What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-07 · 455 added, 213 removed, 1064 unchanged (39% of the section changed)

1 unchanged sentence

XEROX HOLDINGS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

Three Months Ended

June 30, Six Months Ended

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

11 unchanged sentences

Non-financing interest expense (1)

Other (income) expenses, net ( 31 ) 35

100 55 184 88

Other expenses (income), net (1)

5 25 ( 26 ) 60

Total Costs and Expenses 1,891 1,636 3,810 3,160

(Loss) before Income Taxes ( 73 ) ( 67 )

Income (Loss) before Income Taxes 31 ( 60 ) ( 42 ) ( 127 )

Income tax expense 18 46 50 69

Net (Loss) ( 105 ) ( 90 )

Net Income (Loss) 13 ( 106 ) ( 92 ) ( 196 )

Preferred stock dividends, net ( 3 ) ( 3 ) ( 7 ) ( 7 )

Net (Loss) attributable to Common Shareholders $ ( 109 ) $ ( 94 )

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

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

Net Income (Loss) attributable to Common Shareholders $ 10 $ ( 109 ) $ ( 99 ) $ ( 203 )

Basic Income (Loss) per Share $ 0.07 $ ( 0.87 ) $ ( 0.77 ) $ ( 1.62 )

Diluted Income (Loss) per Share $ 0.07 $ ( 0.87 ) $ ( 0.77 ) $ ( 1.62 )

_____________

(1) Prior year amounts have been reclassified to conform to the current year's presentation.

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

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

1 unchanged sentence

XEROX HOLDINGS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) (UNAUDITED)

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

Three Months Ended

June 30, Six Months Ended

(in millions) 2026 2025 2026 2025

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

Other Comprehensive (Loss) Income, Net (1)

Net Income (Loss) $ 13 $ ( 106 ) $ ( 92 ) $ ( 196 )

Other Comprehensive Income (Loss), Net (1)

Translation adjustments, net 1 229 ( 76 ) 334

1 unchanged sentence

Changes in defined benefit plans, net 5 ( 56 ) 45 ( 77 )

Other Comprehensive (Loss) Income, Net ( 33 ) 82

Comprehensive (Loss), Net $ ( 138 ) $ ( 8 )

Other Comprehensive Income (Loss), Net (1)

10 169 ( 23 ) 251

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

Comprehensive Income (Loss) , Net $ 23 $ 63 $ ( 115 ) $ 55

_____________

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

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

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

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

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

2026 December 31,

Cash and cash equivalents $ 495 $ 512

Accounts receivable (net of allowance of $ 73 and $ 73 , respectively)

Billed portion of finance receivables (net of allowance of $ 3 and $ 3 , respectively)

Accounts receivable, net (1)

Billed portion of finance receivables, net (1)

Finance receivables, net (1)

2 unchanged sentences

Total current assets 3,697 3,568

Finance receivables due after one year (net of allowance of $ 42 and $ 42 , respectively)

Finance receivables due after one year, net (1)

Equipment on operating leases, net 283 299

7 unchanged sentences

Short-term debt and current portion of long-term debt $ 70 $ 231

Financing liability – tariff receivables monetization 90 —

Accounts payable 1,456 1,498

19 unchanged sentences

Shares of Common Stock Issued and Outstanding 131,243 128,044

_____________

(1) For additional information regarding the allowance for doubtful accounts refer to Note 7 - Accounts Receivable, Net and for additional information regarding the allowance for doubtful credit losses refer to Note 8 - Finance Receivables, Net.

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

Six Months Ended

(in millions) 2026 2025

4 unchanged sentences

Provisions 36 48

Gain on early extinguishment of debt ( 56 ) —

Net (gain) loss on early extinguishment of debt ( 95 ) 4

Net loss (gain) on sales of businesses and assets 2 ( 5 )

9 unchanged sentences

Decrease in finance receivables 157 212

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

Increase in accounts payable 58 89

Decrease in accrued compensation ( 8 ) ( 30 )

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

(Increase) decrease in other current and long-term assets ( 120 ) 16

(Decrease) increase in accounts payable ( 30 ) 25

Increase (decrease) in accrued compensation 18 ( 51 )

Increase (decrease) in other current and long-term liabilities 6 ( 40 )

Net change in income tax assets and liabilities 6 35

6 unchanged sentences

Other investing, net ( 13 ) ( 4 )

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

Net cash used in investing activities ( 33 ) ( 12 )

Cash Flows from Financing Activities

Net payments on short term debt ( 125 ) —

Proceeds from issuance of long-term debt 446 889

Payments on long-term debt ( 251 ) ( 343 )

Tariff receivables monetization 80 —

Dividends ( 16 ) ( 58 )

Other financing, net ( 6 ) ( 29 )

Net cash provided by (used in) financing activities 242 ( 159 )

Net cash provided by financing activities 128 459

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 1 ) 7

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

(Decrease) increase in cash, cash equivalents and restricted cash ( 13 ) 354

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

3 unchanged sentences

XEROX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

Three Months Ended

June 30, Six Months Ended

(in millions) 2026 2025 2026 2025

11 unchanged sentences

Non-financing interest expense (1)

Other (income) expenses, net ( 31 ) 33

100 55 184 88

Other expenses (income), net (1)

4 23 ( 27 ) 56

Total Costs and Expenses 1,888 1,634 3,807 3,155

(Loss) before Income Taxes ( 73 ) ( 64 )

Income (Loss) before Income Taxes 34 ( 58 ) ( 39 ) ( 122 )

Income tax expense 18 46 50 69

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

Net Income (Loss) $ 16 $ ( 104 ) $ ( 89 ) $ ( 191 )

_____________

(1) Prior year amounts have been reclassified to conform to the current year's presentation.

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

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

1 unchanged sentence

XEROX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) (UNAUDITED)

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

Three Months Ended

June 30, Six Months Ended

(in millions) 2026 2025 2026 2025

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

Other Comprehensive (Loss) Income, Net (1)

Net Income (Loss) $ 16 $ ( 104 ) $ ( 89 ) $ ( 191 )

Other Comprehensive Income (Loss), Net (1)

Translation adjustments, net 1 229 ( 76 ) 334

1 unchanged sentence

Changes in defined benefit plans, net 5 ( 56 ) 45 ( 77 )

Other Comprehensive (Loss) Income, Net ( 33 ) 82

Comprehensive (Loss), Net $ ( 138 ) $ ( 5 )

Other Comprehensive Income (Loss), Net (1)

10 169 ( 23 ) 251

Comprehensive Income (Loss), Net $ 26 $ 65 $ ( 112 ) $ 60

_____________

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

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions) March 31,

(in millions) June 30,

2026 December 31,

Cash and cash equivalents $ 493 $ 511

Accounts receivable (net of allowance of $ 73 and $ 73 , respectively)

Billed portion of finance receivables (net of allowance of $ 3 and $ 3 , respectively)

Accounts receivable, net (1)

Billed portion of finance receivables, net (1)

Finance receivables, net (1)

2 unchanged sentences

Total current assets 3,695 3,567

Finance receivables due after one year (net of allowance of $ 42 and $ 42 , respectively)

Finance receivables due after one year, net (1)

Equipment on operating leases, net 283 299

8 unchanged sentences

Short-term related party debt 12 121

Financing liability – tariff receivables monetization 90 —

Accounts payable 1,456 1,498

17 unchanged sentences

Total Liabilities and Equity $ 9,672 $ 9,781

_____________

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

Six Months Ended

(in millions) 2026 2025

4 unchanged sentences

Provisions 36 48

Gain on early extinguishment of debt ( 56 ) —

Net (gain) loss on early extinguishment of debt ( 95 ) 4

Net loss (gain) on sales of businesses and assets 2 ( 5 )

9 unchanged sentences

Decrease in finance receivables 157 212

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

Increase in accounts payable 58 89

Decrease in accrued compensation ( 8 ) ( 30 )

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

(Increase) decrease in other current and long-term assets ( 123 ) 11

(Decrease) increase in accounts payable ( 30 ) 25

Increase (decrease) in accrued compensation 18 ( 51 )

Increase (decrease) in other current and long-term liabilities 6 ( 40 )

Net change in income tax assets and liabilities 6 35

5 unchanged sentences

Acquisitions, net of cash acquired 19 1

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

Net cash used in investing activities ( 20 ) ( 8 )

Cash Flows from Financing Activities

Net payments on short term debt ( 125 ) —

Proceeds from issuance of long-term debt 446 889

Payments on long-term debt ( 251 ) ( 343 )

Tariff receivables monetization 80 —

Distributions to parent ( 33 ) ( 71 )

Other financing, net ( 3 ) ( 23 )

Net cash provided by (used in) financing activities 236 ( 160 )

Net cash provided by financing activities 114 452

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 1 ) 7

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

(Decrease) increase in cash, cash equivalents and restricted cash ( 14 ) 351

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

20 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.

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

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

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

11 unchanged sentences

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.

At June 30, 2026, total assets and liabilities of IPCo Holdings were $ 908 and $ 458 , 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.

1 unchanged sentence

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.

Cash and cash equivalents received by IPCo Holdings and XRX Brandco LLC (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 transactions 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.

5 unchanged sentences

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).

On the Closing Date, in connection with the formation of the Joint Venture, Xerox Holdings, Xerox Corporation, IPCo Holdings and IPCo entered into a Shared Services and License Agreement (the SSLA), pursuant to which (i) Xerox Holdings agreed to provide certain services to IPCo Holdings and IPCo and (ii) IPCo granted 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 is payable quarterly based on the specified consolidated revenue and is 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.

4 unchanged sentences

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

In addition, the SSLA may be terminated by IPCo upon certain events

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.

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.

4 unchanged sentences

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 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.

As of June 30, 2026, 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.

1 unchanged sentence

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.

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

Management believes that separate presentation of these captions provides more meaningful information to investors regarding the Company’s 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

The reclassification for Non-financing interest expense impacted the Condensed Consolidated Statements of Income (Loss) of both Xerox Holdings Corporation and Xerox Corporation, however, the reclassification had no impact on previously reported Total Costs and expenses, or Net Income (Loss), and is as follows:

Three months ended June 30, 2025 Six months ended June 30, 2025

Previously Reported Reclassification As Reported Previously Reported Reclassification As Reported

Non-financing interest expense $ — $ 55 $ 55 $ — $ 88 $ 88

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

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

Other expense (income), net - Xerox Holdings Corporation 80 ( 55 ) 25 148 ( 88 ) 60

Other expense (income) , net - Xerox Corporation 78 ( 55 ) 23 144 ( 88 ) 56

Xerox 2026 Form 10-Q 12

4 unchanged sentences

Accounting Standard Updates to be Adopted:

Environmental Credits and Environmental Credit Obligations

In May 2026, the FASB issued ASU 2026-02 , Environmental Credits and Environmental Credit Obligations (Topic 818) , which establishes guidance on the recognition, measurement, presentation, and disclosure of environmental credits and related environmental credit obligations.

Under the new guidance, qualifying environmental credits are generally recognized at cost and subsequently measured based on their intended use, while environmental credit obligations are recognized as incurred.

The ASU also expands annual disclosure requirements for environmental credit assets, obligations, and related activities.

The standard is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual reporting periods.

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

Retrospective adoption through a cumulative-effect adjustment to the opening balance of Retained earnings is required.

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

Interim Reporting - Narrow-Scope Improvements

27 unchanged sentences

Disaggregation of Income Statement Expenses , which is intended to improve disclosures related to certain income statement expenses of the Company.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted, and should be applied either prospectively or retrospectively.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with

Xerox 2026 Form 10-Q 13

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.

4 unchanged sentences

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.

2 unchanged sentences

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.

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

Note 3 – Revenue

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Primary geographical markets (1) :

4 unchanged sentences

Asia Pacific 58 10 106 23

Other 53 44 106 92

Total Revenues $ 1,922 $ 1,576 $ 3,768 $ 3,033

3 unchanged sentences

Maintenance agreements (2)

425 379 842 747

IT products (3)

140 153 245 258

Service arrangements (4)

421 439 843 868

Rental and other 55 61 115 131

3 unchanged sentences

Direct equipment lease (5)

$ 90 $ 108 $ 181 $ 220

Distributors & resellers (6)

523 238 1,048 447

Customer direct 383 319 687 555

7 unchanged sentences

(6) Primarily reflects sales through our two-tier distribution channels.

Contract Assets and Liabilities:

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

Contract Assets and Liabilities:

Our contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time were $ 39 and $ 34 at June 30, 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, were approximately $ 270 and $ 279 at June 30, 2026 and December 31, 2025, respectively.

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

The following table summarizes our contract liabilities activity:

6 unchanged sentences

Balance at March 31 st

Revenue recognized (1)

( 79 ) ( 76 )

Billings and customer advances (2)

Foreign currency and other 1 —

Acquisition (3)

Balance at June 30 th

_____________

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

(2) Excludes revenue recognized during the period.

(3) Includes ITSavvy acquisition-related activity.

(3) 2026 relates to Lexmark Acquisition-related activity and 2025 relates to 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 aggregate amount of the transaction price allocated to unsatisfied performance obligations including the amounts included in contract liabilities for committed customers was $ 596 at June 30, 2026.

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

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Balance at March 31st, $ 160 $ 140

Customer contract costs deferred 12 18

Amortization of customer contract costs ( 18 ) ( 17 )

Balance at June 30th, $ 155 $ 143

_____________

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Selected financial information for our reportable segments was as follows:

Three months ended March 31, 2026

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

Three months ended June 30, 2026

Print and Other IT Solutions Total Reportable Segments (10)

Corporate (1)

External revenue $ 1,733 $ 189 $ 1,922 $ — $ 1,922

16 unchanged sentences

Xerox 2026 Form 10-Q 16

Three months ended March 31, 2025

Three months ended June 30, 2025

Print and Other IT Solutions Total Reportable Segments (10)

5 unchanged sentences

Cost of sales $ 347 $ 127 $ 474 $ — $ 474

Cost of services, maintenance, rentals and other (4)(5)

593 48 641 — 641

Research, development and engineering expenses 43 — 43 — 43

Selling, administrative and general expenses (6)(7)

318 25 343 16 359

Intersegment expense (8)

Segment profit $ 65 $ 10 $ 75 $ ( 16 ) $ 59

Depreciation $ 47 $ — $ 47 $ — $ 47

Interest income (9)

Interest expense (5)

23 — 23 55 78

Six months ended June 30, 2026

Print and Other IT Solutions Total Reportable Segments (10)

Corporate (1)

External revenue $ 3,425 $ 343 $ 3,768 $ — $ 3,768

Intersegment revenue (2)

Total $ 3,425 $ 350 $ 3,775 $ — $ 3,775

Reconciliation to Segment Profit

Cost of sales (3)

$ 971 $ 198 $ 1,169 $ — $ 1,169

Cost of services, maintenance, rentals and other (3)(4)(5)

1 unchanged sentence

Research, development and engineering expenses (3)

130 — 130 — 130

Selling, administrative and general expenses (3)(6)(7)

6 unchanged sentences

37 — 37 184 221

Xerox 2026 Form 10-Q 17

Six months ended June 30, 2025

Print and Other IT Solutions Total Reportable Segments (10)

Corporate (1)

External revenue $ 2,660 $ 373 $ 3,033 $ — $ 3,033

Intersegment revenue (2)

Total $ 2,660 $ 377 $ 3,037 $ — $ 3,037

Reconciliation to Segment Profit

Cost of sales $ 639 $ 212 $ 851 $ — $ 851

Cost of services, maintenance, rentals and other (4)(5)

1,190 98 1,288 — 1,288

Research, development and engineering expenses 85 — 85 — 85

Selling, administrative and general expenses (6)(7)

640 48 688 40 728

Intersegment expense (8)

Segment profit $ 106 $ 15 $ 121 $ ( 40 ) $ 81

Depreciation $ 97 $ — $ 97 $ — $ 97

Interest income (9)

Interest expense (5)

45 — 45 88 133

_____________

(1) Certain administrative and general expenses, which primarily relate to Corporate functions, are not allocated to either of our operating/reportable segments.

(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) 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.

(3) The Print and Other segment excludes the impact of a fixed asset purchase accounting adjustment related to the Lexmark Acquisition of $ 5 and $ 10 to Cost of sales, $ 5 and $ 11 to Cost of services, maintenance, rentals and other, $ 1 and $ 1 to Research, development, and engineering expenses, and $ 1 and $ 1 to Selling, administrative and general expenses for the three and six months ended June 30, 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 $ 6 and $ 11 within Cost of sales, and $ 4 and $ 6 within Cost of services, maintenance, rentals and other for the three and six months ended June 30, 2025, respectively.

(5) The Print and Other segment 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.

1 unchanged sentence

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:

(6) Selling, administrative and general expenses include bad debt expense related to the Print and Other segment of $ 11 and $ 15 for the three months ended June 30, 2026 and 2025, respectively and $ 17 and $ 24 for the six months ended June 30, 2026 and 2025, respectively.

(7) For the three months ended June 30, 2026 and 2025, the Print and Other segment excludes the following costs:

Transformation costs of $ 2 and $ 3 , respectively and Transaction and related costs, net of $ 0 and $ 6 , respectively.

For the six months ended June 30, 2026 and 2025, the Print and Other segment excludes the following costs:

Transformation costs of $ 4 and $ 9 , respectively and Transaction and related costs, net of $ 4 and $ 9 , 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.

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

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

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

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Pre-tax Income (Loss)

4 unchanged sentences

Transformation-related costs (1)

( 2 ) ( 3 ) ( 4 ) ( 9 )

Purchase Accounting Adjustment - Fixed Assets ( 12 ) — ( 23 ) —

3 unchanged sentences

Non-financing interest expense ( 100 ) ( 55 ) ( 184 ) ( 88 )

Other (income) expenses, net 31 ( 35 )

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

Other expenses (income), net ( 5 ) ( 25 ) 26 ( 60 )

Total Pre-tax Income (loss) $ 31 $ ( 60 ) $ ( 42 ) $ ( 127 )

Depreciation and Amortization

3 unchanged sentences

(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

3 unchanged sentences

Three Months Ended

Location in Statements of (Loss) 2026 2025

June 30, Six Months Ended

Location in Statements of Income (Loss) 2026 2025 2026 2025

Revenue from sales type leases Sales $ 90 $ 108 $ 181 $ 220

5 unchanged sentences

(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.

Profit at lease commencement on sales-type leases was estimated to be $ 11 and $ 26 for the three months ended June 30, 2026 and 2025, respectively, and $ 28 and $ 57 for the six months ended June 30, 2026 and 2025,

respectively.

Xerox 2026 Form 10-Q 19

2 unchanged sentences

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.

During fourth quarter 2025 and second quarter 2026, adjustments were recorded to correct certain errors in the Lexmark Acquisition preliminary purchase price allocation that existed as of the acquisition date.

The errors resulted from misstated balances of accounts receivable, contract assets, and contract liabilities in Lexmark's opening balance sheet as of July 1, 2025.

Accordingly, Accounts receivable, net decreased by $ 81 , Other current assets increased by $ 15 , Deferred tax assets increased by $ 7 , Accrued expenses and other liabilities decreased by $ 11 and Other long-term liabilities decreased by $ 7 .

The identified errors had an immaterial impact on the Lexmark preliminary purchase accounting.

As a result of the correction of errors, we recorded a total increase of $ 41 to Goodwill associated with the Lexmark Acquisition, of which $ 13 was recorded during second quarter 2026, and $ 28 was recorded during fourth quarter 2025.

In addition, during 2026 and 2025, the Company recorded immaterial measurement period adjustments to the opening balance sheet which resulted in further increases to Goodwill of $ 28 and $ 11 , respectively.

The allocation of the purchase price for this acquisition was finalized during the second quarter 2026.

Transaction expense for the Lexmark Acquisition was approximately $ 0 and $ 5 for the three months ended June 30, 2026 and 2025, respectively, and $ 4 and $ 7 for the six months ended June 30, 2026 and 2025, respectively, and was recorded in the Condensed Consolidated Statements of Income (Loss) in Selling, administrative and general expenses.

Note 7 – Accounts Receivable, Net

12 unchanged sentences

Balance at March 31 st

Provision 8 8

Charge-offs ( 5 ) ( 7 )

Recoveries and other (1)

Balance at June 30 th

_____________

1 unchanged sentence

We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness.

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.

The allowance for doubtful accounts receivable is determined based on an

Xerox 2026 Form 10-Q 20

assessment of past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends.

Accounts Receivable Sales Arrangements

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Accounts receivable sales (1)

$ 121 $ 111 $ 212 $ 196

(1) Losses on sales were not material.

8 unchanged sentences

Residual values — —

Allowance for doubtful accounts ( 45 ) ( 45 )

Allowance for doubtful credit losses (1)

( 44 ) ( 45 )

Finance receivables, net 1,214 1,402

2 unchanged sentences

Finance receivables due after one year, net $ 732 $ 846

(1) Reflects the allowance for doubtful credit losses related to (i) Billed portion of finance receivables of $ 3 and $ 3 , and (ii) the current and non-current portions of finance receivables of $ 41 and $ 42 as of June 30, 2026 and December 31, 2025, respectively.

Finance Receivables – Allowance for Credit Losses and Credit Quality

3 unchanged sentences

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

Our allowance for doubtful credit losses is effectively determined by geography.

Our allowance for doubtful credit losses is determined by geography.

The risk characteristics in our finance receivable portfolio segments are generally consistent with the risk factors associated with the economies of the countries/regions included in those geographies.

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 March 31, 2026 and 3.1 % at December 31, 2025.

Based on that assessment, the allowance for doubtful credit losses as a percentage of gross finance receivables (net of unearned income) was 3.5 % at June 30, 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.

Our assessment also included a review of current portfolio credit metrics and the level of write-offs incurred over the past year.

We believe our current reserve position remains sufficient to cover expected future losses that may result from current and future macro-economic conditions including higher inflation, interest rates, and the potential for recessions in the geographic areas of our customers.

We continue to monitor developments in future economic conditions and trends, and as a result, our reserves may need to be updated in future periods.

Xerox 2026 Form 10-Q 21

recessions in the geographic areas of our customers.

We continue to monitor developments in future economic conditions and trends, and as a result, our reserves may need to be updated in future periods.

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

United States Canada EMEA Other Total

United States Canada EMEA Other (2)

Balance at December 31, 2025

3 unchanged sentences

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

Provision 2 1 1 — 4

Charge-offs, net ( 2 ) ( 1 ) ( 2 ) — ( 5 )

Balance at June 30, 2026 $ 23 $ 5 $ 16 $ — $ 44

Balance at December 31, 2024

2 unchanged sentences

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

Other — — 1 — 1

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

Provision 5 — 3 — 8

Charge-offs, net ( 3 ) — ( 4 ) — ( 7 )

( 1 ) 1 1 — 1

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

_____________

(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 finance receivables of Latin America, Asia Pacific and South Africa.

However, the related allowance for doubtful credit losses of the Other geography for the three and six months ended June 30, 2026 was nil.

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

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

19 unchanged sentences

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

March 31, 2026

June 30, 2026

2026 2025 2024 2023 2022 Prior Total

32 unchanged sentences

Total Charge-offs $ — $ 1 $ 1 $ 5 $ 3 $ 2 $ 12

_____________

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

Xerox 2026 Form 10-Q 23

34 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 2026 Form 10-Q 24

The aging of our billed finance receivables is as follows:

March 31, 2026

June 30, 2026

Current 31-90

5 unchanged sentences

EMEA 6 3 1 10 583 593 19

1 — — 1 16 17 —

Other — — — — 16 16 —

Total $ 27 $ 10 $ 6 $ 43 $ 1,215 $ 1,258 $ 53

7 unchanged sentences

EMEA 8 1 1 10 653 663 17

— — — — 17 17 —

Other — — — — 17 17 —

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

_____________

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

Sales of Finance Receivables

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Finance receivable sales - net proceeds (1)

$ 80 $ 36 $ 122 $ 111

Gain on sale/Commissions (2)

1 unchanged sentence

$ 2 $ 1 $ 4 $ 3

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

(2) Recorded in Services, maintenance and rentals as Other Revenue.

_____________

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

(2) Recorded as Other revenue within Services, maintenance, rentals and other.

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

14 unchanged sentences

Equipment on operating leases, net $ 283 $ 299

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.

Total contingent rentals on operating leases, consisting principally of usage charges in excess of minimum contracted amounts, were $ 9 and $ 10 for the three months ended June 30, 2026 and 2025, respectively, and $ 17 and $ 19 for the six months ended June 30, 2026 and 2025, respectively.

Note 10 – Restructuring Programs

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.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Restructuring charges, net $ 26 $ 9 $ 71 $ 14

Asset impairment charges, net (1)

( 5 ) 2 ( 6 ) ( 4 )

Related costs, net 2 ( 1 ) 3 ( 1 )

1 unchanged sentence

_____________ _

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

(1) Impairments for the three and six months ended June 30, 2026 and 2025, respectively, are net of cash receipts.

Xerox 2026 Form 10-Q 26

Restructuring Charges, Net

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:

7 unchanged sentences

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

Restructuring provision — — 31 — 31

Reversals of prior charges — — ( 5 ) — ( 5 )

Net current period charges (1)

Charges against reserve and currency — ( 3 ) ( 17 ) — ( 20 )

Balance at June 30, 2026 $ 1 $ 37 $ 107 $ 5 $ 150

_____________ _

(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

(1) Represents net amount recognized within the Condensed Consolidated Statements of Income (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 (now referred to as Transformation) 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 .

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

At June 30, 2026, we expect to pay $ 78 of the restructuring reserve over the next twelve months.

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

Three Months Ended

Six Months Ended

Restructuring cash payments $ ( 40 ) $ ( 33 )

4 unchanged sentences

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

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 Reinvention.

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

Both the impairment and sale are associated with strategic actions associated with Reinvention.

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Lease right of use assets (1)

$ — $ — $ — $ 4

Owned assets (2)

1 unchanged sentence

Proceeds from the sales of owned assets (3)

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

( 5 ) — ( 6 ) ( 19 )

Net asset impairment (credit) charge $ ( 5 ) $ 2 $ ( 6 ) $ ( 4 )

____________ _

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

1 unchanged sentence

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

Xerox 2026 Form 10-Q 27

Related Costs, Net

1 unchanged sentence

Three Months Ended

Retention related severance/bonuses (1)

June 30, Six Months Ended

2026 2025 2026 2025

Contractual severance costs $ 2 $ ( 1 ) $ 3 $ ( 1 )

Total $ 2 $ ( 1 ) $ 3 $ ( 1 )

____________ _

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

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.

For the six months ended June 30, 2026 and 2025 cash paid for restructuring related costs was $ 3 and $ 0 , respectively, and the restructuring related costs reserve was $ 4 and $ 4 at June 30, 2026 and December 31, 2025, respectively.

The balance at June 30, 2026 is expected to be paid over the next twelve months.

Note 11 – Supplementary Financial Information

18 unchanged sentences

Summarized cash flow information is as follows:

Location in Statement of Cash Flows Three Months Ended

Source/(Use) 2026 2025

Source/(Use) Location in Statement of Cash Flows Six Months Ended

Provision for receivables Operating $ 17 $ 27

11 unchanged sentences

Preferred stock dividends - Xerox Holdings Financing ( 7 ) ( 7 )

Commitment fees Financing — ( 15 )

_____________

(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.

(1) Amortization of customer contract costs is reported in (Increase) decrease 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.

12 unchanged sentences

Balance at March 31st $ 18 $ 19

Amounts invoiced 21 22

Invoices paid ( 26 ) ( 21 )

Balance at June 30th $ 13 $ 20

Note 12 – Debt

1 unchanged sentence

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 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 approximately $ 450 in the Condensed Consolidated Balance Sheet.

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

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.

During the second quarter 2026, additional transaction costs of $ 8 for legal fees and expenses related to the joint venture arrangement were incurred.

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

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

4 unchanged sentences

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.

This 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 29

Early Redemptions of Debt

During 2026, the Company repurchased approximately $ 194 of its 5.50 % Senior Unsecured Notes due August 2028 and $ 6 of its 13.50 % Senior Secured Notes due 2031 for an aggregate purchase price of approximately $ 101 .

In connection with these transactions, a net gain was recognized on the early extinguishment of the debt of approximately $ 39 and $ 95 for the three and six months ended June 30, 2026, respectively, which was recorded to Other expenses (income), net in the Condensed Consolidated Statement of Income (Loss).

Financing Liability – Tariff Receivables Monetization

On February 20, 2026, the U.S.

Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA).

In addition, on March 4, 2026, the U.S.

Court of International Trade (CIT) ruled that U.S.

Customs and Border Protection (CBP) must return the IEEPA tariffs that were collected from February 4, 2025 through February 24, 2026.

On April 20, 2026, the CBP launched the Consolidated Administration and Processing of Entries (CAPE) system to facilitate returns of previously paid tariffs, and at that time the Company determined that the return of the IEEPA tariffs was estimable and probable, and tariff receivables were recorded within the Condensed Consolidated Balance Sheet in Other current assets.

A corresponding reduction to Cost of Sales of $ 105 was recorded in the Condensed Consolidated Statement of Income (Loss) for the three and six months ended June 30, 2026, respectively.

The accounting for the return of the IEEPA tariff applies the loss recovery model, and the receivables represents recovery of tariff costs that were previously paid.

During the second quarter of 2026, the Company entered into a sale agreement to sell its rights to certain tariff receivables with a carrying amount of $ 105 , for cash consideration of approximately $ 80 .

The cash consideration received is reported as a financing transaction in the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2026.

Imputed interest expense of approximately $ 25 will be recorded to Other expenses (income), net through December 31, 2026, our current estimate of when we will receive all of the refunds and subsequently transfer those refunds to the purchaser.

Any cash received associated with the tariff receivable will be deposited and held in a restricted cash account until repayment is made to the purchaser.

At June 30, 2026, a liability of $ 90 was recorded on the Condensed Consolidated Balance Sheet in Financing liability – tariff receivables monetization, reflecting the cash consideration received and the accrual of imputed interest.

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 .

6 unchanged sentences

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

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

The current Capped Call cap price in 2025 was reduced to $ 20.84 per share, which is the same as the conversion price of the 2030 Convertible Notes.

Revolving Credit Facility

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 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.

Xerox 2026 Form 10-Q 30

payments prior to maturity.

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

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 .

In May 2026, the Company entered into Amendment No.

3 to the Credit Agreement which, among other things, increased the letter of credit sublimit from $ 100 to $ 125 .

As of August 6, 2026, and based on our June availability calculation, we have availability of $ 388 before letters of credit issued under the ABL Facility of approximately $ 112 .

There are no current borrowings outstanding.

4 unchanged sentences

Xerox Holdings Corporation/Xerox Corporation Intercompany Loan

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

At June 30, 2026 and December 31, 2025, the balance of the Xerox Holdings Corporation Intercompany Loan reported in Xerox Corporation’s Condensed Consolidated Balance Sheet was $ 1,682 and $ 1,993 , respectively, which is net of related debt issuance costs, and the intercompany interest payable was $ 28 and $ 36 , respectively.

Interest Expense and Income

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Equipment financing interest (1)

$ 18 $ 23 $ 37 $ 45

Non-financing interest expense (2)

100 55 184 88

Interest expense $ 118 $ 78 $ 221 $ 133

Financing income (3)

$ 25 $ 32 $ 52 $ 65

Other interest income (3)

Interest income $ 28 $ 38 $ 58 $ 73

(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).

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

(2) Interest expense of Xerox Corporation included intercompany interest expense associated with the Xerox Holdings Corporation / Xerox Corporation Intercompany Loan of $ 35 and $ 29 for the three months ended June 30, 2026 and 2025, respectively and $ 72 and $ 59 for the six months ended June 30, 2026 and 2025.

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

Note 13 – Financial Instruments

2 unchanged sentences

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

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

We had no fair value hedges for the three and six months ended June 30, 2026 and 2025, respectively.

Foreign Exchange Risk Management

3 unchanged sentences

• Forecasted purchases and sales in foreign currency

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.

At June 30, 2026 and December 31, 2025, we had outstanding forward exchange and purchased option contracts with gross notional values of $ 2,509 and $ 2,656 respectively, with terms of less than 12 months.

At June 30, 2026, approximately 93 % of the contracts mature within three months, 3 % mature in three to six months and 4 % in six to twelve months.

Xerox 2026 Form 10-Q 31

Foreign Currency Cash Flow Hedges

We designate a portion of our foreign currency derivative contracts as cash flow hedges of our foreign currency-denominated inventory purchases.

We designate a portion of our foreign currency derivative contracts as cash flow hedges of our foreign currency-denominated inventory purchases and certain revenue transactions that have a high probability of occurring.

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 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 amount of ineffectiveness recorded in the Condensed Consolidated Statements of Income (Loss) for these designated cash flow hedges was not material for the three and six months ended June 30, 2026 and 2025, respectively.

The net asset (liability) fair value of these contracts was $ 3 and $( 4 ) as of June 30, 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.

2 unchanged sentences

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

June 30, Six Months Ended

2026 2025 2026 2025

Derivative Loss Recognized in OCI (Effective Portion)

4 unchanged sentences

Cost of sales $ ( 2 ) $ ( 1 ) $ ( 5 ) $ ( 1 )

Interest expense — —

Total $ ( 2 ) $ ( 1 ) $ ( 5 ) $ ( 1 )

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

At June 30, 2026, net after-tax gain of $ 4 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.

1 unchanged sentence

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

At June 30, 2026, the Company had collateral of $ 1 posted due to this provision.

Non-Designated Derivative Instruments Gains (Losses)

1 unchanged sentence

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

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

The net (liability) asset fair value of these contracts was $( 14 ) and $ 2 as of June 30, 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

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.

June 30, Six Months Ended

2026 2025 2026 2025

Foreign exchange contracts – forwards Other expenses (income), net – Currency (losses) gains, net $ ( 18 ) $ 3 $ ( 33 ) $ 9

Currency losses, net were $ 8 and $ 1 for the three months ended June 30, 2026 and 2025, respectively and $ 13 and $ 1 for the six months ended June 30, 2026 and 2025, respectively.

Xerox 2026 Form 10-Q 32

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The following table represents assets and liabilities measured at fair value on a recurring basis.

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

With the exception of the warrants, whose basis for the measurement of fair value is Level 1 - Quoted Prices, the basis for measurement at fair value for all other assets and liabilities is Level 2 – Significant Other Observable Inputs.

2026 December 31,

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Total $ 55 $ 21

(1) Includes foreign currency derivative contracts.

Refer to Note 13 - Financial Instruments for additional information regarding these derivatives.

(2) Refer to Note 16 - Shareholders' Equity of Xerox Holdings for additional information regarding the Warrant Dividend.

We utilize the income approach to measure the fair value for our derivative assets and liabilities.

The income approach uses pricing models that rely on market observable inputs such as yield curves, currency exchange rates and forward prices, and therefore are classified as Level 2.

The income approach uses pricing models that rely on market observable inputs such as yield curves, currency exchange rates and forward prices.

The fair value of the warrant liability is determined using the market approach in accordance with ASC 820, and is based on quoted market prices for the identical warrants in an active market at the measurement date, which are derived from observable market prices rather than a valuation model.

Accordingly, no unobservable inputs or management assumptions are used in determining the fair value.

Fair value for our deferred compensation plan investments in mutual funds is based on quoted market prices for those funds.

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

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Cash and cash equivalents $ 495 $ 495 $ 512 $ 512

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Long-term debt $ 4,153 $ 2,849 $ 4,016 $ 2,478

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

(1) Includes $ 12 and $ 121 of Xerox Corporation related party debt for the period ended June 30, 2026 and December 31, 2025 respectively.

(2) Represents subsidiaries of Xerox Corporation

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

Three Months Ended March 31,

Three months ended June 30,

Pension Benefits

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— — 3 2 ( 3 ) ( 3 )

— — ( 1 ) — — —

Defined benefit plans 11 11 16 14 ( 3 ) ( 4 )

Defined contribution plans 5 ( 3 ) 6 4 n/a n/a

Net Periodic Benefit Cost (Credit) $ 16 $ 8 $ 22 $ 18 $ ( 3 ) $ ( 4 )

Six Months Ended June 30,

Pension Benefits

Plans Non-U.S.

Plans Retiree Health

Components of Net Periodic Benefit Costs:

2026 2025 2026 2025 2026 2025

Service cost $ — $ — $ 4 $ 2 $ 1 $ —

Interest cost (1)

64 57 101 95 4 4

Expected return on plan assets (1)

( 54 ) ( 44 ) ( 107 ) ( 102 ) — —

Recognized net actuarial loss (gain) (1)

11 9 30 27 ( 5 ) ( 6 )

Amortization of prior service cost (credit) (1)

— — 5 4 ( 6 ) ( 6 )

— — ( 1 ) — — —

Net Periodic Defined Benefit Cost (Credit) 21 22 32 26 ( 6 ) ( 8 )

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_____________

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

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

Contributions

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

Three Months Ended

March 31, Year Ended

Six Months Ended

June 30, Year Ended

2025 Estimated 2026 (1)

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_____________

(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.

(1) Contributions amounts for the six months ended June 30, 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.

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Non-controlling

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

Comprehensive income, net — — 13 10 23 — 23

Cash dividends declared - common (3)

— — ( 4 ) — ( 4 ) — ( 4 )

Cash dividends declared - preferred (4)

— — ( 3 ) — ( 3 ) — ( 3 )

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

Transactions with noncontrolling interests — — — — — 1 1

Balance at June 30, 2026 $ 131 $ 1,200 $ 2,326 $ ( 3,334 ) $ 323 $ 7 $ 330

Xerox Holdings

Shareholders’

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

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

Cash dividends declared - common (3)

— — ( 4 ) — ( 4 ) — ( 4 )

Cash dividends declared - preferred (4)

— — ( 3 ) — ( 3 ) — ( 3 )

Stock option and incentive plans, net — 13 — — 13 — 13

Transactions with noncontrolling interests — — — — — 1 1

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

Additional Paid-in Capital Retained Earnings AOCL (2)

Xerox Holdings Shareholders’ Equity Non-controlling Interests Total

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

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Transactions with noncontrolling interests — — — — — 2 2

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

Xerox Holdings

Shareholders’

Balance at June 30, 2026 $ 131 $ 1,200 $ 2,326 $ ( 3,334 ) $ 323 $ 7 $ 330

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

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

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

(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) 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.

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

(3) Cash dividends declared on common stock for the three months ended June 30, 2026 and 2025 were $ 0.025 per share and $ 0.025 per share, respectively and $ 0.05 per share and $ 0.15 per share for the six months ended June 30, 2026 and 2025, respectively.

(4) Cash dividends declared on preferred stock for the three and six months ended June 30, 2026 and 2025 were $ 20.00 and $ 40.00 per share, respectively.

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

Xerox 2026 Form 10-Q 35

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 465

Exercise of warrants 2

Balance at June 30, 2026 131,243

Warrant Dividend

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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.

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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.

The warrants are classified as derivative liabilities and are remeasured at fair value at each reporting date.

Changes in the fair value of the warrant liability are recognized in Other expenses (income), net in the Condensed Consolidated Statements of Income (Loss).

On the date of issuance, a warrant liability of $ 12 was recognized in Other long-term liabilities in the Condensed Consolidated Balance Sheet.

For the three and six months ended June 30, 2026, the Company recorded expense of $ 14 and $ 9 , respectively.

At June 30, 2026, the liability included in Other long-term liabilities was $ 21 .

Xerox 2026 Form 10-Q 36

Note 17 – Shareholder's Equity of Xerox

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Xerox Shareholder's Equity Non- controlling Interests Total

Balance at March 31, 2026 $ 3,491 $ 336 $ ( 3,344 ) $ 483 $ 6 $ 489

Comprehensive income, net — 16 10 26 — 26

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

Transfers from parent 14 — — 14 — 14

Investment from noncontrolling interests — — — — 1 1

Balance at June 30, 2026 $ 3,505 $ 345 $ ( 3,334 ) $ 516 $ 7 $ 523

Additional Paid-in Capital Retained Earnings AOCL (1)

Xerox Shareholder's Equity Non-

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

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

Dividends declared to parent — ( 6 ) — ( 6 ) — ( 6 )

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

Transactions with noncontrolling interests — — — — 1 1

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

Additional Paid-in Capital Retained Earnings AOCL (1)

Xerox Shareholder's Equity Non- controlling Interests Total

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

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Dividends declared to parent — ( 14 ) — ( 14 ) — ( 14 )

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

Transfers from parent 13 — — 13 — 13

Transactions with noncontrolling interests — — — — 2 2

Balance at March 31, 2026

Balance at June 30, 2026

$ 3,505 $ 345 $ ( 3,334 ) $ 516 $ 7 $ 523

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

Balance at March 31, 2025

Balance at June 30, 2025

$ 3,468 $ 1,287 $ ( 3,448 ) $ 1,307 $ 5 $ 1,312

_____________

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

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

Xerox 2026 Form 10-Q 37

Note 18 – Other Comprehensive (Loss) Income

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

Note 18 – Other Comprehensive Income (Loss)

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

Three Months Ended

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

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

June 30, Six Months Ended

2026 2025 2026 2025

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

Translation Adjustments Gains (Losses) $ 1 $ 1 $ 229 $ 229 $ ( 76 ) $ ( 76 ) $ 334 $ 334

Unrealized Gains (Losses)

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Changes in cash flow hedges reclassed to earnings (1)

2 2 1 1 5 5 1 1

Net Unrealized Gains (Losses) 4 4 ( 5 ) ( 4 ) 8 8 ( 8 ) ( 6 )

Defined Benefit Plans Gains (Losses)

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

Defined Benefit Plans (Losses) Gains

Net actuarial/prior service (losses) gains ( 8 ) ( 8 ) 1 1 ( 7 ) ( 7 ) 1 —

Prior service amortization (2)

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Actuarial loss amortization/settlement (2)

Other gains (losses) (3)

18 17 15 13 36 34 30 27

Other (losses) gains (3)

( 5 ) ( 4 ) ( 70 ) ( 70 ) 18 19 ( 104 ) ( 104 )

Changes in Defined Benefit Plans Gains (Losses) 5 5 ( 55 ) ( 56 ) 46 45 ( 75 ) ( 77 )

Other Comprehensive (Loss) Income $ ( 32 ) $ ( 33 ) $ 82 $ 82

Other Comprehensive Income (Loss) $ 10 $ 10 $ 169 $ 169 $ ( 22 ) $ ( 23 ) $ 251 $ 251

(1) Reclassified to Cost of sales and interest expense - refer to Note 13 - Financial Instruments for additional information regarding our cash flow hedges.

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Cumulative translation adjustments $ ( 1,937 ) $ ( 1,861 )

Other unrealized losses, net — ( 4 )

Other unrealized gains (losses), net 4 ( 4 )

Benefit plans net actuarial losses and prior service credits ( 1,401 ) ( 1,446 )

Total Accumulated Other Comprehensive Loss $ ( 3,334 ) $ ( 3,311 )

Xerox 2026 Form 10-Q 38

Note 19 – Income Taxes

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

Second quarter 2026 effective tax rate was 58.1 % and resulted in tax expense of $ 18 .

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 )%.

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

Second quarter 2025 effective tax rate was ( 76.7 )% and resulted in tax expense of $ 46 on a pre-tax (loss).

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.

federal statutory tax rate of 21.0%, primarily due to not benefitting from certain current year losses and expenses, as well as the geographical mix of earnings.

The effective tax rate for the six months ended June 30, 2026 was ( 119.0 )% and resulted in tax expense of $ 50 on a pre-tax (loss).

This rate was higher than the U.S.

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

The effective tax rate for the six months ended June 30, 2025 was ( 54.3 )% and resulted in tax expense of $ 69 on a pre-tax (loss).

This rate was higher than the U.S.

federal statutory tax rate of 21.0% primarily due to the establishment of a valuation allowance in the first quarter 2025 against certain deferred tax assets as well as not benefiting from certain current year losses and expenses and 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.

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Xerox 2026 Form 10-Q 39

Note 20 – ( Loss) per Share

Note 20 – Income (Loss) per Share

(shares in thousands)

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

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

Three Months Ended

(Loss) per Share

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

June 30, Six Months Ended

2026 2025 2026 2025

Income (Loss) per Share

Net Income (Loss) $ 13 $ ( 106 ) $ ( 92 ) $ ( 196 )

Accrued dividends on preferred stock ( 3 ) ( 3 ) ( 7 ) ( 7 )

Adjusted Net loss available to common shareholders $ ( 109 ) $ ( 94 )

Adjusted Net income (loss) available to common shareholders $ 10 $ ( 109 ) $ ( 99 ) $ ( 203 )

Weighted average common shares outstanding 130,895 125,791 129,820 125,452

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

Diluted (Loss) per Share:

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

Basic Earnings (Loss) per Share $ 0.07 $ ( 0.87 ) $ ( 0.77 ) $ ( 1.62 )

Diluted Earnings (Loss) per Share:

Net Income (Loss) $ 13 $ ( 106 ) $ ( 92 ) $ ( 196 )

Accrued dividends on preferred stock ( 3 ) ( 3 ) ( 7 ) ( 7 )

Adjusted Net (loss) available to common shareholders $ ( 109 ) $ ( 94 )

Adjusted Net income (loss) available to common shareholders $ 10 $ ( 109 ) $ ( 99 ) $ ( 203 )

Weighted average common shares outstanding 130,895 125,791 129,820 125,452

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Adjusted weighted average common shares outstanding 134,788 125,791 129,820 125,452

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

Diluted Earnings (Loss) per Share $ 0.07 $ ( 0.87 ) $ ( 0.77 ) $ ( 1.62 )

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

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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;

While there can be no assurance, as of June 30, 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 $ 282 of guarantees as of June 30, 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