XEROX CORP

Our liquidity is primarily dependent on our ability to generate positive cash flows from operations. Additional liquidity is also provided through access to the financial capital markets and a committed asset-based revolving credit agreement (the ABL Facility), as well as the sales and assignment of finance lease receivables. Our access to financial capital markets may be limited from time to time due to a number of factors, including our credit ratings, the level of our outstanding indebtedness, and prevailing market conditions, including the trading levels of our existing debt securities. Based on our current level of operations, we do not expect our near term liquidity needs to be dependent on access to the financial capital markets and we believe that our available sources will be adequate to meet our liquidity needs for at least the next 12 months.

Currently, we are not aware of any other trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months from August 6, 2026, the date these Condensed Consolidated Financial Statements were issued.

We cannot assure you, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under the Company's ABL facility and in amounts sufficient to enable us to repay our indebtedness or to fund our other liquidity needs. The following is a summary of our liquidity position:

•As of June 30, 2026 and December 31, 2025, total cash, cash equivalents and restricted cash of Xerox Holdings Corporation were $552 million and $565 million, respectively, and apart from restricted cash of $57 million and $53 million at June 30, 2026 and December 31, 2025, respectively, was readily accessible for use. The decrease of $13 million primarily reflects net cash used in operating activities of $107 million, as well as net cash used in investing activities of $33 million, both of which were partially offset by net cash provided by financing activities of $128 million, which includes $80 million related to the IEEPA tariff receivables monetization.

•During the second quarter of 2026, the Company entered into a sale agreement to sell its rights to its IEEPA tariff receivables of $105 million, for cash consideration of approximately $80 million, which is reported as a financing transaction in the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2026. At June 30, 2026, a liability of $90 million was recorded on the Condensed Consolidated Balance Sheet in Financing liability – tariff receivables monetization. We currently estimate receiving the tariff refunds by December 31, 2026. Subsequent to the receipt, we will transfer any cash received to the purchaser of the tariff receivables.

•Total debt at June 30, 2026 was $4,223 million, of which $1,310 million is allocated to, and supports the Company's finance assets. The remaining debt of $2,913 million is attributable to the non-financing business and increased from $2,759 million at December 31, 2025. Debt at June 30, 2026 consists of senior secured and unsecured notes, secured promissory notes, borrowings under a Term Loan B facility, and senior secured term loans associated with a joint venture financing.

•In connection with Xerox Corporation's joint venture arrangement (the Joint Venture Arrangement) with TPG during the first quarter 2026, XRX Brandco Holdings LLC (IPCo Holdings), a fully consolidated variable interest entity (VIE) of Xerox Corporation, as borrower, entered into a credit agreement with Alter Domus (US) LLC, who provided $405 million aggregate principal amount of senior secured term loans (the Term Loans) (the Joint Venture Financing Arrangement). The Term Loans are accounted for as Debt in the Condensed Consolidated Balance Sheet of Xerox Corporation at June 30, 2026. The proceeds of the Joint Venture Financing Arrangement were distributed by dividend from IPCo Holdings to Xerox Corporation and are expected to be used for general corporate purposes and opportunistically addressing Xerox Holdings’ capital structure over time (which may include the redemption or payment of debt). In addition, Xerox Corporation purchased $45 million of Class A Units from IPCo Holdings. The Class A Units have a mandatory cumulative redemption which is expected in 2031.

•During the first half of 2026, the Company repurchased approximately $194 million of its 5.50% Senior Unsecured Notes due 2028 and $6 million of its 13.50% Senior Secured Notes due 2031 for an aggregate purchase price of approximately $101 million. The Company recognized a net gain of approximately $95 million on the early extinguishment of the debt, which was recorded to Other expenses (income), net in the Condensed Consolidated Statements of Income (Loss).

•As of August 6, 2026, and based on our June availability calculation, we have availability of $388 million before letters of credit issued under the ABL Facility of approximately $112 million. There are no current borrowings outstanding. Accordingly, our net availability is approximately $276 million. Certain debt covenants limit our total amount of secured debt outstanding. As of the date of our filing, our capacity under the ABL was not limited by

Xerox 2026 Form 10-Q 63 any debt covenants. Our capacity to borrow under the ABL Facility may be adversely impacted by the terms of the ABL Facility and certain other agreements that govern our indebtedness.

•We now expect operating cash flows to be approximately $340 million, which is a decrease from our previous guidance of $350 million, and includes $80 million related to the IEEPA tariff receivables monetization. The decrease reflects higher restructuring expense resulting from our increased synergy target, higher interest expense resulting from the Joint Venture Financing Arrangement, and lower than previously expected working capital 1. Although not committed, we believe we have the ability to sell finance receivables for additional liquidity.

Refer to the Condensed Consolidated Financial Statements as follows: Note 1 - Basis of Presentation for additional information related to the Joint Venture Arrangement, Note 11 - Supplementary Financial Information for additional information related to cash, cash equivalents and restricted cash, and supplemental cash flow information, and Note 12 - Debt for additional information related to the monetization of the IEEPA tariff receivables, Debt, and ABL activity.

(1)Working capital reflects Accounts receivable, net, Inventories and Accounts payable.

Cash Flow Analysis

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

Cash Flows from Operating Activities

Net cash used in operating activities was $107 million for the six months ended June 30, 2026, a decrease of $7 million from the prior year period. Cash flow from operating activities was impacted by a $55 million decrease related to finance receivables, primarily due to lower sales of finance receivables, partially offset by increased portfolio run-off as origination volumes declined. Working capital changes contributed to the use of cash, including higher accounts receivable and lower accounts payable. The unfavorable working capital movements were partially offset by lower use of cash for inventory. Refer to Note 8 – Finance Receivables, Net in the Condensed Consolidated Financial Statements for additional information regarding the sale of finance receivables

Cash Flows from Investing Activities

Net cash used in investing activities was $33 million for the six months ended June 30, 2026, a decrease of $21 million from the prior year period. The decrease was primarily driven by the sale of surplus property and assets in the U.S. in the prior year, higher capital expenditures and higher noncontrolling investments offset by a Lexmark Acquisition working capital adjustment.

Cash Flows from Financing Activities

Net cash provided by financing activities was $128 million for the six months ended June 30, 2026, a decrease of $331 million from the prior year period. The decrease in cash primarily reflected lower net debt issuances offset by the sale of IEEPA tariff receivables and lower dividend payments in 2026. During 2025, financing activities included $860 million from Senior Notes issuances and the repayments of existing debt, including secured financing arrangements, secured promissory notes and Term Loan B borrowings. Cash used in financing activities during 2025 also reflected commitment fees associated with the Lexmark Acquisition financing.

Xerox 2026 Form 10-Q 64

Debt and Customer Financing Activities

The following summarizes our debt:

(1) Includes secured debt issued by subsidiaries of Xerox Corporation as part of the securitization of finance receivables. The balance at June 30, 2026 includes debt of $450 million associated with the Joint Venture Arrangement as described in Note 1 - Basis of Presentation in the Condensed Consolidated Financial Statements, and Note 12 - Debt in the Condensed Consolidated Financial Statements.

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.

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 Income (Loss).

Sales of Finance Receivables and Third Party Leasing Programs

Refer to Note 8 - 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 in the Condensed Consolidated Financial Statements for additional information regarding our debt activity including our Joint Venture Financing Arrangement and the early redemptions of debt during the first half of 2026.

Financing Liability – Tariff Receivables Monetization

Refer to Note 12 - Debt in the Condensed Consolidated Financial Statements for additional information related to the monetization of the IEEPA tariff receivables.

Xerox 2026 Form 10-Q 65

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)Represents subsidiaries of Xerox Corporation. The balance at June 30, 2026 includes debt of $450 million associated with the Joint Venture Arrangement as described in Note 1 - Basis of Presentation in the Condensed Consolidated Financial Statements, and Note 12 - Debt in the Condensed Consolidated Financial Statements.

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 2026.