Xerox Reports Fourth-Quarter 2015 Earnings

• Delivers GAAP EPS of 27 cents, adjusted EPS of 32 cents and sequential increase in operating margin to 9.2%
• Generates strong cash flow of $878 million in the quarter, $1.6 billion full-year
• Services segment delivers revenue of $2.6 billion and double-digit growth in signings in the quarter
• Document Technology continues to deliver strong operating margin and remains the industry equipment share revenue leader
• Announces annual cash dividend increase of 11% to 31 cents per share
• Announces full-year 2016 guidance of $0.66 to $0.76 in GAAP EPS and $1.10 to $1.20 in adjusted EPS

Xerox (NYSE: XRX) today announced its fourth-quarter financial results, delivering strong earnings and cash flow as a result of a continuous focus on productivity and business model optimization.

The company recorded fourth-quarter 2015 adjusted earnings per share of 32 cents, or GAAP EPS from continuing operations of 27 cents including the amortization of intangibles.

“We delivered solid performance in the fourth quarter, with earnings that were above our expectations, as a result of the progress we are making across both segments in optimizing our operating models,” said Ursula Burns, Xerox chairman and chief executive officer.

“In the face of a challenging environment, our Services segment drove sequential improvement in margin and double-digit year-over-year signings growth. Similarly, Document Technology was the industry equipment sales revenue market share leader for the 24th consecutive quarter and, through our continued focus on performance and productivity, maintained its strong margins.”

“Looking forward, we will continue to take actions that deliver value for shareholders and clients. This is reflected in the plan we announced today to separate into two market leading companies and implement a $2.4 billion strategic transformation program. We will do what is right to position our company for success through a focus on transforming our operations and optimizing our structure,” Burns added.

Fourth Quarter 2015 Results
Revenues were $4.7 billion in the quarter, down 8 percent or 5 percent in constant currency year-over-year. Annuity revenue was 83 percent of total revenue.

Fourth-quarter operating margin of 9.2 percent was down 1.2 percentage points from the same quarter a year ago.

Gross margin was 31.3 percent, and selling, administrative and general expenses were 19.0 percent of revenue.
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