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) ======= ======= ======= ======= =======
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