Xerox Holdings Corp
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
XRX$1.08-2.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-01.
0001770450-24-000031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCapital Resources and LiquidityFinancial Risk ManagementNon-GAAP Financial MeasuresCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001770450-24-000042
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCapital Resources and LiquidityFinancial Risk ManagementNon-GAAP Financial MeasuresThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 257 previous paragraphs and 298 current paragraphs.
140 unchanged; 88 reworded; 59 added; 24 removed; 5 previous and 11 current paragraphs rearranged.
Tables are not compared: 18 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (59)
Current report
In the second quarter of 2024, Xerox progressed in the design, planning and implementation of structural changes that will drive the Company's multi-year Reinvention strategy. The intended benefits of the new operating model implemented in the first quarter 2024 are materializing in financial results. In second quarter 2024, adjusted 1 operating income margin, cash flow and revenue trajectory all improved sequentially. These improvements, and ongoing enhancements to management processes, further our confidence that we have the right strategy in place to deliver our targeted $300 million of improvement in adjusted 1 operating income by the end of 2026.
Current report
Pre-tax income of $25 million for the second quarter 2024 increased by $114 million as compared to a pre-tax (loss) of $(89) million in the second quarter 2023, and was primarily driven by the net pre-tax charge of $132 million related to the donation of our Palo Alto Research Center (PARC), in the prior year period. The increase also reflects lower Selling, administrative and general expenses, due to actions taken to improve our cost structure, and lower Restructuring and related costs, net. These benefits were partially offset by lower revenues and associated gross
Current report
2024 Review
Current report
Total revenue of $1.58 billion for second quarter 2024 decreased 10.0% from second quarter 2023, which included a 0.4-percentage point unfavorable impact from currency. Total revenue of $3.08 billion for the six months ended June 30, 2024 decreased 11.2% as compared to the prior year period, including a 0.2-percentage point benefit from currency.
Current report
Second quarter 2024 Net income was $18 million as compared to the second quarter 2023 Net (loss) of $(61) million. The increase in Net income of $79 million primarily reflects the net after-tax PARC donation charge of $92 million ($132 million pre-tax) in the prior year period, as well as lower Selling, administrative and general expenses, Restructuring and related costs, net, and Research, development and engineering expenses (RD&E). These positive impacts were partially offset by lower revenue and gross profit, which includes the exit of certain production print manufacturing operations, as well as, higher Other expenses, net, which included the impacts of higher non-service retirement-related costs and insurance proceeds related to a legal settlement, and higher Income tax expense. Second quarter 2024 Adjusted 1 Net income of $41 million decreased $31 million as compared to the prior year period, primarily reflecting lower revenue and gross profit, as well as higher Other expenses, net. These negative impacts were partially offset by lower Selling, administrative and general expenses, RD&E, and Income tax expense.
Current report
Due primarily to incremental reductions in revenue associated with geographic simplification and the decision to exit the manufacturing of certain Production equipment, we are lowering our full-year revenue guidance from a decline of 3% to 5% in constant currency 1 to a decline of 5% to 6% in constant currency 1. Core business revenue in 2024 is expected to be roughly flat year-over-year in constant currency 1 consistent with our prior outlook, reflecting growing demand for our products and services in the second half of the year. As a result of lower expected revenues, and to a lesser extent rising freight and product costs, we are lowering adjusted 1 operating income margin guidance from at least 7.5% to at least 6.5%. Operating cash flows is now expected to be at least $600 million in 2024 versus prior guidance of at least $650 million. The reduction in operating cash flows is in-line with the after-tax reduction in adjusted 1 operating income expectations. We continue to expect capital expenditures to be approximately $50 million.
Current report
Post sale revenue decreased 8.4% as compared to second quarter 2023, which included a 0.5-percentage point adverse impact from currency, while Post sale revenue decreased 8.4% for the six months ended June 30, 2024 as compared to the prior year period, including a 0.2-percentage point benefit from currency. Post sale revenue reflected the following:
Current report
Equipment sales revenue decreased 15.2% as compared to second quarter 2023, including a 0.3-percentage point adverse impact from currency. The decrease in both actual and constant currency 1 reflects backlog fluctuations in the current and prior year quarters, as well as effects of non-strategic reductions in revenue, including offering and geographic simplification. Revenue declined across all product groups, and was most pronounced in Mid-range, driven by declines in A3 color multi-function printers.
Current report
Second quarter 2024 gross margin of 33.0% decreased by 1.0-percentage points as compared to second quarter 2023, primarily reflecting lower revenue and gross profit, higher transportation and product costs, and the exit of certain production print manufacturing operations. These impacts were partially offset by favorable currency and the benefits associated with recent cost and productivity actions.
Current report
Equipment gross margin for the six months ended June 30, 2024 of 32.9% decreased by 2.9-percentage points as compared to the prior year period, reflecting lower revenue and gross profit, the exit of certain production print manufacturing operations, and higher product and transportation costs. These impacts were partially offset by favorable currency.
Current report
Second quarter 2024 Post sale gross margin of 32.5% decreased by 1.1-percentage points as compared to second quarter 2023, reflecting lower revenue and gross profit, including lower page volumes, charges associated with the Company's Reinvention, primarily related to the exit of certain production print manufacturing operations, and higher transportation and product costs. These impacts were partially offset by the benefits associated with recent cost and productivity actions and favorable currency.
Current report
Second quarter 2024 RD&E as a percentage of revenue of 3.2% was flat as compared to second quarter 2023, primarily due to lower RD&E and revenues.
Current report
Second quarter 2024 SAG of $393 million decreased by $40 million as compared to second quarter 2023, primarily reflecting productivity and cost savings related to the Company's Reinvention, lower bad debt and incentive compensation expenses, as well as favorable currency.
Current report
SAG as a percentage of revenue for the six months ended June 30, 2024 of 25.6% increased by 1.4-percentage points as compared to the prior year period, primarily due to lower revenues, as well as higher bad debt expense, which were partially offset by lower selling and other administrative and general expenses.
Current report
The bad debt provision for the second quarter 2024 of $10 million decreased $5 million as compared to the second quarter 2023, primarily related to lower sales revenue.
Current report
Transaction and related costs, net
Current report
Transaction and related costs, net primarily reflect costs from third party providers for professional services associated with certain major and strategic M&A projects. Second quarter 2024 Transaction and related costs, net reflect insurance proceeds related to a legal settlement, for the reimbursement of certain legal and other professional costs, associated with the terminated proposal to acquire HP Inc. in early 2020.
Current report
The loss on early extinguishment of debt of $3 million for the three and six months ended June 30, 2023 related to the early repayment on secured borrowings and the termination of our $250 million Credit Facility prior to entering into our 5-year Asset Based Lending (ABL) Facility.
Current report
Pre-tax Income (Loss) Margin
Current report
Second quarter 2024 pre-tax income margin of 1.6% increased 6.7-percentage points, as compared to second quarter 2023 pre-tax (loss) margin of (5.1)%. The increase was primarily due to the PARC donation charge in the prior year period, which resulted in a 7.6-percentage point favorable impact when compared to second quarter 2024. The increase also reflects lower Selling, administrative and general expenses and Restructuring and related costs, net, as well as insurance proceeds related to a legal settlement, which resulted in a 1.5-percentage point favorable impact. These impacts were partially offset by lower revenues and associated gross profits, which included higher transportation and product costs.
Current report
Second quarter 2024 adjusted 1 operating income margin of 5.4% decreased by 0.7-percentage points as compared to second quarter 2023, primarily reflecting lower revenue and lower gross margin, which included higher product and transportation costs. These impacts were partially offset by the benefits from cost and productivity actions, lower Selling, administrative and general expenses, including lower bad debt and incentive compensation expenses, as well as, the benefits from the strategic decision to donate PARC, and the spin-off, exit, or shutdown of certain other RD&E related activities or businesses, as well as a corresponding reduction in real estate. Currency also positively impacted adjusted 1 operating income margin.
Current report
Second quarter 2023 effective tax rate was a 31.5% tax benefit and includes the loss on the PARC donation as well as the associated tax benefits. Excluding this impact, the effective tax rate was a 27.9% tax expense, which is higher than the U.S. federal statutory tax rate of 21%, primarily due to the tax impacts associated with restructuring and asset impairment charges and the geographical mix of earnings. On an adjusted 1 basis, second quarter 2023 effective tax rate was 20.0%, which is lower than the U.S. federal statutory tax rate of 21% primarily due to tax benefits from the change in tax filing positions and the redetermination of certain unrecognized tax positions of approximately 10%, which were offset by the geographical mix of earnings.
Current report
The effective tax rate for the six months ended June 30, 2023 was a 350.0% tax benefit and includes the loss on the PARC donation as well as the associated tax benefits. Excluding this impact, the effective tax rate was a 20.3% tax expense, which is lower than the U.S. federal statutory tax rate of 21% primarily due to the tax benefits from the redetermination of certain unrecognized tax positions and the change in the tax filing positions predominately offset by the tax impacts associated with restructuring and asset impairment charges and the geographical mix of earnings. On an adjusted 1 basis, the effective tax rate for the six months ended June 30, 2023 was 17.6%. The adjusted 1 effective tax rate was lower than the U.S. federal statutory tax rate of 21% primarily due to tax benefits from the redetermination of certain unrecognized tax positions and the change in tax filing positions, partially offset by the geographical mix of earnings.
Current report
Net Income (Loss)
Current report
Second quarter 2024 Net Income was $18 million, or $0.11 per diluted share. On an adjusted 1 basis, Net Income was $41 million, or $0.29 per diluted share.
Current report
Second quarter 2023 Net (Loss) was $(61) million, or $(0.41) per diluted share, which included the net after-tax PARC donation charge of $92 million ($132 million pre-tax), or $0.58 per diluted share. On an adjusted 1 basis, Net Income was $72 million, or $0.44 per diluted share.
Current report
Net (Loss) for the six months ended June 30, 2024 was $(95) million, or $(0.83) per diluted share. On an adjusted 1 basis, Net Income was $52 million, or $0.35 per diluted share.
Current report
Net Income for the six months ended June 30, 2023 was $10 million, or $0.02 per diluted share, which included the net after-tax PARC donation charge of $92 million ($132 million pre-tax), or $0.58 per diluted share. On an adjusted 1 basis, Net Income was $154 million, or $0.93 per diluted share.
Current report
Other Comprehensive (Loss) Income
Current report
Equipment sales revenue decreased 15.2% during the second quarter 2024 as compared to second quarter 2023, while Equipment sales revenue decreased 20.4% for the six months ended June 30, 2024 as compared to the prior year period. The respective decrease as compared to the prior year periods reflects the effects of backlog fluctuations in the current and prior year, along with non-strategic reductions in revenue, including offering and geographic simplification. Revenue declined across all product groups, and was most pronounced in Mid-range, driven by declines in A3 color multi-function printers.
Current report
Entry
Current report
•28% decrease in entry black-and-white installs, with Entry Mono printers driving the decline.
Current report
Mid-Range
Current report
High-End
Current report
Print and Other segment margin of 3.9% for the six months ended June 30, 2024 decreased 2.4-percentage points as compared to the prior year period. The decrease is primarily due to lower revenue, higher transportation and product costs, and higher bad debts expense. These adverse impacts were partially offset by lower Selling and other administrative and general expenses, lower RD&E expense, and the benefits of cost and productivity savings.
Current report
XFS segment margin of 2.2% for the six months ended June 30, 2024 decreased 6.7-percentage points as compared to the prior year period. Segment profit for XFS was $14 million lower as compared to the prior year period mainly due to lower revenue from reduced assets and higher bad debt expense of $16 million as compared to the prior year period. These adverse impacts were partially offset by modestly higher gross profit from fees and lower intercompany commissions.
Current report
•In June 2024 we amended our ABL facility dated as of May 22, 2023, to (i) increase the commitments of the lenders under the ABL Credit Agreement from $300 to $425 and (ii) amend the excess availability used to trigger the fixed charge coverage ratio springing covenant from an amount equal to the greater of (A) $22.5 and (B) 10% of the Line Cap (the lesser of the aggregate amount of Revolving Commitments and the then-applicable Borrowing Base), to an amount equal to the greater of (A) $31.875 and (B) 10% of the Line Cap. Refer to Note 13 - Debt in the Condensed Consolidated Financial Statements for additional information regarding debt activity.
Current report
•$31 million decrease from higher net tax payments.
Current report
•$26 million decrease from higher pension contributions.
Current report
•$89 million increase from other current and long-term liabilities due to timing of payments.
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Removed paragraphs (24)
Previous report
In the first quarter of 2024, Xerox implemented a comprehensive organizational redesign, marking an important milestone in the Company's multi-year journey to build a stronger, more stable business that is operationally efficient and responsive to the evolving workplace needs of our clients. During the quarter, we took initial actions to unlock savings associated with simplified product offerings and global routes to market, including the decision to exit certain production print manufacturing operations and sell, or agree to sell, direct operations in four Latin American countries.
Previous report
The pre-tax (loss) was $(150) million for the first quarter 2024, as compared to pre-tax income of $85 million in the first quarter 2023. The pre-tax (loss) in 2024 primarily reflected lower revenues and associated gross profit, a loss related to the divestitures of certain direct business operations in Latin America, higher Restructuring and related costs, net and Other expenses, net, partially offset by lower Research, development and engineering expenses as well as lower Selling, administrative and general expenses, reflecting structural actions to improve our cost
Previous report
First Quarter 2024 Review
Previous report
Total revenue of $1.50 billion for first quarter 2024 decreased 12.4% from first quarter 2023, which included a 0.8-percentage point benefit from currency.
Previous report
First quarter 2024 Adjusted 1 Net income of $11 million decreased $71 million as compared to the prior year period, primarily reflecting lower revenue and gross profit. These negative impacts were partially offset by higher Income tax benefits, as well as lower RD&E and lower Selling, administrative and general expenses.
Previous report
Xerox 2024 Form 10-Q 43
Previous report
We continue to expect a total Revenue decline of 3% to 5% in constant currency 1 in 2024, which includes effects of prior year backlog 2 reductions and the exit of non-strategic businesses. Core business revenue is expected to be roughly flat year-over-year, reflecting stable Print demand, growth in Digital and IT Services and neutral macroeconomic conditions. In addition, we expect pre-tax income and adjusted 1 operating income margins to improve in 2024, primarily driven by structural simplification actions enabled by our reorganization, including the effects of the workforce reduction decisions announced in January 2024. We continue to expect Operating cash flows to be at least $650 million, which is expected to benefit from a reduction in our finance receivables balance, partially offset by approximately $50 million of higher contributions to our pension plans. Capital expenditures are expected to be approximately $50 million.
Previous report
(1)Xerox Financial Services (XFS) (formerly FITTLE).
Previous report
(2)Reflects revenue, primarily commissions and other payments, made by the XFS segment to the Print and Other segment for the lease of Xerox equipment placements.
Previous report
Post sale revenue decreased 8.5% as compared to first quarter 2023, which included a 0.8-percentage point benefit from currency. Post sale revenue reflected the following:
Previous report
(3)Order backlog is measured as the value of unfulfilled sales orders, shipped and non-shipped, received from our customers waiting to be installed, including orders with future installation dates. It includes printing devices as well as IT hardware associated with our IT services offerings.
Previous report
Gains on early extinguishment of debt
Previous report
Pre-tax (Loss) Income Margin
Previous report
First quarter 2023 effective tax rate was 16.5%. On an adjusted 1 basis, first quarter 2023 effective tax rate was 15.5%. The difference between these rates and the U.S. federal statutory tax rate of 21% primarily reflects the benefits from the redetermination of certain unrecognized tax positions of approximately 10% partially offset by the geographical mix of earnings.
Previous report
Net (Loss) Income
Previous report
First quarter 2024 Net (Loss) was $(113) million, or $(0.94) per diluted share. On an adjusted 1 basis, Net Income was $11 million, or $0.06 per diluted share.
Previous report
First quarter 2023 Net Income was $71 million, or $0.43 per diluted share. On an adjusted 1 basis, Net Income was $82 million, or $0.49 per diluted share.
Previous report
Other Comprehensive Income
Previous report
Equipment sales revenue decreased 26.0% during the first quarter 2024 as compared to first quarter 2023, reflecting higher backlog reductions in the prior year quarter. Backlog 1 declined sequentially by approximately $2 million in the first quarter 2024 as compared to approximately $70 million in the first quarter 2023. Revenue declined across all product groups.
Previous report
(1)Order backlog is measured as the value of unfulfilled sales orders, shipped and non-shipped, received from our customers waiting to be installed, including orders with future installation dates. It includes printing devices as well as IT hardware associated with our IT services offerings.
Previous report
•$58 million decrease from accounts receivable primarily due to the timing of collections.
Previous report
•$50 million increase from finance receivables primarily due to a higher level of run-off as a result of lower originations, partially offset by lower sales of finance receivables under the finance receivables funding agreement. Refer to Note 8 – Finance Receivables, Net in the Consolidated Financial Statements for additional information regarding the sale of finance receivables.
Reworded paragraphs (88)
Previous wording
Xerox Holdings' other direct subsidiary is Xerox Ventures LLC, which was established solely to invest in startups and early/mid-stage growth companies aligned with the Company’s innovation focus areas and targeted adjacencies. In January 2024, Myriad Ventures Fund I LP (Myriad) was established, and the investments held by Xerox Ventures, LLC were transferred to Myriad, which will continue to be fully consolidated by Xerox Holdings. At March 31, 2024 and December 31, 2023, Xerox Ventures LLC had investments in Myriad of approximately $27 million and $26 million, respectively. Due to its immaterial nature, and for ease of discussion, Xerox Ventures LLC's results are included within the following discussion.
Current wording
Xerox Holdings' other direct subsidiary is Xerox Ventures LLC, which was established solely to invest in startups and early/mid-stage growth companies aligned with the Company’s innovation focus areas and targeted adjacencies. At December 31, 2023 Xerox Ventures, LLC held investments of $26 million. In January 2024, Myriad Ventures Fund I LP (Myriad) was established, and the investments held by Xerox Ventures, LLC were transferred to Myriad, which will continue to be fully consolidated by Xerox Holdings. At June 30, 2024 Myriad had investments of approximately $34 million. Due to its immaterial nature, and for ease of discussion, Xerox Ventures LLC's results are included within the following discussion.
Previous wording
Equipment sales of $290 million in the first quarter 2024 declined 25.8% in actual currency, or 26.3% in constant currency 1, as compared to the first quarter 2023. The prior year effect of backlog 2 reduction and geographic simplification drove a 16-percentage point year-over-year decline. Total equipment revenue outpaced equipment installation activity, due to favorable product mix. Installations declined across all product groups primarily due to prior year backlog 2 reductions. Post-sale revenue of $1.2 billion declined 8.5% in actual currency, or 9.3% in constant currency 1, as compared to first quarter 2023. The decline was primarily due to reductions in non-strategic, lower margin paper and IT endpoint device placements, as well as the effects of geographic simplification, the termination of the Fuji Royalty and the absence of PARC revenue. Excluding these effects, post sale revenue decreased low-single digits in actual currency.
Current wording
Equipment sales of $356 million in the second quarter 2024 declined 15.2% in actual currency, or 14.9% in constant currency 1, as compared to the second quarter 2023. The prior year effect of backlog 2 reduction and geographic simplification drove an approximate 14-percentage point year-over-year decline. Total equipment revenue declines outpaced equipment installation activity, due to unfavorable product mix. Revenue declined across all product groups, primarily due to the effects of backlog 2 fluctuations in the current and prior year. Post-sale revenue of $1.2 billion declined 8.4% in actual currency, or 7.9% in constant currency 1, as compared to second quarter 2023. The decline was primarily due to lower outsourcing and service revenue, reductions in non-strategic, lower margin IT endpoint device placements and paper sales, as well as the effects of geographic simplification. Excluding non-strategic effects, post sale revenue declined mid-single digits.
Previous wording
Xerox 2024 Form 10-Q 42 structure. Adjusted 1 operating income decreased $85 million as compared to first quarter 2023 due to lower equipment and post sale revenue, including the termination of Fuji royalty income and PARC revenue, lower gross profit and higher bad debt expense, which primarily related to a reserve release in the prior year period. These impacts were partially offset by the cost savings associated with structural simplification efforts.
Current wording
Xerox 2024 Form 10-Q 44 profit. Adjusted 1 operating income decreased $22 million as compared to second quarter 2023, due to lower equipment and post sale revenue, and associated gross profits. These impacts were partially offset by benefits from cost reduction actions associated with structural simplification efforts and lower bad debt expense.
Previous wording
Net (loss) income and adjusted 1 Net income were as follows:
Current wording
Net income (loss) and adjusted 1 Net income were as follows:
Previous wording
First quarter 2024 Net (loss) was $(113) million as compared to the first quarter 2023 Net income of $71 million. The decrease in Net income is primarily due to lower revenue and gross profit, as well as the divestitures of certain direct business operations in Latin America, the exit of certain production print manufacturing operations, higher Restructuring and related costs, net, and higher Other expenses, net, which included the impact of higher non-service retirement-related costs. These negative impacts were partially offset by higher Income tax benefits, as well as lower Research, development and engineering expenses (RD&E) and lower Selling, administrative and general expenses.
Current wording
Net (loss) for the six months ended June 30, 2024 was $(95) million as compared to the prior year period Net income of $10 million, which reflects the net after-tax PARC donation charge of $92 million ($132 million pre-tax). The decrease in Net income reflects lower revenue and gross profit, as well as the loss from divestitures of certain direct business operations in Latin America, the exit of certain production print manufacturing operations, higher Restructuring and related costs, net, and higher Other expenses, net, which included the impacts of higher non-service retirement-related costs as well as insurance proceeds related to a legal settlement. These negative impacts were partially offset by lower Selling, administrative and general expenses and lower RD&E, as well as higher Income tax benefits. Adjusted 1 Net income for the six months ended June 30, 2024 of $52 million decreased $102 million as compared to the prior year period, primarily reflecting lower revenue and gross profit, as well as higher Other expenses, net. These negative impacts were partially offset by lower Selling, administrative and general expenses, lower RD&E, and lower Income tax expense.
Previous wording
The following is a summary of our segments -Print and Other and Xerox Financial Services (XFS) (formerly FITTLE):
Current wording
The following is a summary of our segments -Print and Other and Xerox Financial Services (XFS):
Previous wording
Cash flows from operating activities during the three months ended March 31, 2024 was a use of $79 million and decreased $157 million as compared to the prior year period, primarily related to lower net income as well as an increased use of cash for working capital 1, and higher payments for accrued compensation in the prior year, partially offset by proceeds of approximately $185 million from the on-going sales of finance receivables under the finance receivables funding agreement, as well as lower finance receivable originations.
Current wording
Cash flows from operating activities during the six months ended June 30, 2024 was a source of $44 million and decreased $129 million as compared to the prior year period, primarily related to lower net income as well as higher payments for accrued compensation and restructuring, partially offset by net proceeds of approximately $377 million from the on-going sales of finance receivables under the finance receivables funding agreement, as well as lower finance receivable originations, and improvements in cash for working capital 1.
Previous wording
Cash used in investing activities during the three months ended March 31, 2024 was $17 million, reflecting capital expenditures of $10 million and $11 million related to the impact of the deconsolidation of an entity that is now accounted for using the equity method of accounting, both of which were partially offset by net cash proceeds of approximately $3 million from the sales of our business operations in Argentina and Chile.
Current wording
Cash used in investing activities during the six months ended June 30, 2024 was $19 million, reflecting capital expenditures of $18 million, $11 million related to the impact of the deconsolidation of an entity that is now accounted for using the equity method of accounting, and $9 million for investments in noncontrolling interests, all of which was partially offset by net cash proceeds of approximately $11 million from the sale of assets, and $7 million from the sales of our business operations in Argentina and Chile.
Previous wording
Cash provided by financing activities during the three months ended March 31, 2024 was $261 million primarily reflecting net debt proceeds of $335 million. Net debt proceeds include proceeds from the issuance of Senior Notes during first quarter 2024 of approximately $900 million which were partially offset by related debt issuance costs of approximately $15 million, as well as the early partial repayment, via tender offer, of approximately $445 million on Senior Notes due in 2024 and 2025, and approximately $103 million on secured financing arrangements. The net proceeds were partially offset by dividend payments of $37 million and purchases of capped calls for $23 million in connection with the issuance of Convertible Senior Notes.
Current wording
Cash used in financing activities during the six months ended June 30, 2024 was $75 million reflecting net payments of approximately $658 million on Senior Notes due in 2024 and 2025, $178 million on secured financing arrangements, $15 million for debt issuance costs, and $14 million on the Term Loan B facility. Partially offsetting payments on debt were proceeds from the issuance of Senior Notes during first quarter 2024 of approximately $900 million. Dividend payments were $71 million and purchases of capped calls were $23 million in connection with the issuance of Convertible Senior Notes.
Previous wording
(3)Refer to Note 4 - Segment Reporting in the Condensed Consolidated Financial Statements for additional information regarding our reportable segments.
Current wording
(2)Refer to Note 4 - Segment Reporting in the Condensed Consolidated Financial Statements for additional information regarding our reportable segments.
Previous wording
First quarter 2024 total revenue decreased 12.4% as compared to first quarter 2023, and included a 0.8-percentage point benefit from currency. The decrease in equipment sales revenue at constant currency 1 was primarily attributable to higher backlog reductions in the prior year quarter, as well as organizational changes implemented during the quarter and constraints in Entry, A4 devices. Post sale revenue decreased at constant currency 1 primarily due to reductions in non-strategic, lower margin paper and IT endpoint device placements, as well as the effects of geographic simplification, the termination of the Fuji Royalty and the absence of PARC revenue. The decline in Contractual print services 2 revenue, driven by lower service revenue, as well as a decline in Finance income, also contributed to the decline in post sale revenue.
Current wording
Second quarter 2024 total revenue decreased 10.0% as compared to second quarter 2023, and included a 0.4-percentage point adverse impact from currency, while total revenue for the six months ended June 30, 2024 decreased 11.2%, and included a 0.2-percentage point benefit from currency. The decrease in equipment sales revenue at constant currency 1 for both the three and six months ended June 30, 2024 was primarily attributable to the effects of backlog fluctuations in the current and prior year quarters, along with non-strategic reductions in revenue, including offering and geographic simplification. The six months ended June 30, 2024 was also impacted by the organizational changes implemented during the first quarter 2024. Post sale revenue decreased at constant currency 1 for both the three and six months ended June 30, 2024 primarily due to the decline in Contractual print services 2 driven by lower service and outsourcing revenue, as well as reductions in non-strategic, lower margin IT endpoint device placements and paper sales, lower Finance income, and the effects of geographic simplification. Post sale revenue for the six months ended June 30, 2024, was also negatively impacted by the termination of Fuji royalty income and PARC revenue.
Previous wording
Total revenue for the three months ended March 31, 2024 reflected the following:
Current wording
Total revenue for the three and six months ended June 30, 2024 reflected the following:
Previous wording
•Services, maintenance and rentals revenue includes maintenance revenue (including bundled supplies), print, digital and managed IT services revenue from our Services offerings, rentals and other revenues. These revenues decreased 6.7% as compared to first quarter 2023, which included a 0.7-percentage point benefit from currency. The decline in constant currency 1 was primarily due to the termination of Fuji royalty income and PARC revenue. Contractual print services 2 revenue declined mid-single digits as compared to first quarter 2023, driven by lower service revenue, which was partially offset by gains, commissions, and servicing revenue on sales of finance receivables.
Current wording
•Services, maintenance and rentals revenue includes maintenance revenue (including bundled supplies), print, digital and managed IT services revenue from our Services offerings, rentals and other revenues. For the three months ended June 30, 2024, these revenues decreased 7.9% as compared to second quarter 2023, which included a 0.6-percentage point adverse impact from currency, while for the six months ended June 30, 2024 these revenues decreased 7.3% as compared to the prior year period, including a 0.1-percentage point benefit from currency. The decline at constant currency 1 for both the three and six months ended June 30, 2024, respectively, was primarily due to Contractual print services 2 declines and the absence of PARC revenue. Contractual print services 2 revenue declined mid-single digits for the three and six months ended June 30, 2024 as compared to the respective prior year periods, driven by lower outsourcing and service revenue and the effects of geographic simplification, which was partially offset by gains, commissions, and servicing revenue on sales of finance receivables. The decline for the six months ended June 30, 2024 was also negatively impacted by the termination of Fuji royalty income.
Previous wording
•Supplies, paper and other sales revenue includes unbundled supplies, IT hardware and other sales. These revenues decreased 13.1% as compared to first quarter 2023, including a 1.0-percentage point benefit from currency, and primarily reflected lower sales of non-strategic, lower margin paper and IT endpoint device placements, as well as the effects of geographic simplification associated with our strategic Reinvention actions.
Current wording
•Supplies, paper and other sales revenue includes unbundled supplies, IT hardware and other sales. For the three months ended June 30, 2024, these revenues decreased 7.6% as compared to second quarter 2023, including a 0.1-percentage point benefit from currency, while for the six months ended June 30, 2024 the revenues decreased 10.3% as compared to the prior year period, including a 0.5-percentage point benefit from currency. The decline at constant currency 1 for both the three and six months ended June 30, 2024, respectively, primarily reflected lower sales of non-strategic, lower margin IT endpoint device placements and paper sales, as well as the effects of geographic simplification. The decline in both periods was partially offset by higher supplies revenue.
Previous wording
•Financing revenue is generated from direct and indirect financing of Xerox equipment. These revenues decreased 19.2% as compared to first quarter 2023, including a 1.6-percentage point benefit from currency. The decline at constant currency 1 reflects a reduction of the average finance receivables balance in the first quarter 2024 as a result of the sales of finance receivables in recent quarters to HPS Investment Partners (HPS), as well as lower originations. Finance receivables are approximately $720 million lower in March of 2024 as compared to March of 2023.
Current wording
•Financing revenue is generated from direct and indirect financing of Xerox equipment. These revenues decreased 22.4% as compared to second quarter 2023, including a 1.2-percentage point adverse impact from currency. Financing revenue for the six months ended June 30, 2024 decreased 20.8% as compared to the prior year period, including a 0.2-percentage point benefit from currency. The decline at constant currency 1 for both the three and six months ended June 30, 2024, respectively, reflects a reduction of the average finance receivables balance in the first half of 2024 as a result of the sales of finance receivables to HPS Investment Partners (HPS), as well as lower originations. Finance receivables are approximately $650 million lower in June of 2024 as compared to June of 2023.
Previous wording
Equipment sales revenue decreased 25.8% as compared to first quarter 2023, including a 0.5-percentage point benefit from currency. The decrease in both actual and constant currency 1 reflects the significant reduction in backlog 3 in the first quarter 2023 as compared to the first quarter 2024, as well as organizational changes implemented during the quarter and constraints in Entry A4, devices. Backlog 3 declined sequentially by approximately $2 million in the first quarter 2024 as compared to a decline of approximately $70 million in the first quarter 2023. Revenue declined across all product groups.
Current wording
For the six months ended June 30, 2024 Equipment sales revenue decreased 20.3%, including a 0.1-percentage point benefit from currency. The decrease in both actual and constant currency 1 reflects the significant reduction in backlog in the first quarter 2023 as compared to the first quarter 2024, as well as organizational changes implemented during the first quarter 2024, and the effects of non-strategic reductions in revenue, including offering and geographic simplification. Revenue declined across all product groups, and was most pronounced in Mid-range, driven by declines in A3 color multi-function printers.
Previous wording
First quarter 2024 gross margin of 29.5% decreased by 4.8-percentage points as compared to first quarter 2023, reflecting lower revenue and gross profit primarily due to charges associated with the Company's Reinvention, which had a 2.4-percentage point unfavorable impact on gross margin, as well as higher product costs. These impacts were partially offset by the benefits associated with recent cost and productivity actions.
Current wording
Gross margin for the six months ended June 30, 2024 of 31.3% decreased by 2.9-percentage points as compared to the prior year period, reflecting lower revenue and gross profit, primarily due to charges associated with the exit of certain production print manufacturing operations, which had a 1.4-percentage point unfavorable impact on gross margin, as well as higher transportation and product costs. These impacts were partially offset by the benefits associated with recent cost and productivity actions and favorable currency.
Previous wording
First quarter 2024 Equipment gross margin of 31.0% decreased by 5.5-percentage points as compared to first quarter 2023, reflecting lower revenue, pricing benefits in the prior year and higher product and transportation costs, partially offset by product mix.
Current wording
Second quarter 2024 Equipment gross margin of 34.5% decreased by 0.7-percentage points as compared to second quarter 2023, reflecting lower revenue and gross profit, and higher transportation and product costs. These impacts were partially offset by favorable currency.
Previous wording
First quarter 2024 Post sale gross margin of 29.1% decreased by 4.6-percentage points as compared to first quarter 2023, including lower page volumes, and charges associated with the Company's Reinvention, primarily related to the exit of certain production print manufacturing operations, which had a 3.0-percentage point unfavorable impact on gross margin. Higher product and transportation costs, and the termination of Fuji royalty income also adversely impacted gross margin in the quarter. These impacts were partially offset by the benefits associated with recent cost and productivity actions.
Current wording
Post sale gross margin for the six months ended June 30, 2024 of 30.8% decreased by 2.9-percentage points as compared to the prior year period, reflecting lower revenue and gross profit, including lower page volumes, and charges associated with the Company's Reinvention, primarily related to the exit of certain production print manufacturing operations, which had a 1.9-percentage point unfavorable impact on gross margin. Higher transportation and product costs, and the termination of Fuji royalty income also adversely impacted gross margin. These impacts were partially offset by the benefits associated with recent cost and productivity actions and favorable currency.
Previous wording
First quarter 2024 RD&E as a percentage of revenue of 3.3% decreased by 0.4-percentage points as compared to first quarter 2023, primarily due to the strategic decision to donate PARC in second quarter 2023.
Current wording
RD&E as a percentage of revenue for the six months ended June 30, 2024 of 3.2% decreased by 0.3-percentage points as compared to the prior year period, primarily due to the strategic decision to donate PARC in second quarter 2023.
Previous wording
First quarter 2024 RD&E of $49 million decreased $15 million as compared to first quarter 2023, primarily due to the strategic decision to donate PARC in second quarter 2023, and the spin-off, exit, or shutdown of certain other RD&E related activities or businesses, as well as a corresponding reduction in real estate. The lower spending in innovation reflects decisions which provide greater focus and financial flexibility to pursue growth opportunities adjacent to our core operations within Print, Digital and IT Services.
Current wording
Second quarter 2024 RD&E of $50 million decreased $7 million as compared to second quarter 2023. For the six months ended June 30, 2024 RD&E of $99 million decreased $22 million as compared to the prior year period. The decrease, as compared to the respective prior year periods was primarily due to the strategic decision to donate PARC in second quarter 2023, and the spin-off, exit, or shutdown of certain other RD&E related activities or businesses, as well as a corresponding reduction in real estate. The decrease also reflects productivity and cost savings related to the Company's Reinvention. The lower spending in innovation reflects decisions which provide greater focus and financial flexibility to pursue growth opportunities adjacent to our core operations within Print, Digital and IT Services.
Previous wording
First quarter 2024 SAG as a percentage of revenue of 26.4% increased by 2.7-percentage points as compared to first quarter 2023, primarily due to lower revenues.
Current wording
Second quarter 2024 SAG as a percentage of revenue of 24.9% increased by 0.2-percentage points as compared to second quarter 2023, primarily due to lower revenues.
Previous wording
First quarter 2024 SAG of $397 million decreased by $10 million as compared to first quarter 2023, primarily reflecting lower incentive compensation expense, productivity and cost savings related to the Company's Reinvention as well as the strategic decision to donate PARC in the prior year, and lower litigation costs. These favorable impacts were partially offset by higher bad debt expenses and unfavorable currency.
Current wording
SAG for the six months ended June 30, 2024 of $790 million decreased by $50 million as compared to the prior year period, primarily reflecting productivity and cost savings related to the Company's Reinvention, as well as, lower incentive compensation expense, lower litigation costs, and the strategic decision to donate PARC in the prior year. These favorable impacts were partially offset by higher bad debt expense and unfavorable currency.
Previous wording
The bad debt provision for the first quarter 2024 of $15 million increased $23 million as compared to the first quarter 2023, primarily related to a reserve release in the prior year period of approximately $12 million due to a favorable reassessment of the credit exposure on a large customer receivable balance, as well as the benefits related to the sale of finance receivables on a non-recourse basis as part of our on-going finance receivables funding agreement. We believe our current reserve position remains sufficient to cover expected future losses that may result from current and future macro-economic conditions including higher inflation and interest rates. We continue to monitor developments in future economic conditions, and as a result, our reserves may need to be updated in future periods. As of March 31, 2024, on a trailing twelve-month basis, bad debt expense was approximately 1.5% of total receivables, as compared to approximately 1.0% for the prior year comparable period.
Current wording
The bad debt provision for six months ended June 30, 2024 of $25 million, increased by $18 million as compared to the prior year period. The increase reflects a reserve release in the prior year period of approximately $12 million due to a favorable reassessment of the credit exposure on a large customer receivable balance.
Previous wording
We incurred Restructuring and related costs, net of $39 million for the three months ended March 31, 2024, as compared to $2 million in the prior year period. First quarter 2024 charges are associated with strategic actions taken as a result of the Company's Reinvention, including geographic simplification.
Current wording
We incurred Restructuring and related costs, net of $12 million for the second quarter 2024, as compared to $23 million for the second quarter 2023, and $51 million for the six months ended June 30, 2024, as compared to $25 million in the prior year period. Charges incurred during 2024 are associated with strategic actions taken as a result of the Company's Reinvention, primarily related to the exit of certain production print manufacturing operations and geographic simplification.
Previous wording
First quarter 2024 actions mainly impacted gross margins improvements. First quarter 2023 actions impacted several functional areas, with approximately 30% focused on gross margin improvements and approximately 70% focused on SAG reductions.
Current wording
Second quarter 2024 actions entirely impacted gross margins improvements. Second quarter 2023 actions impacted several functional areas, with approximately 50% focused on SAG reductions and approximately 50% focused on RD&E Optimization.
Previous wording
The Restructuring and related costs, net reserve balance for all programs as of March 31, 2024 was $123 million, of which $113 million is expected to be paid over the next twelve months.
Current wording
The Restructuring and related costs, net reserve balance for all programs as of June 30, 2024 was $97 million, of which $87 million is expected to be paid over the next twelve months.
Previous wording
Worldwide employment was approximately 18,700 as of March 31, 2024, a decrease of approximately 1,400 from December 31, 2023. The decrease primarily relates to the Company's Reinvention, which includes the initial impact of workforce reduction decisions announced in January 2024, as well as net attrition (attrition net of gross hires).
Current wording
Worldwide employment was approximately 18,100 as of June 30, 2024, a decrease of approximately 2,000 from December 31, 2023. The decrease primarily relates to the Company's Reinvention, which includes the effects of workforce reduction decisions announced in January 2024, as well as net attrition (attrition net of gross hires).
Previous wording
First quarter 2024 non-financing interest expense of $26 million was $12 million higher than first quarter 2023. The increase was related to higher interest rates on new debt, partially offset by lower non-financing debt in the prior year period as a result of the repayment of Senior Notes in 2022 and in the first quarter 2023. When non-financing interest is combined with financing interest expense (Cost of financing), total interest expense increased by $3
Current wording
Second quarter 2024 non-financing interest expense of $31 million was $19 million higher than second quarter 2023. Non-financing interest expense for the six months ended June 30, 2024 of $57 million was $31 million higher than the prior year period. The respective increase in both periods is primarily due to higher interest rates on new debt issued in the first quarter of 2024, partially offset by lower non-financing debt in the prior year period as a result of the repayment of Senior Notes in 2022 and in the first quarter 2023.
Previous wording
Xerox 2024 Form 10-Q 48 million as compared to first quarter 2023. This reflects the impact of higher interest rates on new debt partially offset by a lower average debt balance, as a result of the continued reduction of the average finance receivables balance, due to the sales of finance receivables in recent quarters to HPS Investment Partners, as well as lower originations.
Current wording
When non-financing interest is combined with financing interest expense (Cost of financing) for the three months ended June 30, 2024, total interest expense increased by $14 million as compared to second quarter 2023, while for the six months ended June 30, 2024, total interest expense of $113 million increased by $17 million from the prior year period. The respective increase in both periods reflects the impact of higher interest rates on new debt partially offset by a lower average debt balance, due in part to the reduction of the average finance receivables balance, due to the sales of finance receivables to HPS Investment Partners, as well as lower originations.
Previous wording
Non-service retirement-related costs of $23 million were $24 million higher than the prior year period, primarily due to an increase in actuarial losses subject to amortization as well as a decrease in the expected return on plan assets.
Current wording
Second quarter 2024 non-service retirement-related costs of $26 million were $15 million higher than the second quarter 2023, while non-service retirement-related costs of $49 million for the six months ended June 30, 2024 were $39 million higher than the prior year period. The respective increase in both periods is primarily due to an increase in actuarial losses subject to amortization, as well as a decrease in the expected return on plan assets.
Current wording
Loss (Gain) on early extinguishment of debt
Previous wording
First quarter 2024 gain on early extinguishment of debt of $3 million reflects a $4 million gain on the repayment of Senior Notes (via tender offer), partially offset by a loss of approximately $1 million on the write-off of deferred debt issuance costs.
Current wording
The (gain) on early extinguishment of debt of $(3) million for the six months ended June 30, 2024 reflects a $(4) million (gain) on the repayment of Senior Notes (via tender offer) in the first quarter of 2024, partially offset by a loss of approximately $1 million on the write-off of deferred debt issuance costs.
Previous wording
First quarter 2024 gain on release of contingent consideration of $5 million reflects a reserve release related to earn-out provisions which were not met, in connection with a prior acquisition.
Current wording
The gain on the release of contingent consideration of $5 million for the six months ended June 30, 2024 reflects a reserve release related to earn-out provisions which were not met, in connection with a prior acquisition.
Previous wording
First quarter 2024 pre-tax (loss) margin of (10.0)% decreased 15.0-percentage points, as compared to first quarter 2023 pre-tax income margin of 5.0%. The decrease was primarily due to lower revenues and associated gross profit, the divestitures of certain direct business operations in Latin America, the exit of certain production print manufacturing operations, higher Restructuring and related costs, net, and Other expenses, net. These impacts were partially offset by lower RD&E expenses, as well as lower Selling, administrative and general expenses.
Current wording
Pre-tax (loss) margin of (4.1)% for the six months ended June 30, 2024 decreased 4.0-percentage points, as compared to the prior year period pre-tax (loss) margin of (0.1)%. The decrease was primarily due to lower revenues and associated gross profit, the divestitures of certain direct business operations in Latin America, the exit of certain production print manufacturing operations, and higher Restructuring and related costs, net. These impacts were partially offset by the PARC donation charge in 2023, which resulted in a 3.8-percentage point favorable impact when comparing the pre-tax loss margin for the six months ended June 30, 2024 to the prior year period, as well as lower Selling, administrative and general expenses, insurance proceeds related to a legal settlement, which resulted in a 0.7-percentage point favorable impact, and lower RD&E expenses.
Previous wording
First quarter 2024 adjusted 1 operating income margin of 2.2% decreased by 4.7-percentage points as compared to first quarter 2023, reflecting lower revenue, which included the termination of Fuji royalty income, lower gross margin, which included higher product and transportation costs, and higher bad debt expense primarily related to a reserve release in the prior year period. These impacts were partially offset by the strategic decision to donate PARC in second quarter 2023, and the spin-off, exit, or shutdown of certain other RD&E related activities or businesses, as well as a corresponding reduction in real estate, and benefits from cost and productivity actions.
Current wording
Adjusted 1 operating income margin of 3.8% for the six months ended June 30, 2024 decreased by 2.7-percentage points as compared to prior year period, reflecting lower revenue and lower gross margin, which included the termination of Fuji royalty income, and higher transportation and product costs, as well as higher bad debt expense primarily related to a reserve release in the first quarter of 2023. These impacts were partially offset by lower Selling, administrative and general expenses, the benefits from the strategic decision to donate PARC in second quarter 2023, and the spin-off, exit, or shutdown of certain other RD&E related activities or businesses, as well as a corresponding reduction in real estate, and benefits from cost and productivity actions.
Previous wording
First quarter 2024 effective tax rate was 24.7% which resulted in a tax benefit. This tax benefit is higher than the benefit under the U.S. federal statutory tax rate of 21% due primarily to the redetermination of certain unrecognized tax positions, primarily offset by geographical mix of earnings, including the mix associated with charges related to the Company's Reinvention. On an adjusted 1 basis, first quarter 2024 effective tax rate was (22.2)% which resulted in a tax benefit. The difference between this rate and the U.S. federal statutory tax rate of 21% primarily reflects tax benefits from the redetermination of certain unrecognized tax positions offset by the geographical mix of earnings.
Current wording
The effective tax rate for the six months ended June 30, 2024 was 24.0% which resulted in a tax benefit. This tax benefit is higher than the benefit under the U.S. federal statutory tax rate of 21% due primarily to the redetermination of certain unrecognized tax positions, partially offset by the geographical mix of earnings, including the mix associated with charges related to the Company's Reinvention. On an adjusted 1 basis, the effective tax rate for the six months ended June 30, 2024 was 18.8%. The difference between this rate and the U.S. federal statutory tax rate of 21% primarily reflects the redetermination of certain unrecognized tax positions partially offset by the geographical mix of earnings.
Previous wording
Refer to Note 20 - (Loss) Earnings per Share in the Condensed Consolidated Financial Statements for additional information regarding the calculation of basic and diluted earnings per share.
Current wording
Refer to Note 20 - Earnings (Loss) per Share in the Condensed Consolidated Financial Statements for additional information regarding the calculation of basic and diluted earnings per share.
Previous wording
(1)Refer to the Adjusted Net Income and EPS reconciliation table in the "Non-GAAP Financial Measures" section.
Current wording
(1)Refer to the Adjusted Net Income and EPS reconciliation table in the "Non-GAAP Financial Measures" section. For the calculations of basis and diluted earnings (loss) per share, refer to Note 20 - Earnings (Loss) per Share in the Notes to the Condensed Consolidated Financial Statements.
Previous wording
First quarter 2024 Other Comprehensive Income, Net was $3 million and included the following: i) $36 million of net gains from the changes in defined benefit plans reflecting the amortization of actuarial losses, the positive impact of currency, and actuarial gains; ii) net translation adjustment losses of $32 million reflecting the weakening of most of our major foreign currencies against the U.S. Dollar during the quarter; and iii) $1 million of net unrealized losses. This compares to Other Comprehensive Income, Net of $83 million for the first quarter 2023, which included the following: i) net translation adjustment gains of $93 million reflecting the strengthening of our major foreign currencies against the U.S. Dollar during the quarter; ii) $4 million of net unrealized gains; and $14 million of net losses from the changes in defined benefit plans primarily due to the adverse impact of currency partially offset by net actuarial gains and the amortization of actuarial losses and settlement losses.
Current wording
Second quarter 2024 Other Comprehensive Loss, Net was $14 million and included the following: i) net translation adjustment losses of $20 million reflecting the weakening of most of our major foreign currencies against the U.S. Dollar during the quarter; and ii) $6 million of net gains from the changes in defined benefit plans reflecting the amortization of actuarial losses, partially offset by actuarial losses. This compares to Other Comprehensive Income, Net of $17 million for the second quarter 2023, which included the following: i) net translation adjustment gains of $49 million reflecting the strengthening of most of our major foreign currencies against the U.S. Dollar during the quarter; ii) $27 million of net losses from the changes in defined benefit plans primarily due to plan remeasurements and the adverse impact of currency, partially offset by amortization of actuarial losses; and iii) $5 million of net unrealized losses.
Showing the first 40 of 88 pairs. Open the source sections for the rest.
Rearranged current paragraphs (11)
Current report — wording carried from elsewhere
Xerox 2024 Form 10-Q 48
Current report — wording carried from elsewhere
We continue to monitor developments in future economic conditions, and as a result, our reserves may need to be updated in future periods. As of June 30, 2024, on a trailing twelve-month basis, bad debt expense was approximately 1.5% of total receivables, as compared to approximately 1.0% for the prior year comparable period (excluding the reserve release in the first quarter 2023).
Current report — wording carried from elsewhere
Second quarter 2024 effective tax rate was 28.0% which was higher than the U.S. federal statutory tax rate of 21% due primarily to the redetermination of certain unrecognized tax positions and the geographical mix of earnings, including the mix associated with charges related to the Company's Reinvention. On an adjusted 1 basis, second quarter 2024 effective tax rate was 25.5% which was higher than the U.S. federal statutory tax rate of 21% primarily due to changes in our uncertain tax positions and the geographical mix of earnings.
Current report — wording carried from elsewhere
Other Comprehensive Loss, Net for the six months ended June 30, 2024 was $11 million and included the following: i) net translation adjustment losses of $52 million reflecting the weakening of our major foreign currencies against the U.S. Dollar; ii) $1 million of net unrealized losses; and iii) $42 million of net gains from the changes in defined benefit plans primarily reflecting the amortization of actuarial losses, the positive impact of currency, partially offset by actuarial losses. This compares to Other Comprehensive Income, Net for the six months ended June 30, 2023 of $100 million, which included the following: i) net translation adjustment gains of $142 million reflecting the strengthening of most of our major foreign currencies against the U.S. Dollar; ii) $41 million of net losses from the changes in defined benefit plans primarily due to the adverse impact of currency and plan remeasurements, partially offset by amortization of actuarial losses and settlement losses; and iii) $1 million of net unrealized losses.
Current report — wording carried from elsewhere
•Entry - The decrease for the three months ended June 30, 2024 primarily reflects higher backlog reductions in the prior year period, and mix toward black-and-white installs. The decrease for the six months ended June 30, 2024 primarily reflects higher backlog reductions in the prior year period, as well as constraints in Entry, A4 devices during the first quarter of 2024.
Current report — wording carried from elsewhere
Installs for the six months ended June 30, 2024 as compared to prior year period reflect the following:
Current report — wording carried from elsewhere
•26% decrease in entry color installs, with A4 Color MFPs driving the majority of the decline
Current report — wording carried from elsewhere
•15% decrease in mid-range color installs, driven primarily by declines in A3 Color MFPs.
Current report — wording carried from elsewhere
•29% decrease in mid-range black-and-white installs, driven primarily by A3 Mono MFPs.
Current report — wording carried from elsewhere
•33% decrease in high-end color installs primarily reflecting declines in Entry Production Color Mid products.
Current report — wording carried from elsewhere
•20% decrease in high-end black-and-white primarily reflecting declines in High End Cut Sheet products.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
(2)Order backlog is measured as the value of unfulfilled sales orders, shipped and non-shipped, received from our customers waiting to be installed, including orders with future installation dates. It includes printing devices as well as IT hardware associated with our IT services offerings.
Previous report — wording carried elsewhere
Xerox 2024 Form 10-Q 44
Previous report — wording carried elsewhere
•Mid-range - The decrease for the three months ended March 31, 2024 reflects higher backlog 2 reductions in the prior year period.
Previous report — wording carried elsewhere
(2)Order backlog is measured as the value of unfulfilled sales orders, shipped and non-shipped, received from our customers waiting to be installed, including orders with future installation dates. It includes printing devices as well as IT hardware associated with our IT services offerings.
Previous report — wording carried elsewhere
Refer to Note 13 - Debt in the Condensed Consolidated Financial Statements for additional information regarding debt activity.