SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
July 12, 2002
XEROX CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-4471 16-0468020
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
800 Long Ridge Road
P. O. Box 1600
Stamford, Connecticut 06904-1600
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:
(203) 968-3000
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
On April 11, 2002, Registrant reached a settlement with the Securities and
Exchange Commission (SEC) relating to matters that had been under investigation
by the SEC since June 2000. In connection with the settlement, Registrant agreed
to restate its consolidated financial statements as of and for the years ended
December 31, 1997 through 2000 and to undertake a review of its material
internal controls and accounting policies. Registrant also restated its
consolidated financial statements for the first three quarters of 2001. The
restated consolidated financial statements were filed with the SEC in
Registrant's Annual Report on Form 10-K for the Year Ended December 31, 2001
("2001 Form 10-K Report") and Registrant's Quarterly Report on Form 10-Q for the
Quarter Ended March 31, 2002 ("March 2002 Form 10-Q Report").
The restated consolidated financial statements reflect adjustments which are
corrections of errors made in the application of U.S. generally accepted
accounting principles (GAAP) and include (i) adjustments related to the
application of the provisions of Statement of Financial Accounting Standards No.
13 "Accounting for Leases" and (ii) adjustments that arose as a result of other
errors in the application of GAAP. All dollar and per share amounts have been
revised, as appropriate for the effects of such restatement.
This Current Report on Form 8-K provides the complete unaudited consolidated
statements of operations and other selected financial data for each of the
quarters in the year ended December 31, 2001 which is supplemental to the
financial data contained in Registrant's 2001 Form 10-K Report and Registrant's
March 2002 Form 10-Q Report. This Current Report on Form 8-K also supplements
and corrects Registrant's Current Report on Form 8-K dated July 11, 2002, in
which the 2001 quarterly data shown on the line entitled "Other expenses, net"
has been adjusted to the amounts shown below.
FOUR QUARTERS IN REVIEW
Consolidated Statements of Operations and Other Selected Financial Data
(Unaudited)
In millions, except per-share data
2001
First Second Third Fourth Full
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- ----
Restated Restated Restated
Consolidated Statements of Operations:
Sales $ 1,858 $ 1,858 $ 1,708 $ 2,012 $ 7,443
Service, outsourcing and rentals 2,134 2,139 2,071 2,092 8,436
Finance income 292 286 273 278 1,129
------- ------- ------- ------- -------
Total Revenues 4,291 4,283 4,052 4,382 17,008
Cost of sales (1) 1,377 1,301 1,239 1,253 5,170
Cost of service, outsourcing and rentals 1,292 1,183 1,183 1,222 4,880
Equipment financing interest (2) 130 125 107 95 457
Research and development expenses 251 257 257 232 997
Selling, administrative and general expenses (3) 1,149 1,220 1,175 1,184 4,728
Restructuring and asset impairment charges 129 295 63 228 715
Gain on sale of half of interest in Fuji Xerox (769) -- -- (4) (773)
Gain on affiliate's sale of stock -- -- -- (4) (4)
Other expense, net 86 174 126 87 473
------- ------- ------- ------- -------
Total Costs and Expenses (1) 3,645 4,555 4,150 4,293 16,643
Income (Loss) before income taxes (benefits),
equity income, minorities' interests,
extraordinary gain and cumulative
effect of change in accounting principle 646 (272) (98) 89 365
Income taxes (benefits) 430 (132) (74) 261 485
------- ------- ------- ------- -------
Income (Loss) before equity income,
minorities' interests, extraordinary gain
and cumulative effect of change in
accounting principle 216 (140) (24) (172) (120)
Equity in net income of unconsolidated affiliates 3 31 -- 19 53
Minorities' interest in earnings of subsidiaries (7) (10) (9) (16) (42)
------- ------- ------- ------- -------
Income (Loss) before extraordinary gain and
cumulative effect of
change in accounting principle 212 (119) (33) (169) (109)
Extraordinary gain on extinguishment of debt, net of taxes 17 18 1 4 40
Cumulative effect of change in accounting principle (2) -- -- -- (2)
------- ------- ------- ------- -------
Net Income (Loss) $ 227 $ (101) $ (32) $ (165) $ (71)
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2001
First Second Third Fourth Full
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- ----
Restated Restated Restated
Other Selected Financial Data:
Details of other expenses, net:
Non-financing interest expense (2) $ 155 $ 141 $ 48 $ 102 $ 446
Currency (gains) losses, net (64) 13 59 (37) (29)
Amortization of goodwill and intangibles 23 22 21 28 94
Asset sale losses, net 2 4 2 2 10
Interest income (24) (23) (24) (30) (101)
All other, net (6) 17 20 22 53
------- ------- ------- ------- -------
Total other expenses, net $ 86 $ 174 $ 126 $ 87 $ 473
======= ======= ======= ======= =======
Common Shares Outstanding (in millions):
Average common shares outstanding during the
period for basic (loss) earnings per share 680 701 718 722 704
Average common shares outstanding during the
period for diluted (loss) earnings per share 782 701 718 722 704
Earnings (Loss) per Share:
Basic earnings (loss) per share $ 0.32 $ (0.14) $ (0.05) $ (0.23) $ (0.12)
Diluted earnings (loss) per share $ 0.29 $ (0.14) $ (0.05) $ (0.23) $ (0.12)
Other data:
Restructuring and asset impairment
charges (after taxes) $ 81 $ 222 $ 47 $ 157 $ 507
Gain on sale of half of interest in Fuji
Xerox (after taxes) (300) -- -- (4) (304)
Currency (gains) losses, net (after taxes) (44) 10 38 (25) (21)
Accrued dividends on ESOP preferred stock(4) (12) -- -- -- (12)
(1) The first through fourth quarters include inventory charges of $0,
$24, $5 and $13, respectively associated with restructuring actions.
These are in addition to all other inventory charges occurring in the
applicable period.
(2) Third quarter 2001 interest expense includes a net gain of $46 from
the mark-to-market valuation of interest rate swaps required to be
recorded as a result of applying Statement of Financial Accounting
Standard No. 133 "Derivatives and Hedging" (SFAS No. 133) accounting
rules. Similarly, fourth quarter 2001 interest expense reflects a net
loss of $17 from the mark-to-market valuation of interest rate swaps
in accordance with SFAS No. 133 accounting rules. The overall decline
in interest expense beginning in the third quarter 2001 primarily
reflects lower interest rates as compared to prior periods.
(3) The first through fourth quarters include bad debt expense of $84,
$93, $151 and $110, respectively.
(4) Accrued dividends on ESOP preferred stock are deducted from net income
(loss) in determining net income (loss) available to common
shareholders which is used in the earnings per share calculation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly authorized this report to be signed on its behalf by the undersigned
duly authorized.
XEROX CORPORATION
/s/ GARY R. KABURECK
--------------------
By: GARY R. KABURECK
Assistant Controller and
Chief Accounting Officer
Date: July 12, 2002