What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2025-11-10 · 318 added, 832 removed, 959 unchanged (55% of the section changed)

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions, except per-share data) 2026 2025

1 unchanged sentence

Services, maintenance, rentals and other 926 900

968 940 2,779 2,886

Total Revenues 1,846 1,457

2 unchanged sentences

Cost of services, maintenance, rentals and other 697 649

728 643 2,022 2,033

Research, development and engineering expenses 64 42

Selling, administrative and general expenses 430 378

Goodwill impairment — 1,058 — 1,058

Restructuring and related costs, net 45 ( 1 )

1 unchanged sentence

Divestitures — ( 4 )

Other expenses, net 105 43 253 120

Non-financing interest expense 84 33

Other (income) expenses, net ( 31 ) 35

Total Costs and Expenses 1,919 1,524

6 unchanged sentences

Diluted (Loss) per Share $ ( 0.84 ) $ ( 0.75 )

_____________

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

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

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

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2026 2025

2 unchanged sentences

Translation adjustments, net ( 77 ) 105

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

Unrealized gains (losses), net 4 ( 2 )

Changes in defined benefit plans, net 40 ( 21 )

7 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

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

(in millions, except share data in thousands) March 31,

2026 December 31,

41 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended

September 30,

Three Months Ended

(in millions) 2026 2025

1 unchanged sentence

Net (Loss) $ ( 105 ) $ ( 90 )

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

Adjustments required to reconcile Net (loss) to Net cash used in operating activities:

Depreciation and amortization 100 60

Provisions 18 18

Inventory-related purchase accounting adjustment - noncash 102 —

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

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

Gain on early extinguishment of debt ( 56 ) —

Net loss (gain) on sales of businesses and assets 2 ( 3 )

Divestitures — ( 4 )

Stock-based compensation 9 12

Goodwill impairment — 1,058

Restructuring and asset impairment charges 44 ( 1 )

2 unchanged sentences

Contributions to retirement plans ( 36 ) ( 34 )

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

Increase in accounts receivable and billed portion of finance receivables ( 106 ) ( 12 )

Increase in inventories ( 49 ) ( 137 )

1 unchanged sentence

Decrease in finance receivables 66 128

Decrease in other current and long-term assets 4 16

Increase (decrease) in accounts payable 4 ( 143 )

Increase in other current and long-term assets ( 38 ) ( 16 )

Increase in accounts payable 58 89

Decrease in accrued compensation ( 8 ) ( 30 )

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

Decrease in other current and long-term liabilities ( 9 ) ( 48 )

Net change in income tax assets and liabilities 12 ( 2 )

Net change in derivative assets and liabilities ( 1 ) 9

Other operating, net ( 14 ) 11

Net cash provided by operating activities 16 160

Net cash used in operating activities ( 144 ) ( 89 )

Cash Flows from Investing Activities

3 unchanged sentences

Other investing, net ( 5 ) ( 2 )

Net cash used in investing activities ( 694 ) ( 26 )

Net cash (used in) provided by investing activities ( 24 ) 6

Cash Flows from Financing Activities

Net proceeds from short term debt 218 —

Proceeds from issuance of long-term debt 446 3

Payments on long-term debt ( 191 ) ( 107 )

Purchases of capped calls — ( 23 )

Dividends ( 10 ) ( 39 )

Payments to acquire treasury stock, including fees — ( 3 )

Other financing, net ( 3 ) ( 16 )

1 unchanged sentence

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 2 ) 1

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

Increase (decrease) in cash, cash equivalents and restricted cash 72 ( 241 )

Cash, cash equivalents and restricted cash at beginning of period 565 631

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2026 2025

1 unchanged sentence

Services, maintenance, rentals and other 926 900

968 940 2,779 2,886

Total Revenues 1,846 1,457

2 unchanged sentences

Cost of services, maintenance, rentals and other 697 649

728 643 2,022 2,033

Research, development and engineering expenses 64 42

Selling, administrative and general expenses 430 377

Goodwill impairment — 1,058 — 1,058

Restructuring and related costs, net 45 ( 1 )

1 unchanged sentence

Divestitures — ( 4 )

Other expenses, net 104 43 248 120

Non-financing interest expense 84 33

Other (income) expenses, net ( 31 ) 33

Total Costs and Expenses 1,919 1,521

2 unchanged sentences

Net (Loss) $ ( 105 ) $ ( 87 )

_____________

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

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

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

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2026 2025

2 unchanged sentences

Translation adjustments, net ( 77 ) 105

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

Unrealized gains (losses), net 4 ( 2 )

Changes in defined benefit plans, net 40 ( 21 )

7 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions) September 30,

(in millions) March 31,

2026 December 31,

40 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended

September 30,

Three Months Ended

(in millions) 2026 2025

1 unchanged sentence

Net (Loss) $ ( 105 ) $ ( 87 )

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

Adjustments required to reconcile Net (loss) to Net cash used in operating activities:

Depreciation and amortization 100 60

Provisions 18 18

Inventory-related purchase accounting adjustment - noncash 102 —

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

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

Gain on early extinguishment of debt ( 56 ) —

Net loss (gain) on sales of businesses and assets 2 ( 3 )

Divestitures — ( 4 )

Stock-based compensation 9 12

Goodwill impairment — 1,058

Restructuring and asset impairment charges 44 ( 1 )

2 unchanged sentences

Contributions to retirement plans ( 36 ) ( 34 )

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

Increase in accounts receivable and billed portion of finance receivables ( 106 ) ( 12 )

Increase in inventories ( 49 ) ( 137 )

1 unchanged sentence

Decrease in finance receivables 66 128

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

Increase (decrease) in accounts payable 4 ( 143 )

Increase in other current and long-term assets ( 38 ) ( 19 )

Increase in accounts payable 58 89

Decrease in accrued compensation ( 8 ) ( 30 )

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

Decrease in other current and long-term liabilities ( 9 ) ( 48 )

Net change in income tax assets and liabilities 12 ( 2 )

Net change in derivative assets and liabilities ( 1 ) 9

Other operating, net ( 14 ) 11

Net cash provided by operating activities 16 160

Net cash used in operating activities ( 144 ) ( 89 )

Cash Flows from Investing Activities

2 unchanged sentences

Acquisitions, net of cash acquired — 1

Other investing, net — ( 10 )

Net cash used in investing activities ( 685 ) ( 10 )

Net cash (used in) provided by investing activities ( 19 ) 8

Cash Flows from Financing Activities

Net proceeds from short term debt 218 —

Proceeds from issuance of long-term debt 446 3

4 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 2 ) 1

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

Increase (decrease) in cash, cash equivalents and restricted cash 71 ( 240 )

Cash, cash equivalents and restricted cash at beginning of period 564 630

13 unchanged sentences

This is a combined report of Xerox Holdings and Xerox, which includes separate unaudited Condensed Consolidated Financial Statements for each registrant.

The accompanying unaudited Condensed Consolidated Financial Statements of both Xerox Holdings and Xerox have been prepared in accordance with the accounting policies described in the Combined 2024 Annual Report on Form 10-K (2024 Annual Report), except as noted herein, and the interim reporting requirements of Form 10-Q.

The accompanying unaudited Condensed Consolidated Financial Statements of both Xerox Holdings and Xerox have been prepared in accordance with the accounting policies described in the Combined 2025 Annual Report on Form 10-K (the 2025 Annual Report), except as noted herein, and the interim reporting requirements of Form 10-Q.

Accordingly, certain information and note disclosures normally included in our annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted.

4 unchanged sentences

The condensed balance sheet at December 31, 2025, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

Certain reclassifications have been made to the amounts for prior years in order to conform to the current year's presentation.

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

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

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

Lexmark Acquisition

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

Refer to Note 6 - Acquisition for additional information.

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

As such, it was determined that there are two reportable segments - Print and Other, and IT Solutions.

Prior to this change, the company had two reportable segments - Print and Other, and Xerox Financial Services (XFS).

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.

Refer to Note 4 - Segment Reporting for additional information regarding this change.

Joint Venture Arrangement

On February 17, 2026 (the Closing Date), Xerox Corporation and certain investors including certain funds and accounts managed by Angelo, Gordon & Co., L.P.

(collectively, TPG) entered into a joint venture arrangement (the Joint Venture) pursuant to which TPG and certain other investors 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).

The proceeds of the Joint Venture Financing were distributed by IPCo Holdings to Xerox and are expected to be used for general corporate purposes.

In connection with the formation of the Joint Venture, Xerox Corporation contributed (the Contribution) certain intellectual property and related assets, including the trademarks associated with the Xerox brand (collectively, the Contributed IP), to IPCo Holdings and received Class B Units of IPCo Holdings.

Subsequent to the Joint Venture Financing, the distribution of the proceeds of the Joint Venture from IPCo Holdings to Xerox Corporation, and the Contribution, Xerox Corporation contributed approximately $ 5 in cash to the common equity capital of IPCo Holdings.

IPCo Holdings was formed as an intellectual property holding and licensing entity designed to manage, protect and monetize the Contributed IP.

Xerox evaluated IPCo Holdings under ASC 810, Consolidation, and determined that it is a variable interest entity (VIE) as IPCo Holdings is thinly capitalized and its equity holders lack substantive decision-making rights and participation in residual returns.

Xerox also determined that it is the primary beneficiary, as it has the power to direct the activities that most significantly impact IPCo Holdings’ economic performance through its Class B ownership and governance rights and retains a potentially significant residual economic interest.

Accordingly, Xerox Corporation began consolidating IPCo Holdings in its Condensed Consolidated Financial Statements in the first quarter of 2026,

Xerox 2026 Form 10-Q 10

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

Three Months Ended

September 30, 2024 Nine Months Ended

September 30, 2024

Previously Reported Reclassification As Reported Previously Reported Reclassification As Reported

Services, maintenance, rentals and other $ 902 $ 38 $ 940 $ 2,768 $ 118 $ 2,886

Financing 38 ( 38 ) — 118 ( 118 ) —

Cost of services, maintenance, rentals and other $ 617 $ 26 $ 643 $ 1,951 $ 82 $ 2,033

Cost of financing 26 ( 26 ) — 82 ( 82 ) —

with all intercompany balances and transactions eliminated in consolidation.

At March 31, 2026, total assets and liabilities of IPCo Holdings was $ 902 and $ 452 , respectively.

The activities that most significantly impact IPCo Holdings’ economic performance include the management, protection, enforcement, licensing and monetization of the Contributed IP, including activities under the Shared Services and License Agreement described below.

The assets of IPCo Holdings and its subsidiary are generally not available to satisfy the obligations of Xerox Corporation or Xerox Holdings Corporation, except to the extent distributed or otherwise made available in accordance with the Joint Venture agreements.

The obligations of IPCo Holdings under the Term Loans are secured by substantially all assets of IPCo Holdings and IPCo, including specified intellectual property assets, equity interests and related collateral.

Cash and cash equivalents received by IPCo Holdings and IPCo are required to be deposited into a reserve account and may be used only for specified purposes, including payments on the Term Loans, payments or distributions in respect of the Class A Units, permitted overhead and other amounts permitted under the Joint Venture financing documents.

The carrying amounts and classification of IPCo Holdings’ consolidated assets and liabilities are included in the Company’s Condensed Consolidated Balance Sheet.

Such assets principally include the Contributed IP and restricted cash or cash held by IPCo Holdings and IPCo, and such liabilities principally include the Term Loans and related obligations.

The Company’s exposure to IPCo Holdings includes its retained Class B Units, its rights and obligations under the SSLA, guarantees and collateral support provided by certain subsidiaries of Xerox Holdings, and its obligation to pay royalties under the SSLA.

The Company has not provided financial or other support to IPCo Holdings that it was not contractually required to provide.

Creditors and beneficial interest holders of IPCo Holdings have recourse to IPCo Holdings and IPCo assets and to the specific guarantees and collateral support provided under the SSLA Guarantee and related financing documents, but do not have recourse to the general credit of Xerox Corporation or Xerox Holdings Corporation except as expressly provided under those contractual arrangements.

Refer to Note 12 - Debt for additional information regarding the Joint Venture Financing.

Shared Services and License Agreement

On the Closing Date, in connection with the formation of the Joint Venture, Xerox Holdings, Xerox Corporation, IPCo Holdings and Xerox Brandco LLC (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 licenses to the Contributed IP to Xerox Corporation and, at the election of Xerox Holdings, certain of its subsidiaries (collectively, the Licensees).

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.

The royalty is payable quarterly and is subject to a subsequent true-up based on specified consolidated revenue and will be eliminated in consolidation along with royalty income recognized by IPCo.

The royalty fees are required to be deposited into a reserve account and may be used only for specified purposes under the Joint Venture financing documents, including payments of interest and amortization on the Term Loans and payments or distributions in respect of the Class A Units.

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).

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).

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.

The SSLA also contains certain minimum revenue covenants and other provisions that could require Xerox Holdings or its subsidiaries to provide additional support or payments to IPCo Holdings or IPCo in specified circumstances.

Any such amounts would be eliminated in consolidation to the extent payable to consolidated entities.

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

Xerox 2026 Form 10-Q 11

months’ advance notice to the other parties.

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.

Xerox Holdings may terminate the SSLA with IPCo’s consent or upon certain breaches by IPCo.

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.

Because IPCo Holdings is consolidated, royalty expense recognized by Xerox Corporation and royalty income recognized by IPCo, as well as related intercompany balances, are eliminated in consolidation.

Amounts payable to holders of the Term Loans and Class A Units that are not eliminated in consolidation are reflected in the Company’s Condensed Consolidated Financial Statements based on their respective classification.

Interim Impairment Evaluation

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

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

As noted above, during the first quarter 2025, the Company made a change to how it reports its operating and reportable segments, and as such is reporting two new operating and reportable segments - Print and Other, and IT Solutions.

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

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

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

The change in reporting units was also considered a triggering event indicating a test for goodwill impairment was required as of January 1, 2025 before and after the change in reporting units.

The Company performed those impairment tests, which did not result in the identification of an impairment loss as of January 1, 2025.

As a result of the change in reporting units, effective January 1, 2025, we estimated the fair value of our new reporting units.

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

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

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

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

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

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

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

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

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

As of March 31, 2026, notwithstanding the decline in the Company's market capitalization during the first quarter, which to some degree was impacted by macro-economic and geopolitical uncertainty, we determined that we did not have a triggering event requiring a quantitative assessment of Goodwill.

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

We will continue to monitor developments throughout the remainder of 2026 including updates to our forecasts as well as discount rates and our market capitalization, and as a result, an update of our assessment and related estimates may be required in the future.

Change in Presentation

During the first quarter 2026, the Company revised the presentation of its Condensed Consolidated Statements of (Loss) to separately present Non-financing interest expense, which was previously included within Other (income) expenses, net.

Management believes that separate presentation of this caption provides more meaningful information to investors regarding the Company’s financial performance.

Prior period amounts have been reclassified to conform to the current period presentation.

This reclassification impacted the Statements of (Loss) of both Xerox Holdings Corporation and Xerox Corporation, however, the reclassification had no impact on previously reported Total Costs and expenses, or Net (Loss):

Three months ended March 31, 2025

Previously Reported Reclassification As Reported

Non-financing interest expense $ — $ 33 $ 33

Other (income) expense, net - Xerox Holdings Corporation 68 ( 33 ) 35

Other (income) expense, net - Xerox Corporation 66 ( 33 ) 33

Xerox 2026 Form 10-Q 12

Valuation Allowance

We record the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and the amounts reported, as well as net operating loss and tax credit carryforwards.

Deferred tax assets are assessed for realizability and, in each of the tax jurisdictions in which we operate, a valuation allowance is recorded to reduce the total deferred tax asset to an amount that will, more-likely-than-not, be realized in the future.

We apply judgment in assessing the realizability of these deferred tax assets and the need for any valuation allowances.

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

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

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

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

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

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

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

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

Tax Law Change

On July 4, 2025, H.R.

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

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

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

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

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

Note 2 – Recent Accounting Pronouncements

1 unchanged sentence

The ASUs listed below apply to both registrants.

ASUs not listed below were assessed and determined to be not applicable to the Condensed Consolidated Financial Statements of either registrant.

Except for the Accounting Standard Updates (ASUs) discussed below, the new ASUs issued by the FASB during 2025 did not have any significant impact on the Company.

ASUs not listed below were assessed and determined to be not applicable to the Condensed Consolidated Financial Statements of either registrant, nor were they expected to have any significant impact on the Company.

Accounting Standard Updates to be Adopted:

Interim Reporting - Narrow-Scope Improvements

In December 2025, the FASB issued ASU 2025-11 , Interim Reporting (Topic 270):

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.

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.

The amendments are effective for interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU on its interim disclosures and consolidated financial statements.

Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements

In November 2025, the FASB issued ASU 2025-09 , Derivatives and Hedging (Topic 815):

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.

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.

The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods therein.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU on its hedge accounting policies and consolidated financial statements.

Intangibles - Goodwill and Other - Internal Use Software

9 unchanged sentences

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

Financial Instruments - Credit Losses

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

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

Xerox 2025 Form 10-Q 13

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

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

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

Income Statement

3 unchanged sentences

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

Accounting Standard Updates Recently Adopted:

Financial Instruments - Credit Losses

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

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

This ASU permits entities to apply a practical expedient when estimating credit losses.

Xerox 2026 Form 10-Q 13

We adopted this update prospectively in 2026 and the adoption did not have a material impact on the Company's consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04 , Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments , which is intended to clarify requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion.

This ASU is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted, and should be applied either prospectively or retrospectively.

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

Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09 , Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The amendments are effective for the Company’s annual periods beginning January 1, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively.

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

Other Updates

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

• Derivatives and Hedging and Revenue from Contracts with Customers:

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

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

Early adoption is permitted.

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

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.

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

• Business Combinations and Consolidation:

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.

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

Xerox 2025 Form 10-Q 14

We adopted this update prospectively in 2026;

there were no events or transactions related to our 3.75 % Convertible Senior Notes due in 2030 in the first quarter 2026 that were affected by this update.

Note 3 – Revenue

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Primary geographical markets (1) :

4 unchanged sentences

Asia Pacific 48 13

Other 49 49 140 151

Total Revenues $ 1,846 $ 1,457

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Supplies, paper and other sales 437 168

445 192 789 575

IT products (2)(3)

165 57 423 162

Maintenance agreements (2)

440 370 1,187 1,145

IT products (3)

Service arrangements (4)

425 454 1,294 1,394

Rental and other 60 70

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Direct equipment lease (5)

$ 117 $ 195 $ 337 $ 520

Distributors & resellers (6)

480 240 927 699

Customer direct 304 236

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(1) Geographic area data is based upon the location of the subsidiary reporting the revenue.

(2) Certain prior year amounts have been reclassified in order to conform to the current year's presentation.

(3) IT products include IT hardware and software solutions sold by the IT Solutions segment.

(2) 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) IT products include IT hardware and software solutions sold by the IT Solutions segment.

(4) Primarily includes revenues from our Print outsourcing arrangements including revenues from embedded operating leases in those arrangements.

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Contract Assets and Liabilities:

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

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

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

Our contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time and were $ 37 and $ 34 at March 31, 2026 and December 31, 2025, respectively.

Our contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advance billings for maintenance and other services to be performed and were approximately $ 271 and $ 279 at March 31, 2026 and December 31, 2025, respectively.

The majority of the balance at March 31, 2026 will be amortized to revenue over the next 30 months.

Xerox 2026 Form 10-Q 14

3 unchanged sentences

( 76 ) ( 59 )

Cash received (2)

Balance at March 31 st

Revenue recognized (1)

( 76 ) ( 47 )

Cash received (2)

Balance at June 30 th

Revenue recognized (1)

( 116 ) ( 49 )

Cash received (2)

Billings and customer advances (2)

Foreign currency and other — ( 4 )

Acquisition (3)

Balance at September 30 th

Balance at March 31 st

_____________

(1) Reflects amounts included in the beginning balance.

(1) Reflects amounts included in the January 1st beginning balance.

(2) Excludes revenue recognized during the period.

(3) Includes currency.

(4) Reflects the Lexmark Acquisition.

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

(3) Includes ITSavvy acquisition-related activity.

Our unsatisfied performance obligations primarily relate to multi-year managed services arrangements and extended warranty contracts where revenue is recognized over time.

The aggregate amount of the transaction price allocated to unsatisfied performance obligations including the amounts, included in contract liabilities for committed customers was $ 659 at March 31, 2026.

The Company expects to recognize these revenues over the next one to five years based upon the nature of the associated agreements.

Estimated amounts are subject to change due to various factors including, but not limited to the following:

contract terminations, changes in contract scope, revised estimates, unrealized revenue adjustments, and currency fluctuations.

Contract Costs:

We incur the following contract costs as part of our revenue arrangements:

• Incremental direct costs of obtaining a contract are primarily sales commissions paid to salespeople and agents in connection with the placement of equipment with associated post sale services arrangements.

• Incremental direct costs of obtaining a contract are primarily sales commissions paid to salespeople and agents in connection with the placement of equipment with post sale services arrangements.

These costs are deferred and amortized to Selling Expenses on a straight-line basis over the estimated contract term, which is currently estimated to be approximately five years .

1 unchanged sentence

These costs are amortized over the contractual service period of the arrangement to cost of services.

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

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

Changes in contract costs, net are as follows:

3 unchanged sentences

Balance at March 31st, $ 160 $ 140

Customer contract costs deferred 18 13

Amortization of customer contract costs ( 17 ) ( 16 )

Balance at June 30th, $ 143 $ 131

Acquisition (2)

Customer contract costs deferred 16 17

Amortization of customer contract costs ( 17 ) ( 16 )

Balance at September 30th, $ 158 $ 133

_____________

(1) Includes currency

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

Refer to Note 6 - Acquisitions for additional information.

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

1 unchanged sentence

Note 4 – Segment Reporting

Our reportable segments are aligned with how we manage the business and view the markets we serve.

As such, it was determined that there are two reportable segments - Print and Other and IT Solutions .

Prior to this change, the company had determined that there were two reportable segments - Print and Other and Xerox Financial Solutions (XFS).

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.

During 2024, the Company acquired ITSavvy Acquisition Company, Inc.

(ITSavvy), a technology infrastructure solutions provider.

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 .

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.

Our reportable segments - Print and Other and IT Solutions - are aligned to how the Chief Operating Decision Maker (CODM), our Chief Executive Officer (CEO), allocates resources and assesses performance against the Company’s key growth strategies and are consistent with how we manage the business and view the markets we serve.

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.

This segment also includes our recent Lexmark Acquisition.

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

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

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

The product groupings range from:

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Customers also include graphic communication enterprises as well as channel partners including distributors and resellers.

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

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

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

Xerox 2025 Form 10-Q 17

Segment Policy

We derive the results of our business segments directly from our internal management reporting system.

The accounting policies that the Company uses to derive its segment results are substantially the same as those used by the Company in preparing its consolidated financial statements.

The segment results include a significant level of management estimates regarding the allocation of expenses for shared selling, administrative and general services.

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.

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.

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

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

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.

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.

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.

This segment provides services to clients in the U.S., Canada, the U.K., and Western Europe.

Selected financial information for our reportable segments was as follows:

Three months ended September 30,

Print and Other IT Solutions Corporate (1)

Total Print and Other IT Solutions Corporate (1)

Three months ended March 31, 2026

Print and Other IT Solutions Total Reportable Segments Corporate (1)

External revenue $ 1,692 $ 154 $ 1,846 $ — $ 1,846

Intersegment revenue (2)

— 4 — 4 — — — —

Segment Revenue $ 1,739 $ 226 $ — $ 1,965 $ 1,442 $ 86 $ — $ 1,528

Total $ 1,692 $ 156 $ 1,848 $ — $ 1,848

Reconciliation to Segment Profit

7 unchanged sentences

Intersegment expense (8)

— 4 — 4 — — — —

Segment profit $ 87 $ 6 $ 93 $ ( 21 ) $ 72

1 unchanged sentence

Interest income (9)

32 — — 32 38 — — 38

Interest expense (5)

1 unchanged sentence

Xerox 2026 Form 10-Q 16

Nine months ended September 30,

Print and Other IT Solutions Corporate (1)

Total Print and Other IT Solutions Corporate (1)

Three months ended March 31, 2025

Print and Other IT Solutions Total Reportable Segments (10)

Corporate (1)

External revenue $ 1,294 $ 163 $ 1,457 $ — $ 1,457

Intersegment revenue (2)

— 8 — 8 — — — —

Segment Revenue $ 4,399 $ 603 $ — $ 5,002 $ 4,364 $ 244 $ — $ 4,608

Total $ 1,294 $ 164 $ 1,458 $ — $ 1,458

Reconciliation to Segment Profit

7 unchanged sentences

Intersegment expense (8)

— 8 — 8 — — — —

Segment profit $ 41 $ 5 $ 46 $ ( 24 ) $ 22

1 unchanged sentence

Interest income (9)

97 — — 97 118 — — 118

Interest expense (5)

3 unchanged sentences

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

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

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

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

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

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

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

(3) Excludes the impact of a fixed asset purchase accounting adjustment related to the Lexmark Acquisition of $ 5 to Cost of sales and $ 6 to Cost of services, maintenance, rentals and other for the Print and Other Segment for the three months ended March 31, 2026, respectively.

(4) As a result of the exit of certain production print manufacturing operations, the Print and Other Segment excludes inventory-related charges of $ 5 within Cost of sales and $ 2 within Cost of services, maintenance, rentals and other for the three months ended March 31, 2025, respectively.

(5) Print and Other includes equipment financing interest expense associated with the financing debt of the Company.

This is fully allocated to the Print and Other segment in support of its Finance assets.

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

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

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

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

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

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

Corporate includes Non-financing interest expense.

(6) Selling, administrative and general expenses include bad debt expense related to the Print and Other segment of $ 5 and $ 9 for the three months ended March 31, 2026 and 2025, respectively.

(7) For the three months ended March 31, 2026 and 2025, the Print and Other segment excludes the following costs:

Transformation costs of $ 2 and $ 6 , respectively and Transaction and related costs, net of $ 4 and $ 3 , respectively.

(8) 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.

(10) Reflects financing income, which is included in Services, maintenance, rentals and other in the Condensed Consolidated Statements of Loss.

No interest income is allocated to the IT Solutions segment, as the segment has no finance assets.

(9) Print and Other includes financing income, which is included in Services, maintenance.

This is fully allocated to the Print and Other segment in support of its financing business.

No financing income is allocated to the IT Solutions segment, as the segment has no finance assets.

(10) The prior year presentation has been updated to conform with the current year's presentation.

Xerox 2026 Form 10-Q 17

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Pre-tax (Loss)

Pre-tax Income (Loss)

Total Segment Profit $ 93 $ 46

Goodwill impairment (1)

— ( 1,058 ) — ( 1,058 )

Corporate ( 21 ) ( 24 )

Restructuring and related costs, net ( 45 ) 1

Amortization of intangible assets ( 30 ) ( 10 )

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

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

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

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

Transformation-related costs (1)

Purchase Accounting Adjustment - Fixed Assets ( 11 ) —

Transaction-related costs ( 4 ) ( 3 )

Inventory-related impact - exit of certain production print manufacturing operations (2)

( 3 ) — ( 20 ) ( 44 )

Divestiture — 4

Other expenses, net ( 105 ) ( 43 ) ( 253 ) ( 120 )

Non-financing interest expense ( 84 ) ( 33 )

Other (income) expenses, net 31 ( 35 )

Total Pre-tax (Loss) $ ( 73 ) $ ( 67 )

3 unchanged sentences

Total Depreciation and amortization $ 100 $ 60

Interest Expense

Total reported segments $ 21 $ 26 $ 66 $ 82

Corporate 80 31 168 88

Total Interest expense $ 101 $ 57 $ 234 $ 170

Interest Income

Total reported segments $ 32 $ 38 $ 97 $ 118

Corporate 3 3 11 10

Total Interest income $ 35 $ 41 $ 108 $ 128

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

Other reporting unit.

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

Xerox 2025 Form 10-Q 20

(1) In the first quarter of 2026, Xerox Holdings Corporation renamed “Reinvention-related costs” to “Transformation-related costs.” This change in terminology did not affect the nature of the costs.

(2) As a result of the exit of certain production print manufacturing operations, the Print and Other Segment excludes inventory-related charges of $ 5 within Cost of sales and $ 2 within Cost of services, maintenance, rentals and other for the three months ended March 31, 2025, respectively.

Note 5 – Lessor

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Three Months Ended

September 30, Nine Months Ended

September 30,

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

Location in Statements of (Loss) 2026 2025

Revenue from sales type leases Sales $ 91 $ 112

Interest income on lease receivables Services, maintenance, rentals and other 32 38 97 118

Interest income on lease receivables (1)

Services, maintenance, rentals and other 27 33

Lease income - operating leases Services, maintenance, rentals and other 40 41

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Total Lease income $ 166 $ 195

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

(1) Primarily includes interest income from sales-type leases, as well as financing leases.

Profit at lease commencement on sales-type leases was estimated to be $ 17 and $ 31 for the three months ended March 31, 2026 and 2025, respectively.

Xerox 2026 Form 10-Q 18

Note 6 – Acquisition

Lexmark Acquisition

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

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

Total Purchase Consideration

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

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

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

Assets Acquired and Liabilities Assumed

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

No contingent consideration was recorded by Xerox.

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

Xerox 2025 Form 10-Q 21

The following table summarizes the preliminary allocation of total purchase consideration to the assets acquired and the liabilities assumed as of the date of the acquisition:

Assets acquired

Cash and cash equivalents $ 93

Accounts receivable, net 359

Finance receivables, net (1)

Inventories 421

Other current assets 111

Finance receivables due after one year, net (1)

Equipment on operating lease, net 65

Land, buildings and equipment, net 260

Intangible assets, net 763

Deferred tax assets 16

Other long-term assets 262

Total Assets acquired $ 2,623

Liabilities assumed

Accounts payable $ 476

Accrued compensation and benefits costs 56

Accrued expenses and other liabilities (2)

Long-term debt 323

Pension and other benefit liabilities 107

Post-retirement medical benefits 17

Other long-term liabilities (2)

Total Liabilities acquired $ 1,855

Net Assets acquired $ 768

_____________

(1) Comprised of sales-type lease receivables.

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

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

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

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

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

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

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

Intangible Assets

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

July 1, 2025 Estimated Useful Life

Customer relationships $ 530 10 years

Developed technology 123 7 years

Trademarks 110 7 years

Total Identifiable intangible assets $ 763

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

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

Xerox 2025 Form 10-Q 22

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Deferred Taxes

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

Pro Forma Information

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

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

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

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

The following table summarizes the pro forma financial information:

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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

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

The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions and the cost of financing the acquisitions had taken place on January 1, 2024.

Xerox 2025 Form 10-Q 23

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).

Total consideration paid to the Seller for the net assets acquired from Lexmark was $ 749 , which included Cash and cash equivalents acquired of $ 93 , as well as a working capital adjustment, which was finalized during the first quarter 2026.

The working capital adjustment resulted in a decrease of $ 19 to the total consideration paid, however, the cash related to this settlement was not released to Xerox from escrow by March 31, 2026.

Accordingly, the Company recorded the working capital settlement as a non-trade receivable in Other current assets in the Condensed Consolidated Balance Sheet at March 31, 2026.

Also during the first quarter 2026, the Company recorded additional measurement period adjustments resulting from changes in estimates to taxes as follows:

a decrease to Deferred tax assets of $ 2 , an increase to Accrued expenses and other liabilities of $ 5 , and an increase to Other long-term liabilities of $ 6 .

The working capital adjustment and the additional measurement period adjustments recorded during the first quarter 2026 resulted in a corresponding decrease to Goodwill of $ 6 .

The allocation of the purchase price for this acquisition has been prepared on a preliminary basis.

We expect that adjustments, primarily related to tax, may continue to be required as additional information becomes available.

Transaction expense for the Lexmark Acquisition was approximately $ 4 and $ 2 during the three months ended March 31, 2026 and 2025, respectively, and was recorded within Selling, administrative and general expenses.

Note 7– Accounts Receivable, Net

Accounts receivable, net were as follows:

September 30,

2026 December 31,

10 unchanged sentences

Balance at March 31 st

Provision 8 5

Charge-offs ( 7 ) ( 3 )

Recoveries and other (1)

Balance at June 30 th

Provision 4 8

Charge-offs ( 4 ) ( 5 )

Recoveries and other (1)

Balance at September 30 th

_____________

2 unchanged sentences

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

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

Xerox 2026 Form 10-Q 19

Accounts Receivable Sales Arrangements

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Accounts receivable sales (1)

$ 106 $ 117 $ 302 $ 314

(1) Losses on sales were not material.

Xerox 2025 Form 10-Q 24

Note 8 – Finance Receivables, Net

2 unchanged sentences

Finance receivables, net were as follows:

September 30,

2026 December 31,

16 unchanged sentences

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

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

Based on that assessment, the allowance for doubtful credit losses as a percentage of gross finance receivables (net of unearned income) was 3.3 % at March 31, 2026 and 3.1 % at December 31, 2025.

In determining the level of reserve required we critically assessed current and forecasted economic conditions and trends to ensure we objectively considered those expected impacts in the determination of our reserve.

10 unchanged sentences

Balance at March 31, 2026 $ 23 $ 5 $ 17 $ — $ 45

Provision 5 — 3 — 8

Charge-offs ( 3 ) — ( 4 ) — ( 7 )

( 1 ) 1 $ 1 $ — 1

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

Provision 3 — 1 — 4

Charge-offs ( 2 ) — ( 4 ) — ( 6 )

Balance at September 30, 2025 (2)

$ 27 $ 6 $ 20 $ — $ 53

Balance at December 31, 2024

2 unchanged sentences

Charge-offs, net ( 3 ) ( 1 ) ( 6 ) — ( 10 )

1 — ( 1 ) — —

Other — — 1 — 1

Balance at March 31, 2025 $ 25 $ 5 $ 23 $ — $ 53

Provision — 1 4 — 5

Charge-offs ( 6 ) ( 5 ) ( 3 ) — ( 14 )

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

Provision ( 5 ) 5 1 — 1

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

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

Finance receivables collectively evaluated for impairment

September 30, 2025 (2)(3)

_____________

September 30, 2024 (3)

$ 815 $ 238 $ 1,007 $ — $ 2,060

_____________

(1) Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.

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

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

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

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

10 unchanged sentences

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

Xerox 2025 Form 10-Q 26

• High Credit Risk:

4 unchanged sentences

The loss rates in this category in the normal course are generally in the range of 6 % to 7 %.

Xerox 2026 Form 10-Q 21

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

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

September 30, 2025

March 31, 2026

2026 2025 2024 2023 2022 Prior Total

21 unchanged sentences

Charge-offs $ — $ — $ 1 $ — $ — $ — $ 1

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

Non-Investment Grade 2 3 2 1 — — 8

Substandard — — 1 1 — — 2

Low Credit Risk $ 1 $ 6 $ 4 $ 3 $ 1 $ — $ 15

Average Credit Risk — 1 — 1 — — 2

High Credit Risk — — — — — — —

Total $ 1 $ 7 $ 4 $ 4 $ 1 $ — $ 17

33 unchanged sentences

Charge-offs $ 5 $ 3 $ 7 $ 4 $ 1 $ — $ 20

Low Credit Risk $ 7 $ 4 $ 3 $ 1 $ — $ — $ 15

Average Credit Risk — 1 1 — — — 2

High Credit Risk — — — — — — —

Total $ 7 $ 5 $ 4 $ 1 $ — $ — $ 17

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

Total Finance Receivables

4 unchanged sentences

Total Charge-offs $ 5 $ 5 $ 15 $ 11 $ 4 $ 3 $ 43

_____________

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

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

2 unchanged sentences

Subsequent recoveries, if any, are credited to the allowance.

Xerox 2026 Form 10-Q 23

We generally continue to maintain equipment on lease and provide services to customers that have invoices for finance receivables that are 90 days or more past due and, as a result of the bundled nature of billings, we also continue to accrue interest on those receivables.

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

Xerox 2025 Form 10-Q 28

The aging of our billed finance receivables is as follows:

September 30, 2025

March 31, 2026

Current 31-90

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EMEA 8 1 1 10 653 663 17

— — — — 17 17 —

Total $ 33 $ 9 $ 7 $ 49 $ 1,398 $ 1,447 $ 56

2 unchanged sentences

Sales of Finance Receivables

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

PEAC Solutions (PEAC)

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

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

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

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

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

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

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

De Lage Landen Financial Services Canada and France

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

(DLL Canada), pursuant to which the Company can offer for sale, and DLL Canada may purchase on a non-recourse basis, certain eligible pools of finance receivables structured as “true sales at law” and bankruptcy remote transfers and we have received an opinion to that effect from outside counsel.

During the first quarter 2025, the Company entered into a finance receivables funding agreement with De Lage Landen Financial Services France Inc.

(DLL France), pursuant to which the Company can offer for sale, and DLL France may purchase on a non-recourse basis, certain eligible pools of finance receivables structured as “true sales at law” and bankruptcy remote transfers and we have received an opinion to that effect from outside counsel.

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

The Company will be paid a commission on lease receivables sold and will continue to service the lease receivables under the finance receivables funding agreement.

Xerox 2025 Form 10-Q 29

LCM Capital LLP

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

10) Limited (as the purchaser and affiliate of LCM Capital LLP (LCM)), pursuant to which the Company can offer for sale, and LCM may purchase, certain eligible pools of finance receivables structured as “true sales at law” and bankruptcy remote transfers and we have received an opinion to that effect from outside counsel.

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

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

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

The Company has finance receivables funding arrangements with third-party funding partners in the U.S., Canada, and in EMEA.

Under these arrangements, the Company sells certain eligible pools of finance receivables.

The transfers are structured to qualify for sale accounting treatment and the related receivables are derecognized from the Company's consolidated financial statements.

The Company's funding partners generally do not have recourse to the Company for credit losses on the transferred receivables.

In addition, under certain arrangements, the Company may transfer servicing responsibilities for funded receivables to a funding partner.

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:

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Finance receivable sales - net proceeds (1)

$ 103 $ 134 $ 214 $ 511

Gain on sale/Commissions (2)

1 unchanged sentence

_____________

(1) Cash proceeds are reported in Net cash provided by operating activities.

1 unchanged sentence

Amounts include revenues associated with the sale of the underlying leased equipment.

Xerox 2026 Form 10-Q 24

Note 9 – Inventories and Equipment on Operating Leases, Net

The following is a summary of Inventories by major category:

September 30,

2026 December 31,

6 unchanged sentences

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

September 30,

2026 December 31,

2 unchanged sentences

Equipment on operating leases, net $ 292 $ 299

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

Xerox 2025 Form 10-Q 30

Note 10 – Lessee

Operating Leases

We have operating leases for real estate and vehicles in our domestic and international operations, and for certain equipment in our domestic operations.

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

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

The components of lease expense are as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Operating lease expense $ 37 $ 18 $ 80 $ 53

Short-term lease expense 4 3 9 11

Variable lease expense (1)

Sublease income ( 1 ) ( 1 ) ( 1 ) ( 1 )

Total Lease expense $ 56 $ 35 $ 135 $ 105

_____________

(1) Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs, as well as taxes and insurance.

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

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

September 30,

2025 December 31,

Other long-term assets (1)

Accrued expenses and other current liabilities $ 74 $ 45

Other long-term liabilities 265 143

Total Operating lease liabilities $ 339 $ 188

_____________

(1) During the first quarter 2025 , the Company modified a lease agreement for electric vehicles, which resulted in a change in the lease classification from financing to operating.

Accordingly, we remeasured the right of use asset and the corresponding lease liability.

Finance Leases

Xerox has finance leases for equipment in the U.S.

and Europe, as well as for vehicles and related infrastructure, within outsourced warehouse supply arrangements, in the U.S.

These leases have remaining maturities up to six years .

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

September 30,

2025 December 31,

Land, buildings and equipment, net (1)

Accrued expenses and other current liabilities $ 5 $ 15

Other long-term liabilities 4 38

Total Finance lease liabilities $ 9 $ 53

_____________

(1) During the first quarter 2025 , the Company modified a lease agreement for electric vehicles, which resulted in a change in the lease classification from financing to operating.

Accordingly, we remeasured the right of use asset and the corresponding lease liability.

Xerox 2025 Form 10-Q 31

Total contingent rentals on operating leases, consisting principally of usage charges in excess of minimum contracted amounts, were $ 8 and $ 9 for the three months ended March 31, 2026 and 2025, respectively.

Note 10 – Restructuring Programs

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

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

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

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

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

Our restructuring actions are currently related to our efforts to integrate and consolidate certain operations of the legacy Xerox and Lexmark businesses following the Lexmark Acquisition in 2025, as well as our prior restructuring programs, including Reinvention.

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.

Restructuring and related costs, net reflect the following components:

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Restructuring charges, net $ 45 $ 5

Asset impairment charges, net (1)

( 6 ) — ( 10 ) 24

Related costs, net 1 —

1 unchanged sentence

_____________ _

(1) Impairments are net of cash receipts.

(1) Impairments for the three months ended March 31, 2026 and 2025, respectively are net of cash receipts.

Xerox 2026 Form 10-Q 25

Restructuring Charges, Net

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

Restructuring charges, net primarily relate to the Print and Other segment for all restructuring programs, as amounts related to the IT Solutions segment were immaterial for the three months ended March 31, 2026.

A summary of our restructuring program activity is as follows:

Severance and

Related Costs

Other Contractual Termination Costs (2)

Severance Costs Prior Actions Severance Costs Reinvention Severance Costs Integration Other Contractual Termination Costs (2)

Balance at December 31, 2025 $ 1 $ 43 $ 77 $ 5 $ 126

2 unchanged sentences

Net current period charges (1)

— ( 2 ) 47 — 45

Charges against reserve and currency — ( 1 ) ( 26 ) — ( 27 )

Balance at March 31, 2026 $ 1 $ 40 $ 98 $ 5 $ 144

Restructuring provision 11 — 11

Reversals of prior charges ( 2 ) — ( 2 )

Net current period charges (1)

Charges against reserve and currency ( 11 ) — ( 11 )

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

Restructuring provision (3)

Reversals of prior charges ( 18 ) — ( 18 )

Net current period charges (1)

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

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

_____________ _

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

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

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

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.

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

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

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

At March 31, 2026, we expect to pay $ 77 of the restructuring reserve over the next twelve months.

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

Nine Months Ended

September 30,

Three Months Ended

Restructuring cash payments $ ( 21 ) $ ( 18 )

1 unchanged sentence

Charges against reserve and currency $ ( 27 ) $ ( 16 )

Xerox 2025 Form 10-Q 32

Asset Impairment Charges, Net

2 unchanged sentences

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

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Lease right of use assets (1)

$ — $ — $ 4 $ —

Owned assets (2)

Asset impairments — 13

Adjustments/Reversals 10 ( 1 ) 10 ( 3 )

Proceeds from the sales of owned assets (3)

( 16 ) — ( 35 ) —

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

Net asset impairment credit $ ( 1 ) $ ( 6 )

____________ _

(1) Primarily related to the exit and abandonment of leased and owned facilities, net of any potential sublease income and recoveries.

(2) Reflects net proceeds on the sale of exited surplus facilities and land.

(1) Primarily related to the exit and abandonment of leased facilities, net of recoveries and any potential sublease income.

(2) Primarily related to the exit and abandonment of owned facilities.

(3) Reflects proceeds on the sales of exited surplus facilities and land.

Related Costs, Net

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Retention related severance/bonuses (1)

$ ( 1 ) $ — $ ( 1 ) $ ( 2 )

Contractual severance costs 1 —

Consulting and other costs (2)

Total $ 1 $ —

1 unchanged sentence

(1) Includes retention-related severance and bonuses for employees expected to continue working beyond their minimum retention period before termination.

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

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

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

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

Xerox 2026 Form 10-Q 26

For the three months ended March 31, 2026 and 2025 no cash was paid for restructuring related costs, respectively, and the restructuring related costs reserve was $ 4 and $ 4 at March 31, 2026 and December 31, 2025, respectively.

The balance at March 31, 2026 is expected to be paid over the next twelve months.

Note 11 – Supplementary Financial Information

1 unchanged sentence

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

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

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

Restricted cash amounts are classified in our Condensed Consolidated Balance Sheets based on when the cash will be contractually or judicially released.

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

September 30,

2026 December 31,

2 unchanged sentences

Litigation deposits in Brazil 22 21

Escrow and cash collections related to secured borrowing arrangements and receivable sales 1 13

Other restricted cash 30 32

2 unchanged sentences

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

September 30,

2026 December 31,

4 unchanged sentences

Summarized cash flow information is as follows:

Location in Statement of Cash Flows Nine Months Ended

September 30,

Location in Statement of Cash Flows Three Months Ended

Source/(Use) 2026 2025

5 unchanged sentences

Amortization of acquired intangible assets Operating 30 10

Amortization of patents (1)

Operating 5 7

Amortization of customer contract costs (1)

5 unchanged sentences

Preferred stock dividends - Xerox Holdings Financing ( 4 ) ( 4 )

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

Proceeds from issuance of warrants Financing 11 —

Commitment fees Financing ( 22 ) —

Finance lease obligations Financing ( 9 ) ( 6 )

_____________

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

(2) Amortization of customer contract costs is reported in Decrease in other current and long-term assets in the Condensed Consolidated Statements of Cash Flows.

(1) Amortization of customer contract costs is reported in Increase in other current and long-term assets in the Condensed Consolidated Statements of Cash Flows.

Refer to Note 3 - Revenue - Contract Costs for additional information.

4 unchanged sentences

The program operates in a similar manner to a purchasing card program, however with this program we directly receive invoices associated with those vendors and suppliers participating in the program and confirm and validate those invoices and the amounts due before submitting the invoices to the financial institution for early payment at a discounted amount.

The financial institution subsequently invoices the Company for the stated or full amount of the invoices paid early and we are required to make payment within 45 days of the statement date.

The financial institution subsequently invoices us for the stated or full amount of the invoices paid early and we are required to make payment within 45 days of the statement date.

The overall impact of the program generally results in paying our supplier and vendor invoices consistent with their original terms.

This program is generally available to all non-inventory vendors and suppliers.

The Company's supplier finance program is as follows:

Activity related to the Company's supplier finance program is as follows:

Balance at January 1st $ 18 $ 30

2 unchanged sentences

Balance at March 31st $ 18 $ 19

Amounts invoiced 22 30

Invoices paid ( 21 ) ( 35 )

Balance at June 30th $ 20 $ 25

Amounts invoiced $ 21 $ 25

Invoices paid $ ( 22 ) $ ( 30 )

Balance at September 30th $ 19 $ 20

Note 12 – Debt

On April 11, 2025, Xerox Corporation and Xerox Issuer Corporation, a wholly-owned subsidiary of Xerox Corporation (Escrow Issuer), completed their previously announced private offering of (i) $ 400 aggregate principal amount of 10.250 % Senior Secured First Lien Notes due 2030 (the First Lien Notes) issued by Xerox Corporation at 99 % of par, 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.

We received net proceeds (after discount, fees and expenses) on the issuance of the First Lien Notes of $ 366 .

Additionally, $ 392 of net proceeds (after discount) was deposited into an escrow account upon the issuance of the Second Lien Notes.

On May 9, 2025, the Escrow Issuer issued an additional $ 100 of the 13.500 % Second Lien Notes at 95 % of par.

Net proceeds (after discounts, fees and expenses) were approximately $ 93 .

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

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

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

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

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

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

Xerox 2025 Form 10-Q 35

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

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

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

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

The First Lien Notes bear interest at a rate of 10.250 % per annum, payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2025.

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 and, subject to certain exceptions and permitted liens, secured by security interests in substantially all of the assets of Xerox Corporation and such subsidiaries (the Xerox Collateral) on a first-priority basis by the Xerox Collateral that is Fixed Asset Collateral (as defined in the First Lien Indenture) and on a second-priority basis by the Xerox Collateral that is Current Asset Collateral (as defined in the First Lien Indenture).

The Second Lien Notes bear interest at a rate of 13.500 % per annum, payable semi-annually in arrears on April 15 and October 15, beginning on October 15, 2025.

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

Proceeds from the Second Lien Notes were held in escrow.

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

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

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

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

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

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

Beginning on October 15, 2027, some or all of the First Lien Notes are redeemable at any time and from time to time at the applicable redemption prices listed in the First Lien Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

In addition, at any time and from time to time prior to October 15, 2027, up to 40 % of the aggregate principal amount of the First Lien Notes are redeemable with funds from one or more equity offerings at a redemption price equal to 110.250 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

In addition, prior to October 15, 2027, during each 12-month period commencing with the issue date of the First Lien Notes, up to 10 % of the aggregate principal amount of the First Lien Notes outstanding are redeemable at a redemption price equal to 103 % of the principal amount of the First Lien Notes redeemed plus accrued and unpaid interest.

At any time and from time to time prior to April 15, 2028, some or all of the Second Lien Notes are redeemable for cash at a redemption price equal to 100 % of their principal amount, plus the applicable “make-whole” premium described in the Second Lien Indenture and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

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

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

In addition, prior

Xerox 2025 Form 10-Q 36

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

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

The Indentures contain covenants that, following the issue date for the First Lien Notes and the Escrow Release for the Second Lien Notes, among other things, limit the ability of Xerox Holdings Corporation, Xerox Corporation and Xerox Corporation’s 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.

In addition, the notes include restrictions which limit the use of proceeds under certain sales of finance receivables.

The restrictions would require proceeds from certain sales to be used to repay existing first lien debt.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Bank Trust Company, National Association, as trustee.

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

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

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

Joint Venture Financing

As discussed in Note 1 - Basis of Presentation, on February 17, 2026, Xerox and certain investors entered a joint venture arrangement pursuant to which the investors funded $ 405 aggregate principal amount of senior secured five-year Term Loans to, and purchased $ 45 of Class A Units from, XRX Brandco Holdings LLC (IPCo Holdings) which is a consolidated VIE.

The Class A Units have a mandatory cumulative redemption expected in five years and as a result we have classified these instruments, as well as the Term Loans, as indebtedness totaling $ 450 in the Condensed Consolidated Balance Sheet as of March 31, 2026.

Total transaction costs of $ 46 were paid at closing resulting in net proceeds of $ 404 .

These costs have been accounted for as Debt issuance cost and discounts and will be amortized to interest expense over the five-year term.

The costs include amounts paid to lenders at closing representing transaction fees associated with underwriting, structuring, and committing capital, legal fees in connection with the debt financing, and advisory fees, as well as debt discounts.

Amounts paid for the formation of the Joint Venture and for other general activities were not significant.

The Term Loans are guaranteed by a wholly owned subsidiary of IPCo Holdings, XRX Brandco LLC (IPCo) whose assets include royalty fees collected on the Contributed IP.

The Term Loans bear interest at a per annum rate equal to the term SOFR rate, with a floor of 3.000 % plus a margin of 8.125 %.

The Class A Units carry a per annum rate equal to the term SOFR rate, with a floor of 3.000 % plus a margin of 11.875 %.

Both the Term Loans and the Class A Units amortize at a quarterly rate of 4.50 % of the aggregate amount outstanding as of the Closing Date, with such amounts payable in equal installments, commencing following the fiscal quarter ending September 30, 2026.

The remaining outstanding balance is due in full at maturity.

This new indebtedness is subject to customary voluntary and mandatory prepayment provisions, including requirements to prepay with the proceeds of certain indebtedness and excess cash flow.

The Credit Agreement 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.

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.

Early Redemptions of Debt

During the first quarter 2026, the Company repurchased approximately $ 101 of its 5.50 % Senior Unsecured Notes due August 2028 for an aggregate purchase price of approximately $ 45 .

In connection with these transactions, the Company recognized a gain of approximately $ 56 on the early extinguishment of the debt, which was recorded to Other (income) expenses, net in the Condensed Consolidated Statement of Loss.

Xerox 2026 Form 10-Q 28

Step-Up Date Interest Rate Step-Up

July 1, 2026 13.500 %

July 1, 2027 14.000 %

October 1, 2027 14.125 %

January 1, 2028 14.250 %

April 1, 2028 14.500 %

July 1, 2028 14.750 %

October 1, 2028 15.000 %

January 1, 2029 15.250 %

April 1, 2029 15.500 %

July 1, 2029 15.750 %

October 1, 2029 16.000 %

January 1, 2030 16.250 %

April 1, 2030 16.500 %

July 1, 2030 16.750 %

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

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

Bank Trust Company, National Association, as trustee.

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

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

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

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

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Xerox Corporation, as borrower, and its parent company, Xerox Holdings Corporation, have a revolving credit facility (the ABL Facility), with Citibank, N.A., as administrative agent and collateral agent (the ABL Agent) and several lenders including Citibank N.A.

The aggregate outstanding principal amount of the ABL Facility is payable in full at maturity on May 22, 2028, and there are no scheduled principal payments prior to maturity.

The aggregate outstanding principal amount of the ABL Facility is payable in full at maturity on the earlier of May 22, 2028, and a date that is 91 days prior to the final scheduled maturity date of any Material Springer Debt (as defined in the ABL Facility credit agreement), and there are no scheduled principal payments prior to maturity.

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

Xerox 2025 Form 10-Q 38

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

As of May 7, 2026, and based on our March availability calculation, we have availability of $ 387 before letters of credit issued under the ABL Facility of approximately $ 98 .

There are no current borrowings outstanding.

Accordingly, our net availability is approximately $ 289 .

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Xerox Holdings Corporation/Xerox Corporation Intercompany Loan

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

Secured Borrowings and Collateral

At December 31, 2024, we had borrowings of $ 70 , which were secured by finance receivables of $ 58 .

These borrowings had an interest rate of 4.62 %, and were expected to mature in 2026.

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

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

At March 31, 2026 and December 31, 2025, the balance of the Xerox Holdings Corporation Intercompany Loan reported in Xerox Corporation’s Condensed Consolidated Balance Sheet was $ 1,896 and $ 1,993 , respectively, which is net of related debt issuance costs, and the intercompany interest payable was $ 32 and $ 36 , respectively.

Xerox 2026 Form 10-Q 29

Interest Expense and Income

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Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Equipment financing interest (1)

$ 21 $ 26 $ 66 $ 82

Non-financing interest expense (2)

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Financing income (3)

$ 32 $ 38 $ 97 $ 118

Other interest income (3)

Interest income $ 30 $ 35

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

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

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

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

(2) Interest expense of Xerox Corporation included intercompany interest expense associated with the Xerox Holdings Corporation / Xerox Corporation Intercompany Loan of $ 37 and $ 30 for the three months ended March 31, 2026 and 2025, respectively

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

Note 13 – Financial Instruments

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

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

Cash Flow Hedges

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

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

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

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

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

Xerox 2025 Form 10-Q 39

We had no fair value hedges for the three months ended March 31, 2026 and 2025, respectively.

Foreign Exchange Risk Management

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• Forecasted purchases and sales in foreign currency

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

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

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

At March 31, 2026 and December 31, 2025, we had outstanding forward exchange and purchased option contracts with gross notional values of $ 2,409 and $ 2,656 respectively, with terms of less than 12 months.

At March 31, 2026, approximately 96 % of the contracts mature within three months, 2 % mature in three to six months and 2 % in six to twelve months.

Foreign Currency Cash Flow Hedges

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

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

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

The amount of ineffectiveness recorded in the Condensed Consolidated Statements of (Loss) for these designated cash flow hedges was not material for the three months ended March 31, 2026 and 2025, respectively.

The net liability fair value of these contracts was $ 1 and $ 4 as of March 31, 2026 and December 31, 2025, respectively.

The related cash flow impacts of all of our derivative activities are reflected as cash flows from operating activities.

Summary of Derivative Instruments Gains (Losses)

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The following is a summary of derivative gains (losses).

Xerox 2026 Form 10-Q 30

Designated Derivative Instruments Gains (Losses)

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Derivative Loss Recognized in OCI (Effective Portion)

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Total $ ( 3 ) $ —

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

At March 31, 2026, no loss net of tax was recorded in Accumulated other comprehensive loss associated with our cash flow hedging activity.

Refer to Note 14 - Fair Value of Financial Assets and Liabilities for additional information related to the fair value of our derivative instruments.

Credit Support Annex

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

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

At March 31, 2026, the Company had no collateral posted due to this provision.

Non-Designated Derivative Instruments Gains (Losses)

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

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

Xerox 2025 Form 10-Q 40

The net (liability)/asset fair value of these contracts was $( 7 ) and $ 2 as of March 31, 2026 and December 31, 2025, respectively.

The following table provides a summary of gains and (losses) on non-designated derivative instruments:

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

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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

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

Foreign exchange contracts – forwards Other expenses, net – Currency (losses) gains, net $ ( 15 ) $ 6

Currency losses, net were $ 5 and $ 0 for three months ended March 31, 2026 and 2025, respectively.

Net currency gains and losses include the mark-to-market adjustments of the derivatives not designated as hedging instruments and the related cost of those derivatives as well as the remeasurement of foreign currency-denominated assets and liabilities and are included in Other expenses, net.

Xerox 2026 Form 10-Q 31

Note 14 – Fair Value of Financial Assets and Liabilities

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

September 30,

2026 December 31,

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Cash and cash equivalents $ 585 $ 585 $ 512 $ 512

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Long-term debt $ 4,281 $ 2,459 $ 4,016 $ 2,478

(1) Includes $ 118 of Xerox Corporation related party debt.

(1) Includes $ 128 and $ 121 of Xerox Corporation related party debt for the period ended March 31, 2026 and December 31, 2025 respectively.

(2) Represents subsidiaries of Xerox Corporation

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Note 15 – Employee Benefit Plans

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

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

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

Three Months Ended September 30,

Pension Benefits

Plans Non-U.S.

Plans Retiree Health

Components of Net Periodic Benefit Costs:

2025 2024 2025 2024 2025 2024

Service cost $ — $ — $ 3 $ 2 $ — $ —

Interest cost (1)

33 27 51 46 2 2

Expected return on plan assets (1)

( 26 ) ( 23 ) ( 54 ) ( 49 ) — —

Recognized net actuarial loss (gain) (1)

6 4 13 16 ( 3 ) ( 3 )

Amortization of prior service cost (credit) (1)

— — 2 2 ( 4 ) ( 4 )

Recognized settlement loss (1)

Defined benefit plans 13 15 15 17 ( 5 ) ( 5 )

Defined contribution plans 2 4 6 6 n/a n/a

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

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

Net actuarial (loss) (2)

— ( 15 ) — — — —

Amortization of net actuarial (loss) gain ( 6 ) ( 11 ) ( 13 ) ( 15 ) 3 3

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

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

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

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

Nine Months Ended September 30,

Three Months Ended March 31,

Pension Benefits

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— — 2 2 ( 3 ) ( 3 )

Recognized settlement loss (1)

Defined benefit plans 35 44 41 48 ( 13 ) ( 14 )

Net Periodic Defined Benefit Cost (Credit) 10 11 16 12 ( 3 ) ( 4 )

Defined contribution plans 5 3 6 6 n/a n/a

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

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

Net actuarial (loss) (2)

( 1 ) ( 9 ) — — — ( 1 )

Amortization of net actuarial (loss) gain ( 15 ) ( 31 ) ( 40 ) ( 46 ) 9 9

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

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

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

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

Total Employee Benefit Plans Cost (Credit) $ 15 $ 14 $ 22 $ 18 $ ( 3 ) $ ( 4 )

_____________

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

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

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

pension plans as a result of the payment of periodic settlements and (ii) adjustments for the actuarial valuation results based on the January 1st plan census data.

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

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

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

Xerox 2025 Form 10-Q 42

Contributions

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

Nine Months Ended

September 30, Year Ended

Three Months Ended

March 31, Year Ended

2025 Estimated 2026 (1)

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_____________

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

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

(1) Contributions amounts for the three months ended March 31, 2026, as well as full year estimated contributions for 2026, include legacy Lexmark for the entire period.

Contributions for 2025 reflect those contributions made for legacy Lexmark beginning July 1, 2025 , the date of the Lexmark Acquisition.

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

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plans are for our tax-qualified defined benefit plans.

Xerox 2026 Form 10-Q 33

Note 16 – Shareholders’ Equity of Xerox Holdings

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Non-controlling

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

Balance at December 31, 2025 $ 128 $ 1,183 $ 2,444 $ ( 3,311 ) $ 444 $ 5 $ 449

Comprehensive (loss), net — — ( 105 ) ( 33 ) ( 138 ) — ( 138 )

3 unchanged sentences

— — ( 4 ) — ( 4 ) — ( 4 )

Proceeds from issuance of warrants (5)

Distribution of stock warrants (5)

— — ( 12 ) — ( 12 ) — ( 12 )

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Transactions with noncontrolling interests — — — — — 1 1

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

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

Balance at March 31, 2026 $ 131 $ 1,192 $ 2,320 $ ( 3,344 ) $ 299 $ 6 $ 305

Xerox Holdings

Shareholders’

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

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

Cash dividends declared - common (3)

— — ( 31 ) — ( 31 ) — ( 31 )

Cash dividends declared - preferred (4)

— — ( 4 ) — ( 4 ) — ( 4 )

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

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

Xerox 2025 Form 10-Q 43

Additional Paid-in Capital Retained Earnings AOCL (2)

Xerox Holdings Shareholders’ Equity Non-controlling Interests Total

Balance at December 31, 2024 $ 124 $ 1,137 $ 3,514 $ ( 3,699 ) $ 1,076 $ 4 $ 1,080

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— — ( 4 ) — ( 4 ) — ( 4 )

Proceeds from issuance of warrants (5)

2 9 — — 11 — 11

Stock option and incentive plans, net 2 4 — — 6 — 6

1 unchanged sentence

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

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

Additional Paid-in Capital Retained Earnings AOCL (2)

Xerox Holdings Shareholders’ Equity Non- controlling Interests Total

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

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

Cash dividends declared - common (3)

— — ( 96 ) — ( 96 ) — ( 96 )

Cash dividends declared - preferred (4)

— — ( 11 ) — ( 11 ) — ( 11 )

Purchases of capped calls — ( 17 ) — — ( 17 ) — ( 17 )

Stock option and incentive plans, net 1 26 — — 27 — 27

Transactions with noncontrolling interests — — — — — ( 5 ) ( 5 )

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

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

_____________

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

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

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

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

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

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

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

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

(3) Cash dividends declared on common stock for the three months ended March 31, 2026 and 2025 were $ 0.025 per share and $ 0.125 per share, respectively.

(4) Cash dividends declared on preferred stock for the three months ended March 31, 2026 and 2025 were $ 20.00 per share, respectively.

(5) Refer to the Warrant Dividend section below for additional information.

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

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Balance at March 31, 2026 130,776

Stock based compensation plans, net 26

Balance at June 30, 2025 125,806

Stock based compensation plans, net 56

Exercise of Warrants 2,156

Balance at September 30, 2025 128,018

Unregistered Sales of Equity Securities

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

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

The Warrant was exercised during the third quarter 2025.

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

Warrant Dividend

In January 2026 the Board of Directors of Xerox Holdings Corporation (Xerox Holdings) 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).

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.

Each holder of record of the Common Stock as of the Record Date received one warrant for every two shares of Xerox Holdings common stock held, rounded down to the nearest whole warrant.

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.

Xerox 2026 Form 10-Q 34

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.

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.

Such redesignation shall only be effective 20 consecutive Business Days from (and including) the date of publication of notice.

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.

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.

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.

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).

If this condition is met, the warrants will expire at 5:00 p.m.

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 .

Note 17 – Shareholder's Equity of Xerox

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Xerox Shareholder's Equity Non- controlling Interests Total

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

Balance at December 31, 2025 $ 3,492 $ 448 $ ( 3,311 ) $ 629 $ 5 $ 634

Comprehensive (loss), net — ( 105 ) ( 33 ) ( 138 ) — ( 138 )

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

Transfers from parent 16 — — 16 1 17

Transfers to parent ( 1 ) — — ( 1 ) — ( 1 )

Transactions with noncontrolling interests — — — — 1 1

Balance at September 30, 2025

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

Additional Paid-in Capital Retained Earnings AOCL (1)

Xerox Shareholder's Equity Non- controlling Interests Total

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

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

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

Transfers from parent 4 — — 4 — 4

Balance at September 30, 2024

Balance at March 31, 2026

$ 3,491 $ 336 $ ( 3,344 ) $ 483 $ 6 $ 489

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

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

Additional Paid-in Capital Retained Earnings AOCL (1)

Xerox Shareholder's Equity Non-

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

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

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

Transfers to parent ( 8 ) — — ( 8 ) — ( 8 )

Transactions with noncontrolling interests — — — — ( 5 ) ( 5 )

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

Balance at September 30, 2024

Balance at March 31, 2025

$ 3,474 $ 1,397 $ ( 3,617 ) $ 1,254 $ 4 $ 1,258

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Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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

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

Translation Adjustments (Losses) Gains $ ( 77 ) $ ( 77 ) $ 105 $ 105

Unrealized (Losses) Gains

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

Unrealized Gains (Losses)

Changes in fair value of cash flow hedges gains (losses) 1 1 ( 3 ) ( 2 )

Changes in cash flow hedges reclassed to earnings (1)

— — 1 2 1 1 8 7

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

Net Unrealized Gains (Losses) 4 4 ( 3 ) ( 2 )

Defined Benefit Plans Gains (Losses)

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

Net actuarial/prior service gains (losses) 1 1 — ( 1 )

Prior service amortization (2)

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Actuarial loss amortization/settlement (2)

16 14 23 26 46 41 68 60

Other gains (losses) (3)

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AOCL is comprised of the following:

September 30,

2026 December 31,

Cumulative translation adjustments $ ( 1,938 ) $ ( 1,861 )

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

Other unrealized losses, net — ( 4 )

Benefit plans net actuarial losses and prior service credits ( 1,406 ) ( 1,446 )

Total Accumulated Other Comprehensive Loss $ ( 3,344 ) $ ( 3,311 )

Note 19 – Income Taxes

First quarter 2026 effective tax rate was ( 43.8 )% and resulted in tax expense of $ 32 .

This rate was higher than the U.S.

federal statutory tax rate of 21.0% primarily due to the inability to benefit from certain current year losses and expenses, as well as the geographical mix of earnings.

First quarter 2025 effective tax rate was ( 34.3 )%.

This rate was higher than the U.S.

federal statutory tax rate of 21.0% and resulted in tax expense of $ 23 , primarily due to the establishment of a valuation allowance against certain deferred tax assets and lower tax benefits of some losses and expenses in 2025, partially offset by the geographical mix of earnings.

The effective tax rate is based on nonrecurring events as well as recurring factors, including the taxation of foreign income.

In addition, the effective tax rate will change based on discrete or other nonrecurring events that may not be predictable.

Xerox 2026 Form 10-Q 36

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Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

(Loss) per Share

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Convertible notes 19,196 19,196

Warrants 82,464 —

Total Anti-Dilutive Securities 117,961 42,500

Dividends per Common Share $ 0.025 $ 0.125

$ 0.025 $ 0.25 $ 0.175 $ 0.75

_____________

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

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

Xerox 2026 Form 10-Q 37

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Below is a summary of our Brazilian tax contingencies:

September 30,

2026 December 31,

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Liens on Brazilian assets — —

The increase in the unreserved portion of the tax contingency, inclusive of any related interest, was primarily due to currency, as well as interest, partially offset by the closed cases.

The increase in the unreserved portion of the tax contingency, inclusive of any related interest, was primarily due to currency and adjustments to ongoing cases, as well as interest, all of which was partially offset by the 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.

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We routinely assess all these matters as to the probability of ultimately incurring a liability against our Brazilian operations and record our best estimate of the ultimate loss in situations where we assess the likelihood of an ultimate loss as probable.

Miami Firefighters’ Relief & Pension Fund v.

Icahn, et al.:

On December 13, 2019, alleged shareholder Miami Firefighters’ Relief & Pension Fund (Miami Firefighters) filed a derivative complaint in New York State Supreme Court, New York County on behalf of Xerox Holdings Corporation (Xerox Holdings) against Carl Icahn and his affiliated entities High River Limited Partnership and Icahn Capital LP (the Icahn defendants), Xerox Holdings, and all then-current Xerox Holdings directors (the Directors).

Xerox Holdings was named as a nominal defendant in the case but no monetary damages are sought against it.

Miami Firefighters alleges:

breach of fiduciary duty of loyalty against the Icahn defendants;

breach of contract against the Icahn defendants (for purchasing HP stock in violation of Icahn’s confidentiality agreement with Xerox Holdings);

unjust enrichment against the Icahn defendants;

and breach of fiduciary duty of loyalty against the Directors (for any consent to the Icahn defendants’ purchases of HP common stock while Xerox Holdings was considering acquiring HP).

Miami Firefighters seeks a judgment of breach of fiduciary duties against the Icahn defendants and the Directors, and disgorgement to Xerox Holdings of profits Icahn Capital and High River earned from trading in HP

Xerox 2025 Form 10-Q 48

This action was consolidated with a similar action brought by Steven J.

Reynolds against the same parties in the same court.

Miami Firefighters’ counsel has been designated as lead counsel in the consolidated action.

Claims asserted against the Directors were later dismissed.

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

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

We are engaged in numerous legal actions arising in the ordinary course of our business.

While there can be no assurance, as of March 31, 2026, 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.

We have issued or provided approximately $ 259 of guarantees as of March 31, 2026 in the form of letters of credit or surety bonds issued to i) support certain insurance programs;

ii) support our obligations related to the Brazil contingencies;

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

What changed 10-Q

Item 1. Financial Statements