSUs granted in 2025 reflect a higher number of shares granted, primarily due to a lower average grant-date fair value of the Company’s common stock.
Unrecognized compensation cost related to non-vested stock-based awards at December 31, 2025 was as follows:
14 unchanged sentences
Xerox 2025 Annual Report 159
−Removed: Table of Contents Legal Sign-off 2.24.25
−Removed: Note 24 – Other Comprehensive Loss
−Removed: Other Comprehensive Loss is comprised of the following:
+Added: Table of Conten t s
+Added: Note 24 – Other Comprehensive Income (Loss)
+Added: Other Comprehensive Income (Loss) is comprised of the following:
Year Ended December 31,
1 unchanged sentence
Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax
−Removed: Net Translation Adjustments (Losses) Gains $ ( 112 ) $ ( 120 ) $ 191 $ 191 $ ( 376 ) $ ( 376 )
+Added: Net Translation Adjustments Gains (Losses) $ 305 $ 305 $ ( 112 ) $ ( 120 ) $ 191 $ 191
Unrealized (Losses) Gains
2 unchanged sentences
4 4 10 9 18 17
−Removed: Other losses — — — — ( 1 ) ( 1 )
−Removed: Net Unrealized Gains (Losses) 10 9 — 1 ( 1 ) ( 2 )
+Added: Net Unrealized (Losses) Gains ( 11 ) ( 10 ) 10 9 — 1
Defined Benefit Plans Gains (Losses)
4 unchanged sentences
61 57 73 65 35 26
−Removed: Other gains (losses) (3)
+Added: Other (losses) gains (3)
( 89 ) ( 89 ) 29 29 ( 49 ) ( 49 )
Changes in Defined Benefit Plans Gains (Losses) 116 93 98 88 ( 424 ) ( 331 )
−Removed: Other Comprehensive Loss $ ( 4 ) $ ( 23 ) $ ( 233 ) $ ( 139 ) $ ( 618 ) $ ( 549 )
+Added: Other Comprehensive Income (Loss) $ 410 $ 388 $ ( 4 ) $ ( 23 ) $ ( 233 ) $ ( 139 )
_____________
−Removed: (1) Reclassified to Cost of sales - refer to Note 16 - Financial Instruments for additional information regarding our cash flow hedges.
+Added: (1) Reclassified to Cost of sales and interest expense- refer to Note 16 - Financial Instruments for additional information regarding our cash flow hedges.
(2) Reclassified to Total Net Periodic Benefit Cost - refer to Note 18 - Employee Benefit Plans for additional information.
4 unchanged sentences
Cumulative translation adjustments $ ( 1,861 ) $ ( 2,166 ) $ ( 2,046 )
−Removed: Other unrealized gains (losses), net 6 ( 3 ) ( 4 )
+Added: Other unrealized (losses) gains, net ( 4 ) 6 ( 3 )
Benefit plans net actuarial losses and prior service credits ( 1,446 ) ( 1,539 ) ( 1,627 )
2 unchanged sentences
Xerox 2025 Annual Report 160
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
Note 25 – Loss per Share
8 unchanged sentences
Basic Loss per Share:
+Added: $ ( 8.25 ) $ ( 10.75 ) $ ( 0.09 )
Diluted Loss per Share:
9 unchanged sentences
Diluted Loss per Share:
+Added: $ ( 8.25 ) $ ( 10.75 ) $ ( 0.09 )
The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands):
3 unchanged sentences
Convertible notes (1)
+Added: 19,196 19,196 —
Total Anti-Dilutive Securities 40,405 34,708 13,684
3 unchanged sentences
Xerox 2025 Annual Report 161
−Removed: Table of Contents Legal Sign-off 2.24.25
+Added: Table of Conten t s
+Added: Note 26 – Subsequent Events
+Added: We have evaluated subsequent events through the date the financial statements were issued.
+Added: Warrant Dividend
+Added: In January 2026 the Board of Directors of Xerox Holdings Corporation approved a pro-rata distribution of warrants to holders (collectively, the Eligible Holders) of Xerox’s common stock, par value $ 1.00 per share (the Common Stock), Series A Convertible Perpetual Voting Preferred Stock (the Series A Preferred Stock) and 3.75 % Convertible Senior Notes due 2030 (the Convertible Notes).
+Added: On February 12, 2026, 77,271,234 warrants were issued and distributed, at no cost, to the Eligible Holders of record as of the close of business on February 9, 2026.
+Added: Each holder of record of the Common Stock as of the Record Date received one warrant for every two shares of Xerox common stock held, rounded down to the nearest whole warrant.
+Added: Holders of record of the Series A Preferred Stock and the Convertible Notes received warrants based on the same ratio in the manner determined by the charter governing the Series A Preferred Stock and the indenture governing the Convertible Notes, respectively.
+Added: Each warrant entitles the holder to purchase one share of Common Stock (the Warrant Exercise Rate) at an exercise price of $ 8.00 per share (the Warrant Exercise Price), subject to the terms and conditions of the warrant agreement, and may be exercised (a) for cash, at any time prior to expiration of the warrants, and (b) using designated outstanding Xerox debt securities (the Designated Notes) at any time prior to the earlier of the expiration of the warrants and the termination of the right to use Designated Notes to exercise warrants.
+Added: Xerox Holdings Corporation may also elect, in its sole and absolute discretion, to remove one or more or all series of its or Xerox Corporation’s notes from being “Designated Notes,” by giving notice to holders of warrants by way of press release.
+Added: Such redesignation shall only be effective 20 consecutive Business Days from (and including) the date of publication of notice.
+Added: The Warrant Exercise Rate is subject to certain customary anti-dilution adjustments as set forth in the warrant agreement and Xerox Holdings Corporation’s right to voluntarily increase the Warrant Exercise Rate in its sole and absolute discretion from time to time.
+Added: The Warrant Exercise Price is subject to Xerox Holdings Corporation’s right to voluntarily decrease the Warrant Exercise Price in its sole and absolute discretion from time to time.
+Added: The warrants have an expiration date of two years from the distribution date, unless an Early Expiration Price Condition Date (as defined below) is met, in which case the expiration will be accelerated.
+Added: The warrants will be subject to early expiration if the volume-weighted average price of Xerox common stock equals or exceeds 100 % of the then-applicable warrant exercise price for 20 trading days within any 30 consecutive trading day period (such final day, the Early Expiration Price Condition Date).
+Added: If this condition is met, the warrants will expire at 5:00 p.m.
+Added: New York City time on the business day immediately following the Early Expiration Price Condition Date or such other date as Xerox Holdings Corporation may elect in accordance with the warrant agreement.
+Added: Joint Venture Arrangement
+Added: On February 17, 2026 (the Closing Date), Xerox Corporation and certain investors including certain funds and accounts managed by Angelo, Gordon & Co., L.P.
+Added: (collectively, TPG) entered into a joint venture arrangement (the Joint Venture) pursuant to which TPG funded $ 405 aggregate principal amount of senior secured term loans (the Term Loans) to, and purchased $ 45 of Class A Units from, XRX Brandco Holdings LLC (IPCo Holdings) (the Joint Venture Financing).
+Added: The proceeds of the Joint Venture Financing were distributed by dividend from IPCo Holdings to Xerox Corporation (the Distribution) and are expected to be used for general corporate purposes and opportunistically addressing Xerox Holdings’ capital structure over time (which may include the redemption or repayment of debt).
+Added: Total transaction fees and expenses of $ 42 , including legal expenses and arranger fees, were paid by Xerox Corporation associated with the formation of the Joint Venture.
+Added: In connection with the formation of the Joint Venture, Xerox Corporation contributed (the Contribution) certain intellectual property and related assets, including the trademarks in respect of the Xerox brand (collectively, the Contributed IP), to IPCo Holdings and received Class B Units of IPCo Holdings.
+Added: Subsequent to the Joint Venture Financing, the Distribution and the Contribution, Xerox Corporation contributed approximately $ 5 in cash to the common equity capital of IPCo Holdings.
+Added: Credit Agreement
+Added: On the Closing Date, IPCo Holdings, as borrower, entered into a credit agreement (the Credit Agreement) with Alter Domus (US) LLC, as the administrative agent and the collateral agent, and the lending institutions from time to time party thereto, as lenders.
+Added: Xerox 2025 Annual Report 162
+Added: Table of Conten t s
+Added: The Term Loans are guaranteed by XRX Brandco LLC (IPCo), a wholly owned subsidiary of IPCo Holdings.
+Added: Borrowings under the Term Loans will bear interest at a per annum rate equal to either (a) a base rate plus a margin of 7.125 % for ABR Loans (as defined in the Credit Agreement), or (b) the applicable term SOFR rate plus a margin of 8.125 % for SOFR Loans (as defined in the Credit Agreement).
+Added: The Term Loans mature on the date that is the fifth anniversary of the Closing Date.
+Added: The Term Loans amortize at a quarterly rate of 4.50 % of the aggregate principal amount of Term Loans outstanding as of the Closing Date, with such amounts payable in equal installments, commencing following the fiscal quarter ending September 30, 2026.
+Added: The remaining outstanding principal balance is due in full at maturity.
+Added: The Term Loans are subject to customary voluntary and mandatory prepayment provisions, including requirements to prepay the Term Loans with the proceeds of certain indebtedness and excess cash flow.
+Added: The Credit Agreement also contains customary affirmative covenants, representations and warranties and events of default for borrowers and facilities of this type, including, among others, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other indebtedness and insolvency events.
+Added: In addition, the Credit Agreement includes customary negative covenants for borrowers and facilities of this type that, among other things, restrict the ability of IPCo Holdings and its subsidiaries to pay dividends or make other distributions, make investments, incur additional debt and engage in certain other activities.
+Added: The obligations of IPCo Holdings and IPCo under the Credit Agreement are secured by a pledge of substantially all of their respective assets.
+Added: Shared Services and License Agreement
+Added: On the Closing Date, in connection with the formation of the Joint Venture, Xerox Holdings, Xerox Corporation, IPCo Holdings and IPCo entered into a Shared Services and License Agreement (the SSLA), pursuant to which (i) Xerox Holdings agreed to provide certain services to IPCo Holdings and IPCo and (ii) IPCo granted a worldwide royalty-free, non-exclusive, non-assignable, and sublicensable license in the Contributed IP to Xerox Corporation and, at the election of Xerox Holdings, certain of its subsidiaries (collectively, the Licensees).
+Added: The Licensees are required to pay IPCo a royalty fee equal to 2.0 % of specified consolidated revenue generated by Holdings and its subsidiaries from the Contributed IP.
+Added: The royalty is payable in arrears on a quarterly basis.
+Added: The obligations of the Licensees in respect of the SSLA are guaranteed by and secured by the assets of certain subsidiaries of Xerox Holdings (the SSLA Guarantee).
+Added: The SSLA Guarantee contains representations and warranties and covenants limiting certain such guarantors and certain other subsidiaries of Xerox Holdings from incurring debt and liens, selling assets, making investments and limiting certain other transactions and requiring certain such guarantors and other subsidiaries to maintain at the end of each quarter a specified asset coverage ratio, generally defined as the ratio of certain assets held by such guarantors and subsidiaries to the outstanding amount of the Term Loans and Class A Units (net of cash held by IPCo Holdings).
+Added: The SSLA Guarantee also contains certain events of default relating to, among others, the breach of such representations, warranties and covenants and defaults under the SSLA or SSLA Guarantee.
+Added: The initial term of the SSLA is 10 years from the effective date, with automatic five-year renewal periods, provided either Xerox Holdings or IPCo may terminate the SSLA effective as of the end of the then-applicable term on 18 months’ advance notice to the other parties.
+Added: In addition, the SSLA may be terminated by IPCo upon certain events of default by Xerox Holdings, including non-payment, material breach, insolvency or change of control, subject to applicable cure periods.
+Added: Xerox Holdings may terminate the SSLA with IPCo’s consent or upon certain breaches by IPCo.
+Added: Upon termination, the Licensees’, and their sublicensees’, rights to use the Contributed IP also cease, subject to a 90-day sell-off period for existing inventory.
+Added: Xerox 2025 Annual Report 163
+Added: Table of Conten t s
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.