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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2024
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                        to
xeroxlogoredrgbtma07.jpg
XEROX HOLDINGS CORPORATION
XEROX CORPORATION
 (Exact Name of Registrant as specified in its charter)
New York001-3901383-3933743
New York001-0447116-0468020
(State or other jurisdiction of incorporation or organization)(Commission File Number)(IRS Employer Identification No.)
P.O. Box 4505, 201 Merritt 7
Norwalk, Connecticut 06851-1056
(Address of principal executive offices and Zip Code)
(203) 849-5216
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Xerox Holdings Corporation
Common Stock, $1 par valueXRXNasdaq Global Select Market
(Title of each class)(Trading Symbol)(Name of each exchange on which registered)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 
Xerox Holdings Corporation Yes  No              Xerox Corporation Yes  No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 
Xerox Holdings Corporation Yes  No              Xerox Corporation Yes  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.            
Xerox Holdings CorporationXerox Corporation
Large accelerated filerLarge accelerated filer
Accelerated filerAccelerated filer
Non-accelerated filerNon-accelerated filer
Smaller reporting companySmaller reporting company
Emerging growth companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Xerox Holdings Corporation o      Xerox Corporation o
Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Xerox Holdings Corporation Yes  No               Xerox Corporation Yes  No 
Class Outstanding at April 30, 2024
Xerox Holdings Corporation Common Stock, $1 par value 124,198,432 shares



Cautionary Statement Regarding Forward-Looking Statements
This combined Quarterly Report on Form 10-Q (Form 10-Q), and other written or oral statements made from time to time by management contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 that involve certain risks and uncertainties. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”, “would”, “could”, “can” “should”, “targeting”, “projecting”, “driving”, “future”, “plan”, “predict”, “may” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of Xerox Holdings Corporation’s and Xerox Corporation’s combined Annual Report on Form 10-K for the year ended December 31, 2023 under the heading “Risk Factors.” The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
Throughout this Form 10-Q, references to “Xerox Holdings” refer to Xerox Holdings Corporation and its consolidated subsidiaries while references to “Xerox” refer to Xerox Corporation and its consolidated subsidiaries. References herein to “we,” “us,” “our,” or the “Company” refer collectively to both Xerox Holdings and Xerox unless the context suggests otherwise. References to “Xerox Holdings Corporation” refer to the stand-alone parent company and do not include its subsidiaries. References to “Xerox Corporation” refer to the stand-alone company and do not include subsidiaries.
Xerox Holdings Corporation's primary direct operating subsidiary is Xerox and therefore Xerox reflects nearly all of Xerox Holdings' operations.


Xerox 2024 Form 10-Q 1


XEROX HOLDINGS CORPORATION
XEROX CORPORATION
FORM 10-Q
March 31, 2024
TABLE OF CONTENTS
 
 Page
For additional information about Xerox Holdings Corporation and Xerox Corporation and access to our Annual Reports to Shareholders and SEC filings, free of charge, please visit our website at www.xerox.com/investor. The content of our website is not incorporated by reference into this combined Form 10-Q unless expressly noted.
 
Xerox 2024 Form 10-Q 2


ITEM 1 — FINANCIAL STATEMENTS

XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME (UNAUDITED)

 Three Months Ended
March 31,
(in millions, except per-share data)20242023
Revenues
Sales$523 $659 
Services, maintenance and rentals937 1,004 
Financing42 52 
Total Revenues1,502 1,715 
Costs and Expenses
Cost of sales340 425 
Cost of services, maintenance and rentals692 665 
Cost of financing27 36 
Research, development and engineering expenses49 64 
Selling, administrative and general expenses397 407 
Restructuring and related costs, net39 2 
Amortization of intangible assets10 11 
Divestitures54  
Other expenses, net44 20 
Total Costs and Expenses1,652 1,630 
(Loss) Income before Income Taxes(150)85 
Income tax (benefit) expense(37)14 
Net (Loss) Income(113)71 
Less: Preferred stock dividends, net(4)(4)
Net (Loss) Income Attributable to Common Shareholders$(117)$67 
Basic (Loss) Earnings per Share$(0.94)$0.43 
Diluted (Loss) Earnings per Share$(0.94)$0.43 



The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
Xerox 2024 Form 10-Q 3


XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

 Three Months Ended
March 31,
(in millions)20242023
Net (Loss) Income$(113)$71 
Other Comprehensive (Loss) Income, Net(1)
Translation adjustments, net(32)93 
Unrealized (losses) gains, net(1)4 
Changes in defined benefit plans, net36 (14)
Other Comprehensive Income, Net3 83 
Comprehensive (Loss) Income, Net$(110)$154 
_____________
(1) Refer to Note 19 - Other Comprehensive Income for gross components of Other comprehensive income, net, reclassification adjustments out of Accumulated other comprehensive loss and related tax effects.




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

Xerox 2024 Form 10-Q 4


XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data in thousands)March 31,
2024
December 31,
2023
Assets
Cash and cash equivalents$685 $519 
Accounts receivable (net of allowance of $65 and $64, respectively)
846 850 
Billed portion of finance receivables (net of allowance of $3 and $4, respectively)
67 71 
Finance receivables, net783 842 
Inventories736 661 
Other current assets231 234 
Total current assets3,348 3,177 
Finance receivables due after one year (net of allowance of $85 and $88, respectively)
1,408 1,597 
Equipment on operating leases, net257 265 
Land, buildings and equipment, net245 266 
Intangible assets, net165 177 
Goodwill, net2,720 2,747 
Deferred tax assets749 745 
Other long-term assets1,052 1,034 
Total Assets$9,944 $10,008 
Liabilities and Equity
Short-term debt and current portion of long-term debt$405 $567 
Accounts payable1,046 1,044 
Accrued compensation and benefits costs213 306 
Accrued expenses and other current liabilities774 862 
Total current liabilities2,438 2,779 
Long-term debt3,199 2,710 
Pension and other benefit liabilities1,183 1,216 
Post-retirement medical benefits167 171 
Other long-term liabilities352 360 
Total Liabilities7,339 7,236 
Commitments and Contingencies (See Note 21)
Noncontrolling Interests10 10 
Convertible Preferred Stock214 214 
Common stock124 123 
Additional paid-in capital1,099 1,114 
Retained earnings4,828 4,977 
Accumulated other comprehensive loss(3,673)(3,676)
Xerox Holdings shareholders’ equity2,378 2,538 
Noncontrolling interests3 10 
Total Equity2,381 2,548 
Total Liabilities and Equity$9,944 $10,008 
Shares of Common Stock Issued and Outstanding124,185 123,144 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
Xerox 2024 Form 10-Q 5


XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 Three Months Ended
March 31,
(in millions)20242023
Cash Flows from Operating Activities
Net (Loss) Income$(113)$71 
Adjustments required to reconcile Net (loss) income to cash flows (used in) provided by operating activities
Depreciation and amortization59 64 
Provisions57  
Divestitures54  
Stock-based compensation12 14 
Restructuring and asset impairment charges31 1 
Payments for restructurings(16)(6)
Non-service retirement-related costs23 (1)
Contributions to retirement plans(31)(17)
(Increase) decrease in accounts receivable and billed portion of finance receivables(19)39 
Increase in inventories(133)(64)
Increase in equipment on operating leases(22)(40)
Decrease in finance receivables210 160 
(Increase) decrease in other current and long-term assets(2)3 
Increase (decrease) in accounts payable17 (41)
Decrease in accrued compensation(86)(16)
Decrease in other current and long-term liabilities(77)(128)
Net change in income tax assets and liabilities(44)18 
Net change in derivative assets and liabilities6 13 
Other operating, net(5)8 
Net cash (used in) provided by operating activities(79)78 
Cash Flows from Investing Activities
Cost of additions to land, buildings, equipment and software(10)(8)
Proceeds from sales of businesses and assets4 1 
Acquisitions, net of cash acquired (7)
Other investing, net(11)(3)
Net cash used in investing activities(17)(17)
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt905  
Payments on long-term debt(570)(452)
Purchases of capped calls(23) 
Dividends(37)(45)
Payments to acquire treasury stock, including fees(3) 
Other financing, net(11)(8)
Net cash provided by (used in) financing activities261 (505)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(10)2 
Increase (decrease) in cash, cash equivalents and restricted cash155 (442)
Cash, cash equivalents and restricted cash at beginning of period617 1,139 
Cash, Cash Equivalents and Restricted Cash at End of Period$772 $697 





The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
Xerox 2024 Form 10-Q 6


XEROX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME (UNAUDITED)

 Three Months Ended
March 31,
(in millions)20242023
Revenues
Sales$523 $659 
Services, maintenance and rentals937 1,004 
Financing42 52 
Total Revenues1,502 1,715 
Costs and Expenses
Cost of sales340 425 
Cost of services, maintenance and rentals692 665 
Cost of financing27 36 
Research, development and engineering expenses49 64 
Selling, administrative and general expenses397 407 
Restructuring and related costs, net39 2 
Amortization of intangible assets10 11 
Divestitures54  
Other expenses, net44 20 
Total Costs and Expenses1,652 1,630 
(Loss) Income before Income Taxes(150)85 
Income tax (benefit) expense(37)14 
Net (Loss) Income$(113)$71 








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

Xerox 2024 Form 10-Q 7


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

 Three Months Ended
March 31,
(in millions)20242023
Net (Loss) Income$(113)$71 
Other Comprehensive (Loss) Income, Net(1)
Translation adjustments, net(32)93 
Unrealized (losses) gains, net(1)4 
Changes in defined benefit plans, net36 (14)
Other Comprehensive Income, Net3 83 
Comprehensive (Loss) Income, Net$(110)$154 
_____________
(1) Refer to Note 19 - Other Comprehensive Income for gross components of Other comprehensive income, net, reclassification adjustments out of Accumulated other comprehensive loss and related tax effects.



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

Xerox 2024 Form 10-Q 8


XEROX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions)March 31,
2024
December 31,
2023
Assets
Cash and cash equivalents$682 $519 
Accounts receivable (net of allowance of $65 and $64, respectively)
846 850 
Billed portion of finance receivables (net of allowance of $3 and $4, respectively)
67 71 
Finance receivables, net783 842 
Inventories736 661 
Other current assets231 234 
Total current assets3,345 3,177 
Finance receivables due after one year (net of allowance of $85 and $88, respectively)
1,408 1,597 
Equipment on operating leases, net257 265 
Land, buildings and equipment, net245 266 
Intangible assets, net165 177 
Goodwill, net2,720 2,747 
Deferred tax assets749 745 
Other long-term assets1,025 1,008 
Total Assets$9,914 $9,982 
Liabilities and Equity
Short-term debt and current portion of long-term debt$405 $567 
Accounts payable1,046 1,044 
Accrued compensation and benefits costs213 306 
Accrued expenses and other current liabilities733 820 
Total current liabilities2,397 2,737 
Long-term debt1,177 1,213 
Related party debt2,022 1,497 
Pension and other benefit liabilities1,183 1,216 
Post-retirement medical benefits167 171 
Other long-term liabilities352 360 
Total Liabilities7,298 7,194 
Commitments and Contingencies (See Note 21)
Noncontrolling Interests10 10 
Additional paid-in capital3,465 3,485 
Retained earnings2,811 2,959 
Accumulated other comprehensive loss(3,673)(3,676)
Xerox shareholder's equity2,603 2,768 
Noncontrolling interests3 10 
Total Equity2,606 2,778 
Total Liabilities and Equity$9,914 $9,982 





The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 
Xerox 2024 Form 10-Q 9


XEROX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 Three Months Ended
March 31,
(in millions)20242023
Cash Flows from Operating Activities
Net (Loss) Income$(113)$71 
Adjustments required to reconcile Net (loss) income to cash flows (used in) provided by operating activities
Depreciation and amortization59 64 
Provisions57  
Divestitures54  
Stock-based compensation12 14 
Restructuring and asset impairment charges31 1 
Payments for restructurings(16)(6)
Non-service retirement-related costs23 (1)
Contributions to retirement plans(31)(17)
(Increase) decrease in accounts receivable and billed portion of finance receivables(19)39 
Increase in inventories(133)(64)
Increase in equipment on operating leases(22)(40)
Decrease in finance receivables210 160 
(Increase) decrease in other current and long-term assets(2)3 
Increase (decrease) in accounts payable17 (41)
Decrease in accrued compensation(86)(16)
Decrease in other current and long-term liabilities(77)(128)
Net change in income tax assets and liabilities(44)18 
Net change in derivative assets and liabilities6 13 
Other operating, net(5)8 
Net cash (used in) provided by operating activities(79)78 
Cash Flows from Investing Activities
Cost of additions to land, buildings, equipment and software(10)(8)
Proceeds from sales of businesses and assets4 1 
Acquisitions, net of cash acquired (7)
Other investing, net(11) 
Net cash used in investing activities(17)(14)
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt905  
Payments on long-term debt(570)(452)
Distributions to parent(75)(54)
Other financing, net(2)(2)
Net cash provided by (used in) financing activities258 (508)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(10)2 
Increase (decrease) in cash, cash equivalents and restricted cash152 (442)
Cash, cash equivalents and restricted cash at beginning of period617 1,139 
Cash, Cash Equivalents and Restricted Cash at End of Period$769 $697 




The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
Xerox 2024 Form 10-Q 10


XEROX HOLDINGS CORPORATION
XEROX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in millions, except per-share data and where otherwise noted)

Note 1 – Basis of Presentation
References to “Xerox Holdings” refer to Xerox Holdings Corporation and its consolidated subsidiaries, while references to “Xerox” refer to Xerox Corporation and its consolidated subsidiaries. References herein to “we,” “us,” “our,” and the “Company” refer collectively to both Xerox Holdings and Xerox unless the context suggests otherwise. References to "Xerox Holdings Corporation" refer to the stand-alone parent company and do not include its subsidiaries. References to "Xerox Corporation" refer to the stand-alone company and do not include its subsidiaries.
The accompanying unaudited Condensed Consolidated Financial Statements and footnotes represent the respective, consolidated results and financial results of Xerox Holdings and Xerox and all respective companies that each registrant directly or indirectly controls, either through majority ownership or otherwise. 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 2023 Annual Report on Form 10-K (2023 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. You should read these Condensed Consolidated Financial Statements in conjunction with the Consolidated Financial Statements included in the 2023 Annual Report.
In our opinion, all adjustments necessary for a fair statement of financial position, operating results and cash flows for the interim periods presented have been made. These adjustments consist of normal recurring items. Interim results of operations are not necessarily indicative of the results of the full year.
For convenience and ease of reference, we refer to the financial statement caption “(Loss) Income before Income Taxes” as “pre-tax (loss) income”.
Notes to the Condensed Consolidated Financial Statements reflect the activity for both Xerox Holdings and Xerox for all periods presented, unless otherwise noted.
Goodwill
Our Goodwill, net balance was $2,720 and $2,747 at March 31, 2024 and December 31, 2023, 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.
The Company's actual results for the full year 2024 are in line with expectations reviewed as part of our fourth quarter 2023 Goodwill qualitative assessment. Accordingly, as of March 31, 2024, 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, or estimates, including assumptions related to current macro-economic uncertainties, this may impact the impairment analysis and could reduce the underlying cash flows used to estimate fair values and result in a decline in fair value that may trigger future impairment charges. We will continue to monitor developments throughout the remainder of 2024 including updates to our forecasts as well as discount rates and our market capitalization, and an update of our assessment and related estimates may be required in the future.
Xerox 2024 Form 10-Q 11


Note 2 – Recent Accounting Pronouncements
Xerox Holdings and Xerox consider the applicability and impact of all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB). 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.
Accounting Standard Updates to be Adopted:
Reference Rate Reform
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), Scope, which provided clarification to ASU 2020-04. These ASUs were effective commencing with our quarter ended March 31, 2020 through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, which defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.
There has been no material impact to date as a result of adopting these ASUs on reference rate reform. However, we continue to evaluate potential future impacts that may result from the discontinuation of LIBOR or other reference rates as well as the accounting provided in this update on our financial condition, results of operations, and cash flows.
Segment Disclosures
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The update will require public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within segment profit and loss. The amendments are effective for the Company's annual periods beginning January 1, 2024, and interim periods beginning January 1, 2025, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. 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.
Accounting Standard Updates Recently Adopted:
Liabilities
In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations that requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The new standard’s requirements to disclose the key terms of the programs and information about obligations outstanding were effective for our fiscal year beginning on January 1, 2023, and the requirement to disclose a rollforward of obligations outstanding is effective for our annual reporting for the fiscal year beginning on January 1, 2024. Refer to Note 12 - Supplementary Financial Information for the required disclosures.
Other Updates
In 2024, 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.
Xerox 2024 Form 10-Q 12


Compensation - Stock Compensation: ASU 2024-01, Compensation - Stock Compensation (Topic 718) - Scope Applications of Profits Interest and Similar Awards. This update is effective for the annual period beginning after December 15, 2024, as well as interim periods within that period, with early adoption permitted.
Codification Improvements: ASU 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements. This update is effective for our fiscal year beginning after December 15, 2024.
Note 3 – Revenue
Revenues disaggregated by primary geographic markets, major product lines, and sales channels are as follows:
Three Months Ended
March 31,
20242023
Primary geographical markets(1):
United States$811 $947 
Europe451 474 
Canada121 144 
Other119 150 
Total Revenues$1,502 $1,715 
Major product and services lines:
Equipment$290 $391 
Supplies, paper and other sales(2)
233 268 
Maintenance agreements(3)
387 409 
Service arrangements(4)
473 495 
Rental and other77 100 
Financing42 52 
Total Revenues$1,502 $1,715 
Sales channels:
Direct equipment lease(5)
$162 $230 
Distributors & resellers(6)
215 260 
Customer direct146 169 
Total Sales(7)
$523 $659 
_____________
(1)Geographic area data is based upon the location of the subsidiary reporting the revenue.
(2)Other sales include revenues associated with IT hardware.
(3)Includes revenues from maintenance agreements on sold equipment as well as IT services and revenues associated with service agreements sold through our channel partners.
(4)Primarily includes revenues from our Print and digital services outsourcing arrangements, including revenues from embedded operating leases in those arrangements, which were not significant.
(5)Primarily reflects sales through bundled lease arrangements.
(6)Primarily reflects sales through our two-tier distribution channels.
(7)Includes Equipment and Supplies, paper and other sales revenues.
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 $121 and $132 at March 31, 2024 and December 31, 2023, respectively. The majority of the balance at March 31, 2024 will be amortized to revenue over the next 30 months.
Xerox 2024 Form 10-Q 13


Contract Costs:
We incur the following contract costs as part of our revenue arrangements:
Incremental direct costs of obtaining a contract, which are primarily sales commissions paid to salespeople and agents in connection with the placement of equipment with associated post sale services arrangements. These costs are deferred and amortized to Selling Expenses on a straight-line basis over the estimated contract term, which is currently estimated to be approximately four years. We pay commensurate sales commissions upon customer renewals; therefore, our amortization period is aligned to our initial contract term.
Contract fulfillment costs, which are costs incurred for resources and assets that will be used to satisfy our future performance obligations included in our service arrangements. 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.
Changes in contract costs, net are as follows:
20242023
Balance at January 1st,$136 $135 
Customer contract costs deferred15 16 
Amortization of customer contract costs(16)(16)
Other(1)
(1)(1)
Balance at March 31st,$134 $134 
_____________
(1)Includes currency.
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.
Note 4 – Segment Reporting
Our reportable segments - Print and Other, and Xerox Financial Services (XFS) (formerly FITTLE) – are aligned to how the Chief Operating Decision Maker (CODM), our Chief Executive Officer (CEO), allocates resources and assesses performance against the Company’s key growth strategies and are consistent with how we manage the business and view the markets we serve.
Our Print and Other segment includes the sale of document systems, supplies and technical services and managed services. The segment also includes the delivery of managed services that involve a continuum of solutions and services that help our customers optimize their print and communications infrastructure, apply automation and simplification to maximize productivity, and ensure the highest levels of security. This segment also includes Digital and IT services and software. The product groupings range from:
“Entry”, which include A4 devices and desktop printers and multifunction devices that primarily serve small and medium workgroups/work teams.
“Mid-Range”, which include A3 devices that generally serve large workgroup/work team environments as well as products in the Light Production product groups serving centralized print centers, print for pay and low volume production print establishments.
“High-End”, which include production printing and publishing systems that generally serve the graphic communications marketplace and print centers in large enterprises.
Customers range from small and mid-sized businesses to large enterprises. Customers also include graphic communication enterprises as well as channel partners including distributors and resellers. Segment revenues also include commissions and other payments from our XFS segment for the exclusive right to provide lease financing for Xerox products. These revenues are reported as part of Intersegment Revenues, which are eliminated in consolidated revenues.
The XFS segment provides global leasing solutions and currently offers leasing for direct channel customer purchases of Xerox solutions through bundled lease agreements and lease financing to end-user customers who purchase Xerox solutions through our indirect channels. Segment revenues primarily include financing income on sales-type leases (including month-to-month extensions) and leasing fees. Segment revenues also include gains/
Xerox 2024 Form 10-Q 14


losses from the sale of finance receivables including commissions, fees on the sales of underlying equipment residuals and servicing fees.
Selected financial information for our reportable segments was as follows:
Three Months Ended March 31,
20242023
Print and OtherXFSTotalPrint and OtherXFSTotal
External revenue$1,411 $91 $1,502 $1,613 $102 $1,715 
Intersegment revenue(1)
19  19 23  23 
Total Segment revenue$1,430 $91 $1,521 $1,636 $102 $1,738 
Segment profit$33 $ $33 $100 $18 $118 
Segment margin(2)
2.3 % %2.2 %6.2 %17.6 %6.9 %
Depreciation and amortization$49 $ $49 $53 $ $53 
Interest income 42 42  52 52 
Interest expense 27 27  39 39 
_____________
(1)Intersegment revenue is primarily commissions and other payments made by the XFS Segment to the Print and Other Segment for the lease of Xerox equipment placements.
(2)Segment margin based on External revenue only.

Selected financial information for our reportable segments was as follows:
Three Months Ended
March 31,
20242023
Pre-tax (Loss) Income
Total reported segments$33 $118 
Restructuring and related costs, net(39)(2)
Amortization of intangible assets(10)(11)
Divestitures(54) 
Inventory-related impact - exit of certain production print manufacturing operations(36) 
Other expenses, net(44)(20)
Total Pre-tax (loss) income$(150)$85 
Depreciation and Amortization
Total reported segments$49 $53 
Amortization of intangible assets10 11 
Total Depreciation and amortization$59 $64 
Interest Expense
Total reported segments$27 $39 
Corporate26 11 
Total Interest expense$53 $50 
Interest Income
Total reported segments$42 $52 
Corporate3 5 
Total Interest income$45 $57 
_____________
(1)Reflects the reduction of raw materials inventory of approximately $32 and the cancellation of related purchase contracts of approximately $4, as a result of the exit of certain production print manufacturing operations during the three months ended March 31, 2024.
Xerox 2024 Form 10-Q 15


Note 5 – Lessor
Revenue from sales-type leases is presented on a gross basis when the Company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where the Company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if any, is presented on a net basis. In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration and present revenue net of these costs.
The components of lease income are as follows:
Three Months Ended
March 31,
Location in Statements of (Loss) Income20242023
Revenue from sales type leasesSales$162 $230 
Interest income on lease receivablesFinancing42 52 
Lease income - operating leasesServices, maintenance and rentals41 40 
Variable lease incomeServices, maintenance and rentals13 17 
Total Lease income$258 $339 
Profit at lease commencement on sales-type leases was estimated to be $50 and $80 for the three months ended March 31, 2024 and 2023, respectively.
Note 6 – Divestitures
Sales of Argentina and Chile
In March 2024, Xerox completed the sales of its direct business operations in Argentina and Chile to Grupo Datco, a technologies and fiber optic network service provider in Latin America for a total consideration of $16. Following the transfer of ownership, the new companies will operate as independent entities and Grupo Datco will continue to service Xerox devices previously sold in Argentina and Chile and will become the exclusive partner for Xerox in these markets. This transaction aligns with the Company's ongoing Reinvention.
The sales resulted in a net disposal loss of $54 in the first quarter 2024, which includes, a net currency translation loss of $40, allocated Goodwill of $10, and the carrying value of the net assets of $18, as well as related fees of $2. The allocation of Goodwill was based on the relative fair value of the operations in Argentina and Chile to the total fair value for the Print and Other Segment Reporting Unit, which it was part of prior to the sales. The estimated fair values of the operations in Argentina and Chile as well as the Print and Other reporting unit are based on estimates and assumptions that are considered Level 3 inputs under the fair value hierarchy. Xerox also recorded a net income tax benefit of $19 related to the sales for a net after-tax loss on the sales of $35. The sales of the Argentina and Chile subsidiaries are not expected to materially impact current estimates of future projections with respect to results of operations or cash flows of the Company.
Xerox 2024 Form 10-Q 16


Note 7 – Accounts Receivable, Net
Accounts receivable, net were as follows:
March 31,
2024
December 31,
2023
Invoiced$715 $710 
Accrued(1)
196 204 
Allowance for doubtful accounts(65)(64)
Accounts receivable, net$846 $850 
_____________
(1)Accrued receivables include amounts to be invoiced in the subsequent quarter for current services provided.
The allowance for doubtful accounts was as follows:
20242023
Balance at January 1st
$64 $52 
Provision6 3 
Charge-offs(3)(5)
Recoveries and other(1)
(2)3 
Balance at March 31st
$65 $53 
_____________
(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.
We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness. The allowance for uncollectible accounts receivable is determined based on an assessment of past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends. Based on that assessment the allowance for doubtful accounts as a percent of gross accounts receivable was 7.1% at March 31, 2024 and 7.0% at December 31, 2023.
Accounts Receivable Sales Arrangements
We have one facility in Europe that enables us to sell accounts receivable associated with our distributor network on an ongoing basis, without recourse. Under this arrangement, we sell our entire interest in the related accounts receivable for cash and no portion of the payment is held back or deferred by the purchaser.
Accounts receivable sales activity was as follows:
 Three Months Ended
March 31,
 20242023
Accounts receivable sales(1)
$91 $86 
____________
(1)Losses on sales were not material.
Xerox 2024 Form 10-Q 17


Note 8 – Finance Receivables, Net
Finance receivables include sales-type leases and installment loans arising from the marketing of our equipment. These receivables are typically collateralized by a security interest in the underlying assets.
Finance receivables, net were as follows:
 March 31,
2024
December 31,
2023
Gross receivables$2,602 $2,899 
Unearned income(256)(297)
Subtotal2,346 2,602 
Residual values  
Allowance for doubtful accounts(88)(92)
Finance receivables, net2,258 2,510 
Less: Billed portion of finance receivables, net67 71 
Less: Current portion of finance receivables not billed, net783 842 
Finance receivables due after one year, net$1,408 $1,597 
Finance Receivables – Allowance for Credit Losses and Credit Quality
Our finance receivable portfolios are primarily in the U.S., Canada and EMEA. We generally establish customer credit limits and estimate the allowance for credit losses on a country or geographic basis. Customer credit limits are based upon an initial evaluation of the customer's credit quality, and we adjust that limit accordingly based upon ongoing credit assessments of the customer, including payment history and changes in credit quality.
The allowance for doubtful credit losses is principally determined based on an assessment of origination year and past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends. Based on that assessment, the allowance for doubtful credit losses as a percentage of gross finance receivables (net of unearned income) was 3.8% at March 31, 2024 and 3.5% at December 31, 2023. Our finance receivable bad debt provision in the first quarter 2023 was a credit of $12 primarily related to a reserve release in the U.S. due to the favorable reassessment of the credit exposure on a large customer receivable balance after a contract amendment, which improved our credit position.
Our allowance for doubtful finance receivables is effectively determined by geography. The risk characteristics in our finance receivable portfolio segments are generally consistent with the risk factors associated with the economies of the countries/regions included in those geographies. Since EMEA is comprised of various countries and regional economies, the risk profile within that portfolio segment is somewhat more diversified due to the varying economic conditions among and within the countries.
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 2024 Form 10-Q 18


The allowance for doubtful accounts as well as the related investment in finance receivables were as follows:
United StatesCanadaEMEATotal
Balance at December 31, 2023
$58 $7 $27 $92 
Provision(3)5 6 8 
Charge-offs(7)(1)(4)(12)
Recoveries and other(1)
1  (1) 
Balance at March 31, 2024$49 $11 $28 $88 
Balance at December 31, 2022
$83 $7 $27 $117 
Provision(15) 3 (12)
Charge-offs(5) (2)(7)
Recoveries and other(1)
2  1 3 
Balance at March 31, 2023$65 $7 $29 $101 
Finance receivables collectively evaluated for impairment (3)
March 31, 2024(2)
$1,035 $243 $1,068 $2,346 
March 31, 2023(2)
$1,756 $233 $1,092 $3,081 
_____________
(1)Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.
(2)Total Finance receivables exclude the allowance for credit losses of $88 and $101 at March 31, 2024 and 2023, respectively.
In the U.S., customers are further evaluated by class based on the type of lease origination. The primary categories are direct, which primarily includes leases originated directly with end-user customers through bundled lease arrangements, and indirect, which primarily includes leases originated through our XBS sales channel and lease financing to end-user customers who purchased equipment we sold to distributors or resellers.
We evaluate our customers based on the following credit quality indicators:
Low Credit Risk: This rating includes accounts with excellent to good business credit, asset quality and capacity to meet financial obligations. These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance. Loss rates in this category in the normal course are generally less than 1%.
Average Credit Risk: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. Although we experience higher loss rates associated with this customer class, we believe the risk is somewhat mitigated by the fact that our leases are fairly well dispersed across a large and diverse customer base. In addition, the higher loss rates are largely offset by the higher rates of return we obtain with such leases. Loss rates in this category in the normal course are generally in the range of 2% to 5%.
High Credit Risk: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. We use numerous strategies to mitigate risk including higher rates of interest, prepayments, personal guarantees, etc. Accounts in this category include customers who were downgraded during the term of the lease from low and average credit risk evaluation when the lease was originated. Accordingly, there is a distinct possibility for a loss of principal and interest or customer default. The loss rates in this category in the normal course are generally in the range of 7% to 10%.
Credit quality indicators are updated at least annually, or more frequently to the extent required by economic conditions, and the credit quality of any given customer can change during the life of the portfolio.
Xerox 2024 Form 10-Q 19


Details about our finance receivables portfolio based on geography, origination year and credit quality indicators are as follows:
 March 31, 2024
 20242023202220212020PriorTotal
Finance
Receivables
United States (Direct)
Low Credit Risk$40 $81 $46 $51 $34 $12 $264 
Average Credit Risk24 79 32 44 19 8 206 
High Credit Risk9 30 31 21 16 6 113 
Total $73 $190 $109 $116 $69 $26 $583 
Charge-offs$ $ $ $ $ $1 $1 
United States (Indirect)
Low Credit Risk$19 $103 $57 $34 $14 $3 $230 
Average Credit Risk16 88 53 30 10 2 199 
High Credit Risk1