Xerox : Annual Report 2023

2023 Annual Report

Table of Contents

Letter to the Shareholders

Board of Directors

Officers

2023 Form 10-K Insert

FYI

Shareholders,

2023 marked a year of significant change and progress for Xerox. Amid an ongoing challenging and uneven macroeconomic environment, the company overcame top-line headwinds to deliver growth in full-year adjusted1 operating income, EPS and free cash flow. These results are a testament to Xerox's disciplined culture. Our team's dedication proved essential as we closed out the first full year of a multi-year Reinvention designed to propel Xerox into a period of long- term, sustainable growth in revenue and profitability.

Reinvention takes a balanced approach to evolving Xerox's operating model and organizational structure, focusing on improvements to our legacy Print business while building the foundation to enhance adjacent opportunities with new and existing clients, predominantly within the mid-market, where Digital and IT Services are underutilized. Xerox's Reinvention also targets the complexity of our business - built over time, and for a different time. By focusing on opportunities in Digital and IT Services, we can meet the evolving needs of our clients in this digital age with a more efficient and agile infrastructure. Further, we can solidify our leading position in Print by becoming more competitive, easier to work with, and more relevant in today's hybrid workplace.

The leadership team spearheading this transformation is dedicated to modernizing our business while protecting Xerox's strong heritage, and our employee base is eager to embrace the change required for success. We're building a new Xerox, and the opportunity to reinvent ourselves as a brand and

an organization is truly the opportunity of a lifetime.

While navigating through this transition last year, we never lost sight of our 2023 priorities - Client Success, Profitability and Shareholder Returns - and made significant achievements in these areas along the way.

C L I E N T S U C C E S S

Client success has always been and will continue to be a point of competitive differentiation for Xerox. This includes recognizing when our clients' needs are shifting and delivering services that will help clients thrive in today's rapidly evolving, hybrid work environment. To enable complete operational focus on the delivery of positive client outcomes, in 2023

we took actions to divest businesses to focus on Xerox's core. We donated Palo Alto Research Center and divested the Xerox Research Center of Canada and Elem Additive, our 3D printing business. We established new partnerships with PEAC Solutions, an affiliate of HPS Investment Partners, to allow XeroxTM Financial Services, formerly FITTLE, to focus exclusively on financial solutions that support the sales of Xerox equipment and services. We also decided to reduce our presence in certain non-strategic markets with lower levels of profitability, such as paper and certain types of IT hardware.

This heightened focus on client success delivered the intended results, proving client-centricity can drive the revenue trajectory. We increased equipment sales, grew our net promoter score and equipment sales market share in Print, and achieved revenue renewal rates above 100 percent across large account services contract renewals. Our focus on positive client outcomes will solidify our position as a trusted advisor to clients as we build workplace technology solutions for the future. It also improves the predictability and repeatability of our business and expands our Total Addressable Market by more closely responding to, and taking advantage of, evolving market trends.

1 Refer to the "Non-GAAP Financial Measures" on page 59 of the Form 10-K, which is included in this Annual Report, for an explanation of this Non-GAAP measure.

P R O F I TA B I L I T Y

A successful Reinvention requires a strong base of profits and margin profile from which to build. We improved adjusted1 operating profit by more than $100 million, and adjusted1 profit margin by 170 basis points year-over-year. Improvements stemmed from structural cost reduction efforts, pricing discipline, ongoing operating efficiencies, and a deliberate reduction in non-strategic revenue with low levels of profitability.

S H A R E H O L D E R R E T U R N S

We believe investors should be rewarded while accompanying Xerox on its Reinvention. We are pleased to share that in 2023, we achieved our shareholder return policy while reducing total debt by approximately $450 million.

L O O K I N G A H E A D

Continued Reinvention efforts in 2024 will further strengthen our core Print, Digital and IT Services offerings and accelerate the groundwork for repositioning the business for the future.

This starts with reorganization. At the beginning of 2024, we adopted a business-unit led operating model, rather than a geographical focus and a go to market model with a greater emphasis on partner-led distribution. This structure sharpens our client-centric mentality by more closely aligning Xerox products and services with the economic buyers of today's hybrid workplace.

Naturally, reconfiguring our operating model comes with challenges, including a difficult but necessary workforce reduction. We are working to be as transparent as possible through this process, treating our employees with respect and appreciation during this trying time. We know a more streamlined operating model is critical for ensuring the long-term viability of the company.

The path forward will not be easy, but it will be worth it.

As 2024 unfolds, we will continue to be, as we've always been, transparent about our progress as we lean into new strategic priorities for the coming year: Strengthening Core Businesses, Structural Cost Improvements and Balanced Capital Allocation.

The opportunities before us present a path to long-term, sustainable growth. We know what needs to be done to achieve our business goals, and we deeply appreciate everyone who

is supporting us on this journey.

Regards,

Scott Letier	Steven J. Bandrowczak
Chairman of the Board	Chief Executive Officer

1 Refer to the "Non-GAAP Financial Measures" on page 59 of the Form 10-K, which is included in this Annual Report, for an explanation of this Non-GAAP measure.

B O A R D O F D I R E C T O R S

Scott Letier	Steven J. Bandrowczak	Philip Giordano	Nichelle Maynard-Elliott
Chairman of Xerox	Chief Executive Officer,	Founder and Chief	Former Executive Director,
Holdings, Managing	Xerox Holdings Corporation	Investment Officer, Livello	Mergers & Acquisitions,
Director of Deason Capital		Capital Management	for Praxair, Inc.
Services LLC, the family
office for Darwin Deason

Margarita Paláu- Hernández

Founder and Chief

Executive Officer,

Hernández Ventures

O F F I C E R S
Steven J. Bandrowczak	Flor Colón	Louie Pastor	Stuart Kirk
Chief Executive Officer	Executive Vice President	Executive Vice President	Vice President and Treasurer
John G. Bruno	and Chief Legal Officer and	and Chief Transformation	Eric Risi
Corporate Secretary	and Administrative Officer
President and Chief	Assistant Secretary
Operating Officer	Jacques-Edouard Gueden	Leanne Cropper
Fred Beljaars	Executive Vice President
Vice President, Global Tax
and Chief Channel and
Executive Vice President
Partner Officer	Mirlanda Gecaj
and Chief Delivery and
	Vice President and Chief
Supply Chain Officer	Xavier Heiss
Accounting Officer
	Executive Vice President
	and Chief Financial Officer

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________

FORM 10-K

_________________________________________________

(Mark One)

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2023

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: ______ to: _______

_________________________________________________

XEROX HOLDINGS CORPORATION

XEROX CORPORATION

(Exact Name of Registrant as specified in its charter)

	_________________________________________________
New York	001-39013	83-3933743
New York	001-04471	16-0468020
(State or other jurisdiction of	(Commission File Number)	(IRS Employer Identification No.)
incorporation or organization)
	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 value	XRX	Nasdaq Global Select Market
(Title of each class)	(Trading Symbol)	(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act:

None

____________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Xerox Holdings Corporation Yes ☒ No ☐

Xerox Corporation Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Xerox Holdings Corporation Yes ☐ No ☒

Xerox Corporation Yes ☐ No ☒

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 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 Corporation	☒	Xerox Corporation	☐
Large accelerated filer	Large accelerated filer
Accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Non-accelerated filer	☒
Smaller reporting company	☐	Smaller reporting company	☐
Emerging growth company	☐	Emerging 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 ☐

Xerox Corporation ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes- Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Xerox Holdings Corporation ☒

Xerox Corporation ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Xerox Holdings Corporation ☐

Xerox Corporation ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b).

Xerox Holdings Corporation ☐

Xerox Corporation ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Xerox Holdings Corporation Yes ☐ No ☒

Xerox Corporation Yes ☐ No ☒

The aggregate market value of the voting stock of the registrant held by non-affiliates as of June 30, 2023 was $2,339,287,628.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date:

Class			Outstanding at January 31, 2024
Xerox Holdings Corporation	124,182,606
Common Stock, $1 par value
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following document are incorporated herein by reference:
Document	Part of Form 10-K in Which Incorporated

Xerox Holdings Corporation Notice of 2024 Annual Meeting of

Shareholders and Proxy Statement (to be filed no later than 120 days afterIII the close of the fiscal year covered by this report on Form 10-K)

Cautionary Statement Regarding Forward-Looking Statements

This combined Annual Report on Form 10-K (Form 10-K), 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 this Form 10-K 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.

Additional risks that may affect Xerox's operations that are set forth in the "Legal Proceedings" section, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section and other sections of this Form 10-K, as well as in Xerox Holdings Corporation's and Xerox Corporation's combined Quarterly Reports on Form 10-Q and Xerox Holdings Corporation's and Xerox Corporation's Current Reports on Form 8-K filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this document or as of the date to which they refer, and we assume no obligation to update any forward-looking statements as a result of new information or future events or developments, except as required by law.

Throughout this Form 10-K, 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.

Intentionally

left blank

Xerox Holdings Corporation
Xerox Corporation
Form 10-K
December 31, 2023
	Table of Contents
		Page
Part I
Item 1.	Business	1
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	23
Item 1C.	Cybersecurity	23
Item 2.	Properties	24
Item 3.	Legal Proceedings	24
Item 4.	Mine Safety Disclosures	24
Part II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
	Purchases of Equity Securities	25
Item 6.	[Reserved]	26
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of
	Operations	27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	62
Item 8.	Financial Statements and Supplementary Data	62
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial
	Disclosure	140
Item 9A.	Controls and Procedures	140
Item 9B.	Other Information	141
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	141
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	142
Item 11.	Executive Compensation	143
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related
	Stockholder Matters	143
Item 13.	Certain Relationships, Related Transactions and Director Independence	143
Item 14.	Principal Accounting Fees and Services	143
Part IV
Item 15.	Exhibit and Financial Statement Schedules	144
Schedule II .	Xerox Holdings Corporation Valuation and Qualifying Accounts	145
Schedule II .	Xerox Corporation Valuation and Qualifying Accounts	146
Index of Exhibits	147
Item 16.	Form 10-KSummary	155
Signatures	Xerox Holdings Corporation	156
Signatures	Xerox Corporation	157