ADD to BW2062, CT-XEROX.Business Editors --(BUSINESS WIRE) ADD to BW2062 (CT-XEROX) following the final graf (safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. statement): Performance Review Introduction On April 11, 2002, we announced that we had concluded our settlement with the Securities and Exchange Commission (SEC) on the previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). matters that have been under investigation since June June: see month. 2000. As a result, the company has agreed to restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its financial statements for the years 1997 through 2000 as well as adjust the previously announced 2001 results. This is in addition to a previous restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. included in our 2000 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . The new restatement will primarily reflect adjustments in the timing and allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of lease revenue, which will be reallocated among equipment, service, supplies and finance revenue streams as appropriate by applying a methodology different than the one the company had used during those years. The resulting timing and allocation adjustments cannot be estimated until the restatement process has been completed. In any event, there will be no impact on the cash that has been received or is contractually con·trac·tu·al adj. Of, relating to, or having the nature of a contract. con·trac  tu·al·ly adv.Adv. 1. due to be received from these leases. Furthermore, the monetary value of the leases does not change. The restatement will also include adjustments that could be in excess of $300 million due to the establishment and release of certain reserves prior to 2001 and the timing of recognition of interest income on tax refunds Tax refund Money back from the government when too much tax has been paid or withheld from a salary. . To allow for the additional time required to prepare the restatement and to make these adjustments, the SEC issued an Order granting an extension until June 30, 2002 for the filing of the Xerox Corporation (company) XEROX Corporation - http://xerox.com/. See also XEROX PARC, XEROX Network Services. and Xerox (Xerox Corporation, Stamford, CT, www.xerox.com) A major manufacturer of analog and digital copy machines, computer printers and document management systems. Corporate headquarters are in Stamford, CT, while manufacturing and marketing is in Rochester, NY. Credit Corporation 2001 Forms 10-K and first quarter 2002 Forms 10-Q. The Order provides that a filing made on or before June 30, 2002 will be deemed to have been filed on the prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). due date. For further information regarding the Consent Order see the "SEC Settlement" section that follows. These preliminary results are unaudited, are presented using the company's historical methodology for allocating lease revenue from its bundled bun·dle n. 1. A group of objects held together, as by tying or wrapping. 2. Something wrapped or tied up for carrying; a package. 3. Biology A cluster or strand of closely bound muscle or nerve fibers. arrangements, which the SEC believes is not in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), and do not reflect the restatement or the effects thereof for 1997 through 2000 or adjustments to previously reported 2001 results. The company is currently in the process of implementing a new methodology for allocating lease revenue, which will be used in preparing the restatement, making the adjustments to 2001 and reallocating lease revenues generated in the first quarter of 2002 and thereafter. The impact of the new methodology is currently not determinable Liable to come to an end upon the happening of a certain contingency. Susceptible of being determined, found out, definitely decided upon, or settled. determinable adj. . Accordingly, the financial information presented here is subject to adjustment upon the completion of such process and should not be relied upon as reflecting the company's financial results. Moreover, while the presentation of the preliminary first quarter results according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the historical methodology would appear to provide comparability to the previously announced 2001 first quarter results, the year-over-year comparison may not be reliable because of the possibility that the restatement and 2001 adjustments may impact those periods differently. For these reasons, we have limited our discussion of financial information. We have provided trend information in key areas, although even trends may be subject to change. Our detailed financial results will be reported in our 2001 Form 10-K filing and first quarter 2002 Form 10-Q Form 10-Q See 10-Q. filing following completion of the restatement process. As noted above, it is the SEC's view that the methodology historically applied by the Company to allocate To reserve a resource such as memory or disk. See memory allocation. lease revenue from its bundled arrangements is not in accordance with GAAP. The contracts typically include equipment, service, supplies and financing components for which the customer pays a negotiated price on a monthly basis as well as a variable service component for page volumes in excess of stated minimums. Xerox is in the process of changing its revenue allocation methodology to estimate "normal selling prices" (fair value) of equipment using an approach based on verifiable objective evidence of value, including prices achieved in its cash sales sales made for ready, money, in distinction from those on which credit is given; stocks sold, to be delivered on the day of transaction. See also: Cash and other market based information. The full implementation of this methodology requires application at detailed levels of the business and is inextricably in·ex·tri·ca·ble adj. 1. a. So intricate or entangled as to make escape impossible: an inextricable maze; an inextricable web of deceit. b. linked to the restatement process and to the adjustment of previously reported 2001 results. Summary A summary of our performance for the first quarter of 2002 follows: - In April 2002, we signed an agreement with GE Capital Vendor Financial Services (GE Capital) for the establishment of Xerox Capital Services (XCS), a joint venture between Xerox and GE Capital, which is expected to close and become operational on May 1, 2002. XCS will be a consolidated entity and will provide Xerox's customer administration and leasing activities in the U.S., including various financing programs, credit approval, order processing, billing and collections. - In April 2002, we signed an agreement with GE Capital to extend the U.S. finance receivable monetization arrangement, which will provide Xerox with additional funding while the two companies finalize their arrangement for GE Capital to become the primary provider of equipment financing for Xerox customers in the U.S. The additional funding is expected to be approximately $1 billion this year, secured by portions of Xerox's current and future lease receivables in the U.S. - In first quarter 2002 we received $510 million, net of escrow and fees, of financing from GE Capital, secured by portions of Xerox's lease receivables in the U.S. and Canada. - In February 2002, we activated the previously announced joint venture with De Lage Landen (DLL) to manage equipment financing, billing and collections for the financing of Xerox equipment in the Netherlands. DLL owns 51 percent of the joint venture and provides the funding to support all new customer leases. Xerox owns the remaining 49 percent. - In March 2002, Banco Itau, S.A agreed to become the primary provider of equipment financing for Xerox customers in Brazil. They began providing the equipment financing for new activations in April 2002. - In March 2002, CIT Group affiliates in Mexico agreed to become the primary provider of equipment financing for Xerox customers in Mexico. They began providing the equipment financing for new activations in April 2002. - On April 2, 2002, we sold our equipment financing operations in Italy for $227 million, including the assumption of $20 million of third party debt. In addition to purchasing our existing lease portfolio in Italy, our financing partner will also provide ongoing, exclusive equipment financing for new activations. - In April 2002, we signed an agreement with GE Capital Vendor Financial Services (GE Capital) for the establishment of Xerox Capital Services (XCS), a joint venture between Xerox and GE Capital, which is expected to close and become operational on May 1, 2002. XCS will be a consolidated entity and will provide Xerox's customer administration and leasing activities in the U.S., including various financing programs, credit approval, order processing, billing and collections. - In April 2002, we signed an agreement with GE Capital to extend the U.S. finance receivable monetization arrangement, which will provide Xerox with additional funding while the two companies finalize their arrangement for GE Capital to become the primary provider of equipment financing for Xerox customers in the U.S. The additional funding is expected to be approximately $1 billion this year, secured by portions of Xerox's current and future lease receivables in the U.S. - In first quarter 2002 we received $510 million, net of escrow and fees, of financing from GE Capital, secured by portions of Xerox's lease receivables in the U.S. and Canada. - In February 2002, we activated the previously announced joint venture with De Lage Landen (DLL) to manage equipment financing, billing and collections for the financing of Xerox equipment in the Netherlands. DLL owns 51 percent of the joint venture and provides the funding to support all new customer leases. Xerox owns the remaining 49 percent. - In March 2002, Banco Itau, S.A agreed to become the primary provider of equipment financing for Xerox customers in Brazil. They began providing the equipment financing for new activations in April 2002. - In March 2002, CIT Group affiliates in Mexico agreed to become the primary provider of equipment financing for Xerox customers in Mexico. They began providing the equipment financing for new activations in April 2002. - On April 2, 2002, we sold our equipment financing operations in Italy for $227 million, including the assumption of $20 million of third party debt. In addition to purchasing our existing lease portfolio in Italy, our financing partner will also provide ongoing, exclusive equipment financing for new activations. - In April 2002, we signed an agreement with GE Capital Vendor Financial Services (GE Capital) for the establishment of Xerox Capital Services (XCS), a joint venture between Xerox and GE Capital, which is expected to close and become operational on May 1, 2002. XCS will be a consolidated entity and will provide Xerox's customer administration and leasing activities in the U.S., including various financing programs, credit approval, order processing, billing and collections. - In April 2002, we signed an agreement with GE Capital to extend the U.S. finance receivable monetization arrangement, which will provide Xerox with additional funding while the two companies finalize their arrangement for GE Capital to become the primary provider of equipment financing for Xerox customers in the U.S. The additional funding is expected to be approximately $1 billion this year, secured by portions of Xerox's current and future lease receivables in the U.S. - In first quarter 2002 we received $510 million, net of escrow and fees, of financing from GE Capital, secured by portions of Xerox's lease receivables in the U.S. and Canada. - In February 2002, we activated the previously announced joint venture with De Lage Landen (DLL) to manage equipment financing, billing and collections for the financing of Xerox equipment in the Netherlands. DLL owns 51 percent of the joint venture and provides the funding to support all new customer leases. Xerox owns the remaining 49 percent. - In March 2002, Banco Itau, S.A agreed to become the primary provider of equipment financing for Xerox customers in Brazil. They began providing the equipment financing for new activations in April 2002. - In March 2002, CIT Group affiliates in Mexico agreed to become the primary provider of equipment financing for Xerox customers in Mexico. They began providing the equipment financing for new activations in April 2002. - On April 2, 2002, we sold our equipment financing operations in Italy for $227 million, including the assumption of $20 million of third party debt. In addition to purchasing our existing lease portfolio in Italy, our financing partner will also provide ongoing, exclusive equipment financing for new activations. These positive items were partially offset by restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). payments of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $100 million. - As of March 31, 2002, we had approximately $9.4 billion and $2.9 billion of debt obligations maturing in 2002 and 2003, as summarized below (in billions):
2002 2003
First Quarter $ - $0.3
Second Quarter 1.3 1.1
Third Quarter 0.3 0.2
Fourth Quarter 7.8 1.3
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Full Year $9.4 $2.9
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Debt obligations due throughout the remainder of 2002 total approximately $9.4 billion and include the $7 billion Revolving Credit Agreement Revolving credit agreement A legal commitment in which a bank promises to lend a customer up to a specified maximum amount during a specified period. revolving credit agreement See line of credit. (Revolver revolver: see small arms. revolver Pistol with a revolving cylinder that provides multishot action. Some early versions, known as pepperboxes, had several barrels, but as early as the 17th century pistols were being made with a revolving chamber to ), which matures in October October: see month. . The principal terms and conditions for refinancing Refinancing An extension and/or increase in amount of existing debt. a portion of the Revolver and extending its maturity beyond October 2002 have been distributed to the 57 lenders in the Revolver. Following approval from these lenders as well as the negotiation and execution of the definitive agreements, the refinancing is expected to be finalized See finalization. no later than June 30, 2002. - In April 2002, we signed an agreement with GE Capital Vendor Financial Services (GE Capital) for the establishment of Xerox Capital Services (XCS), a joint venture between Xerox and GE Capital, which is expected to close and become operational on May 1, 2002. XCS will be a consolidated entity and will provide Xerox's customer administration and leasing activities in the U.S., including various financing programs, credit approval, order processing, billing and collections. - In April 2002, we signed an agreement with GE Capital to extend the U.S. finance receivable monetization arrangement, which will provide Xerox with additional funding while the two companies finalize their arrangement for GE Capital to become the primary provider of equipment financing for Xerox customers in the U.S. The additional funding is expected to be approximately $1 billion this year, secured by portions of Xerox's current and future lease receivables in the U.S. - In first quarter 2002 we received $510 million, net of escrow and fees, of financing from GE Capital, secured by portions of Xerox's lease receivables in the U.S. and Canada. - In February 2002, we activated the previously announced joint venture with De Lage Landen (DLL) to manage equipment financing, billing and collections for the financing of Xerox equipment in the Netherlands. DLL owns 51 percent of the joint venture and provides the funding to support all new customer leases. Xerox owns the remaining 49 percent. - In March 2002, Banco Itau, S.A agreed to become the primary provider of equipment financing for Xerox customers in Brazil. They began providing the equipment financing for new activations in April 2002. - In March 2002, CIT Group affiliates in Mexico agreed to become the primary provider of equipment financing for Xerox customers in Mexico. They began providing the equipment financing for new activations in April 2002. - On April 2, 2002, we sold our equipment financing operations in Italy for $227 million, including the assumption of $20 million of third party debt. In addition to purchasing our existing lease portfolio in Italy, our financing partner will also provide ongoing, exclusive equipment financing for new activations. As discussed above, the financial information included in the following discussion will change upon completion of the restatement: - In April 2002, we signed an agreement with GE Capital Vendor Financial Services (GE Capital) for the establishment of Xerox Capital Services (XCS), a joint venture between Xerox and GE Capital, which is expected to close and become operational on May 1, 2002. XCS will be a consolidated entity and will provide Xerox's customer administration and leasing activities in the U.S., including various financing programs, credit approval, order processing, billing and collections. - In April 2002, we signed an agreement with GE Capital to extend the U.S. finance receivable monetization arrangement, which will provide Xerox with additional funding while the two companies finalize their arrangement for GE Capital to become the primary provider of equipment financing for Xerox customers in the U.S. The additional funding is expected to be approximately $1 billion this year, secured by portions of Xerox's current and future lease receivables in the U.S. - In first quarter 2002 we received $510 million, net of escrow and fees, of financing from GE Capital, secured by portions of Xerox's lease receivables in the U.S. and Canada. - In February 2002, we activated the previously announced joint venture with De Lage Landen (DLL) to manage equipment financing, billing and collections for the financing of Xerox equipment in the Netherlands. DLL owns 51 percent of the joint venture and provides the funding to support all new customer leases. Xerox owns the remaining 49 percent. - In March 2002, Banco Itau, S.A agreed to become the primary provider of equipment financing for Xerox customers in Brazil. They began providing the equipment financing for new activations in April 2002. - In March 2002, CIT Group affiliates in Mexico agreed to become the primary provider of equipment financing for Xerox customers in Mexico. They began providing the equipment financing for new activations in April 2002. - On April 2, 2002, we sold our equipment financing operations in Italy for $227 million, including the assumption of $20 million of third party debt. In addition to purchasing our existing lease portfolio in Italy, our financing partner will also provide ongoing, exclusive equipment financing for new activations. - In April 2002, we signed an agreement with GE Capital Vendor Financial Services (GE Capital) for the establishment of Xerox Capital Services (XCS), a joint venture between Xerox and GE Capital, which is expected to close and become operational on May 1, 2002. XCS will be a consolidated entity and will provide Xerox's customer administration and leasing activities in the U.S., including various financing programs, credit approval, order processing, billing and collections. - In April 2002, we signed an agreement with GE Capital to extend the U.S. finance receivable monetization arrangement, which will provide Xerox with additional funding while the two companies finalize their arrangement for GE Capital to become the primary provider of equipment financing for Xerox customers in the U.S. The additional funding is expected to be approximately $1 billion this year, secured by portions of Xerox's current and future lease receivables in the U.S. - In first quarter 2002 we received $510 million, net of escrow and fees, of financing from GE Capital, secured by portions of Xerox's lease receivables in the U.S. and Canada. - In February 2002, we activated the previously announced joint venture with De Lage Landen (DLL) to manage equipment financing, billing and collections for the financing of Xerox equipment in the Netherlands. DLL owns 51 percent of the joint venture and provides the funding to support all new customer leases. Xerox owns the remaining 49 percent. - In March 2002, Banco Itau, S.A agreed to become the primary provider of equipment financing for Xerox customers in Brazil. They began providing the equipment financing for new activations in April 2002. - In March 2002, CIT Group affiliates in Mexico agreed to become the primary provider of equipment financing for Xerox customers in Mexico. They began providing the equipment financing for new activations in April 2002. - On April 2, 2002, we sold our equipment financing operations in Italy for $227 million, including the assumption of $20 million of third party debt. In addition to purchasing our existing lease portfolio in Italy, our financing partner will also provide ongoing, exclusive equipment financing for new activations. Recent Events Adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142 In the 2002 first quarter, we adopted SFAS 142. As a result, we reclassified approximately $60 million of previously identified intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. to goodwill. We will no longer record approximately $60 million of annual amortization expense relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our existing goodwill, as adjusted, for the reclassifications previously mentioned. Additionally, approximately $5 million of annual amortization expense of goodwill related to equity method investments will no longer be recorded. SEC Settlement On April 11, 2002 we concluded our settlement with the SEC on the previously disclosed matters that have been under investigation since June 2000. As a result, the Commission filed a complaint and a consent order in federal district court for injunctive relief injunctive relief n. a court-ordered act or prohibition against an act or condition which has been requested, and sometimes granted, in a petition to the court for an injunction. and a civil penalty of $10 million. Xerox neither admits nor denies the allegations of the complaint. Under the terms of the settlement, we will restate our financial statements for the years 1997 through 2000 as well as adjust previously announced 2001 results. The restatement will primarily reflect adjustments in the timing and allocation of lease revenue, which will be reallocated among equipment, service, supplies and finance revenue streams as appropriate by applying a methodology different than the one the company had used during those years. The resulting timing and allocation adjustments cannot be estimated until the restatement process has been completed. In any event, there will be no impact on the cash that has been received or is contractually due to be received from these leases. Furthermore, the monetary value of the leases does not change. The restatement will also include adjustments that could be in excess of $300 million due to the establishment and release of certain reserves prior to 2001 and the timing of recognition of interest income on tax refunds. As part of the settlement, and to allow for the additional time required to prepare the restatement and to make these adjustments, the SEC issued an Order permitting us an extension until June 30, 2002 for the filing of the Xerox Corporation and Xerox Credit Corporation 2001 Forms 10-K and first quarter 2002 Forms 10-Q. The Order provides that a filing made on or before June 30, 2002 will be deemed to have been filed on the prescribed due date. We have also agreed that a special committee of our Board of Directors will retain an independent consultant to review our material accounting controls and policies. The Board will share the outcome of this review with the SEC. Vendor Financing Vendor Financing The lending of money by a company to one of its customers so that the customer can buy products from it. By doing this, the company increases its sales even though it is basically buying its own products. Progress Substantial progress in transitioning equipment financing to third party vendors has been made in 2002. Our 2002 progress includes: - In April 2002, we signed an agreement with GE Capital Vendor Financial Services (GE Capital) for the establishment of Xerox Capital Services (XCS), a joint venture between Xerox and GE Capital, which is expected to close and become operational on May 1, 2002. XCS will be a consolidated entity and will provide Xerox's customer administration and leasing activities in the U.S., including various financing programs, credit approval, order processing, billing and collections. - In April 2002, we signed an agreement with GE Capital to extend the U.S. finance receivable monetization arrangement, which will provide Xerox with additional funding while the two companies finalize their arrangement for GE Capital to become the primary provider of equipment financing for Xerox customers in the U.S. The additional funding is expected to be approximately $1 billion this year, secured by portions of Xerox's current and future lease receivables in the U.S. - In first quarter 2002 we received $510 million, net of escrow and fees, of financing from GE Capital, secured by portions of Xerox's lease receivables in the U.S. and Canada. - In February 2002, we activated the previously announced joint venture with De Lage Landen (DLL) to manage equipment financing, billing and collections for the financing of Xerox equipment in the Netherlands. DLL owns 51 percent of the joint venture and provides the funding to support all new customer leases. Xerox owns the remaining 49 percent. - In March 2002, Banco Itau, S.A agreed to become the primary provider of equipment financing for Xerox customers in Brazil. They began providing the equipment financing for new activations in April 2002. - In March 2002, CIT Group affiliates in Mexico agreed to become the primary provider of equipment financing for Xerox customers in Mexico. They began providing the equipment financing for new activations in April 2002. - On April 2, 2002, we sold our equipment financing operations in Italy for $227 million, including the assumption of $20 million of third party debt. In addition to purchasing our existing lease portfolio in Italy, our financing partner will also provide ongoing, exclusive equipment financing for new activations. Other In January January: see month. 2002, we completed additional asset sales to transfer Xerox's office product manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. to Flextronics. The companies completed the sale of Xerox's plants in Venray Venray ( (helpinfo)) is a municipality and a town in the southeastern Netherlands. Population centres Castenray, Heide, Leunen, Merselo, Oirlo, Oostrum, Smakt, Venray, Veulen, Vredepeel, Ysselsteyn. , The Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. and Resende There are parishes that have the name Resende: In Brazil
El Segundo is a city in Los Angeles County, California on the Santa Monica Bay, incorporated on January 18, 1917. The population was 16,033 at the 2000 census. and Mitcheldean Mitcheldean is a small town in the east of the Forest of Dean, in the county of Gloucestershire, England. Mitcheldean had been a thriving community for many centuries due to the town's proximity to iron ore deposits. , England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. and our customer replaceable unit plant in Utica, New York
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