Xerox Holdings Corp

The following is a summary of our liquidity position:

•As of March 31, 2025 and December 31, 2024, total cash, cash equivalents and restricted cash of Xerox Holdings Corporation were $390 million and $631 million, respectively, and apart from restricted cash of $54 million and $55 million at March 31, 2025 and December 31, 2024, respectively, was readily accessible for use. The decrease in total cash, cash equivalents and restricted cash of $241 million reflects net cash used in financing activities of $159 million, as well as net cash used in operating cash activities of $89 million, both of which were partially offset by cash provided by investing activities of $6 million.

•Total debt at March 31, 2025 was $3,298 million, of which $1,651 million is allocated to and supports the Company's finance assets. The remaining debt of $1,647 million is attributable to the non-financing business and decreased from $1,658 million at December 31, 2024. Debt consists of senior unsecured notes, secured promissory notes, and borrowings under a Term Loan B facility.

•On April 11, 2025, we prepaid approximately $90 million of the Senior Notes due August 2025 using proceeds from the $400 million aggregate principal amount of 10.250% Senior Secured First Lien Notes due 2030 (the First Lien Notes) issued by Xerox Corporation, with the remaining balance of approximately $298 million due on or to prior to maturity in August 2025. Also on April 11, 2025, we repaid $95 million of aggregate principal amount of borrowings under Xerox Corporation’s first lien senior secured term loan credit facility (the TLB Facility). The application of the remaining proceeds from the First Lien Notes will be used for general corporate purposes. Refer to Note 21 - Subsequent Events for additional information related to our Debt activity in second quarter 2025.

•In December 2024, in connection with the Company's pending acquisition of Lexmark International II LLC, Xerox Corporation and Xerox Holdings Corporation obtained commitments for new debt financing pursuant to (i) a commitment letter with certain Incremental Commitment Parties for approximately $357 million in senior secured incremental term loan facility (the Incremental Facility), (ii) a commitment letter with senior unsecured commitment parties to provide debt financing in the form of $250 million principal amount of senior unsecured notes, and (iii) a debt commitment letter with Jefferies Finance LLC and Jefferies LLC (collectively, Jefferies), pursuant to which Jefferies agreed to provide debt financing in the form of $250 million senior unsecured notes (the SUNs), and a committed $550 million senior unsecured term loan facility (the Jefferies Term Loan Facility). On March 25, 2025, Xerox announced its intention to replace Jefferies' aggregate commitments for the SUNs and the Jefferies Term Loan Facility with the $400 million aggregate principal amount of 10.25% Senior Secured First Lien Notes Due in 2030 and $400 million aggregate principal amount of 13.50% Senior Secured Second Lien Notes Due in 2031 (collectively, the Notes) and such commitments were terminated following the completion of the offering of the Notes on April 11, 2025. Xerox Corporation and Xerox Holdings Corporation intend to use the remaining proceeds from these commitments (and/or an equivalent amount of debt securities in lieu thereof), together with cash on hand and drawings under Xerox Corporation's asset-backed revolving credit facility (as needed) to fund the $1.5 billion, inclusive of net debt and other assumed liabilities, purchase price of Lexmark.

•As of March 31, 2025, there were no borrowings under the ABL Facility, and approximately $41 million of letters of credits were issued under the facility. During the three months ended March 31, 2025, the maximum borrowings under the ABL Facility were $25 million.

•We continue to expect operating cash flows to be between $420 million to $470 million, and capital expenditures to be approximately $70 million in 2025.

Cash Flow Analysis

The following summarizes our cash, cash equivalents and restricted cash:

Xerox 2025 Form 10-Q 57

Cash Flows from Operating Activities

Net cash used in operating activities was $89 million for the three months ended March 31, 2025. The $10 million decrease in operating cash from the prior year period was primarily due to the following:

•$59 million decrease in pre-tax income before provisions, divestitures, restructuring and related costs and non-service retirement-related costs.

•$82 million decrease from finance receivables primarily due to lower sales of finance receivables partially offset by a higher level of run-off due to lower originations.

•$72 million increase from accounts payable primarily due to the timing of supplier and vendor payments.

•$56 million increase from accrued compensation due to the timing of payments of lower year-end accruals.

Cash Flows from Investing Activities

Net cash provided by investing activities was $6 million for the three months ended March 31, 2025. The $23 million change from the prior year period was primarily due to higher proceeds from the sale of surplus property and assets in the U.S.

Cash Flows from Financing Activities

Net cash used in financing activities was $159 million for the three months ended March 31, 2025. The $420 million decrease cash from the prior year period was primarily due to the following:

•$439 million decrease from net debt activity. 2025 reflects payments of $72 million on secured financing arrangements, $28 million on secured promissory notes and $7 million on the Term Loan B facility. 2024 reflects proceeds of $500 million on Senior Notes and $400 million on Convertible Senior Notes offset by net payments of $441 million on Senior Notes, deferred debt issuance costs of $15 million from Senior Notes issuances, $103 million on secured financing arrangements and $7 million on the Term Loan B facility. The $441 million of net payments on Senior Notes includes $83 million on Senior Notes maturing in May 2024 and $362 million for the early redemption of 2025 Senior Notes offset by early redemption premium of $4 million.

•$23 million increase due to no purchases of capped calls in the current year.

Refer to Note 12 - Debt in the Condensed Consolidated Financial Statements for additional information regarding debt activity.

Cash, Cash Equivalents and Restricted Cash

Refer to Note 11 - Supplementary Financial Information in the Condensed Consolidated Financial Statements for additional information regarding Cash, cash equivalents and restricted cash.

Operating Leases

We have operating leases for real estate and vehicles in our domestic and international operations, and for certain equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations. Our operating leases have remaining terms of up to ten years and a variety of renewal and/or termination options. As of March 31, 2025 and December 31, 2024, total operating lease liabilities were $196 million and $188 million, respectively.

Finance Leases

Xerox has finance leases for equipment in the U.S. and Europe, as well as for vehicles and related infrastructure, within outsourced warehouse supply arrangements, in the U.S. These leases have remaining maturities up to seven years. As of March 31, 2025 and December 31, 2024, total finance lease liabilities were $14 million and $53 million, respectively. The decrease in finance leases since December 31, 2024 is primarily related to the modification of a lease agreement entered into during the first quarter of 2025, which resulted in a change in the lease classification from financing to operating. Accordingly, we remeasured the right of use asset and the corresponding lease liability.

Refer to Note 9 - Lessee in the Condensed Consolidated Financial Statements for additional information regarding our leases accounted for under lessee accounting.

Xerox 2025 Form 10-Q 58

Debt and Customer Financing Activities

The following summarizes our debt:

(1)Represents secured debt issued by subsidiaries of Xerox Corporation as part of the securitization of Finance Receivables in prior year. These securitizations were repaid during the first quarter 2025.

Refer to Note 12 - Debt in the Condensed Consolidated Financial Statements for additional information regarding debt.

Finance Assets and Related Debt

The following represents our total finance assets, net associated with our lease and finance operations:

(1)Includes (i) Billed portion of finance receivables, net, (ii) Finance receivables, net and (iii) Finance receivables due after one year, net as included in our Condensed Consolidated Balance Sheets.

(2)The change from December 31, 2024 includes a decrease of $36 million due to currency.

Our lease contracts permit customers to pay for equipment over time rather than at the date of installation; therefore, we maintain a certain level of debt (that we refer to as financing debt) to support our investment in these lease contracts, which are reflected in Total finance assets, net. For this financing aspect of our business, we maintain an assumed 7:1 leverage ratio of debt to equity as compared to our finance assets.

Based on this leverage, the following represents the breakdown of total debt between financing debt and core debt:

(1)Finance receivables debt is the basis for our calculation of Equipment financing interest expense, which is included in Cost of services, maintenance, rentals and other in the Condensed Consolidated Statements of Loss.

Sales of Finance Receivables and Third Party Leasing Programs

Refer to Note 7 - Finance Receivables, Net in the Condensed Consolidated Financial Statements for additional information regarding our sales of finance receivables and our third party leasing programs.

Capital Market/Debt Activity

Refer to Note 12 - Debt and Note 21 - Subsequent Events in the Condensed Consolidated Financial Statements for additional information regarding our debt activity.

Xerox 2025 Form 10-Q 59

Liquidity and Financial Flexibility

We manage our worldwide liquidity using internal cash management practices, which are subject to i) the statutes, regulations and practices of each of the local jurisdictions in which we operate, ii) the legal requirements of the agreements to which we are a party, and iii) the policies and cooperation of the financial institutions we utilize to maintain and provide cash management services.

Our principal debt maturities are spread over the next five years as follows:

(1)On April 11, 2025, Xerox repaid approximately $90 million of Xerox Holdings Corporation's 5.00% Senior Notes due August 2025. Refer to Note 21 - Subsequent Events in the Condensed Consolidated Financial Statements for additional information regarding our debt activity.

Refer to Note 12 - Debt in the Condensed Consolidated Financial Statements for additional information regarding debt.

Treasury Stock

Xerox Holdings Corporation made no open-market repurchases of its Common Stock during 2025.