Core Viewpoint - Xerox Holdings Corporation has announced early tender results for cash tender offers for its 2024 and 2025 senior notes, indicating a proactive approach to managing its debt obligations and optimizing its capital structure [1][2]. Tender Offers Overview - The tender offers include the purchase of up to $362 million of 5.000% senior notes due 2025 and all of the 3.800% senior notes due 2024 [2]. - The tender offers are governed by the terms outlined in the Offer to Purchase dated March 4, 2024, with amendments made on March 5, 2024 [1][2]. Early Tender Results - As of the early tender date of March 15, 2024, a total of $82,842,000 of the 2024 Notes and $544,166,000 of the 2025 Notes were validly tendered [3][4]. - The company will accept $362 million of the 2025 Notes on a pro rata basis due to the maximum tender cap being exceeded, with a proration factor of approximately 66.608% [5]. Settlement Information - The company plans to make payments for the validly tendered notes accepted for purchase on March 20, 2024, designated as the Early Settlement Date [4]. Company Background - Xerox has over 100 years of experience in redefining workplace technology, focusing on office and production print technology, and expanding into software and services to support hybrid workplaces [7][8].

Xerox Holdings Corporation (XRX) has had an impressive run over the past year, gaining 11.7%.The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, with an average surprise of 64.8%. Its bottom line is benefiting from "Project Own It," an enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs, as well as realigning the business to changing market conditions."Project Own It” is contributing significantly ...

Core Insights - Xerox Holdings Corporation has announced a transformation of its operating model in Argentina and Chile by selling its operations in these regions to Grupo Datco, a technology and fiber optic network services provider in Latin America [1][2] - This transition is part of Xerox's ongoing Reinvention strategy, aimed at enhancing client support and accelerating growth through partnerships [1] - Grupo Datco will operate as an independent entity, servicing Xerox devices in Argentina and Chile and becoming the exclusive partner for Xerox in these markets [1][2] Company Strategy - The sale aligns with Xerox's commitment to helping clients achieve their goals and enhancing productivity through a partner-led model [1] - John Bruno, president and COO of Xerox, emphasized the importance of partnerships in driving growth and success for clients [1] - Grupo Datco's CEO highlighted the potential for new growth opportunities and a long-term business plan focused on preserving the workforce and leveraging synergies [2] Market Position - Grupo Datco has a successful track record with acquired companies and aims to increase market share for Xerox's products and services in Argentina and Chile [2] - Xerox has a well-established partner-led business model and will maintain its brand presence in the region through its network of partners [1]

Core Viewpoint - Xerox Holdings Corporation has successfully closed a private placement of $350 million in 3.75% Convertible Senior Notes due 2030, with an option for initial purchasers to buy an additional $50 million [1][2] Group 1: Financial Details - The net proceeds from the offering will be used to fund capped call transactions, refinance existing senior notes, repay other outstanding debts, cover related fees, and for general corporate purposes [2] - The Notes are convertible into cash and shares of common stock, with an initial conversion rate of 47.9904 shares per $1,000 principal amount, equating to a conversion price of approximately $20.84 per share, representing a 25% premium over the closing price of $16.67 on March 6, 2024 [3] - The Notes will mature on March 15, 2030, and can be redeemed by the Company starting September 20, 2027, under certain conditions [4] Group 2: Capped Call Transactions - The Company has entered into capped call transactions to mitigate potential dilution of its common stock upon conversion of the Notes, with a cap price of approximately $28.34 per share, a 70% premium over the last reported sale price [5] Group 3: Regulatory and Offering Details - The Notes and related guarantees are offered only to qualified institutional buyers under Rule 144A, and they have not been registered under the Securities Act [6] - This announcement does not constitute an offer to sell or solicit offers to buy the Notes or any other securities [7] Group 4: Company Overview - Xerox has over 100 years of experience in redefining workplace technology, focusing on office and production print technology, and expanding into software and services to support hybrid workplaces [8]

NORWALK, Conn.--(BUSINESS WIRE)--Xerox Holdings Corporation (NASDAQ: XRX) (the “Company” or “Xerox”) announced today the pricing of $350,000,000 aggregate principal amount of 3.75% Convertible Senior Notes due 2030 (the “Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”). The size of the offering was increased by $50 million subsequent to the initial announcement of the offering. The Company also granted the initial ...

NORWALK, Conn.--(BUSINESS WIRE)--Xerox Holdings Corporation (NASDAQ: XRX) (the “Company”) announced today that it has priced an offering of $500 million aggregate principal amount of 8.875% Senior Notes due 2029 (“Notes”). The Notes will be issued at a price of 100% of their principal amount. The size of the offering was increased by $100 million subsequent to the initial announcement of the offering. The Company intends to use the net proceeds from the sale of the Notes to (i) refinance all of its outstan ...

NORWALK, Conn.--(BUSINESS WIRE)--Xerox Holdings Corporation (NASDAQ: XRX) today announced that it has increased the maximum principal amount of its $750 million aggregate principal amount outstanding of 5.000% Senior Notes due 2025 (the “2025 Notes”) that it can repurchase under its previously announced cash tender offer for the 2025 Notes (the “2025 Notes Tender Offer”) from $94 million to $362 million, on the terms and subject to the conditions set forth in the related Offer to Purchase dated March 4, 202 ...

NORWALK, Conn.--(BUSINESS WIRE)--Xerox Holdings Corporation (NASDAQ: XRX) announced today that its board of directors declared a quarterly dividend of $0.25 per share on Xerox Holdings Corporation Common Stock. The dividend is payable on April 30, 2024, to shareholders of record on March 29, 2024. The board also declared a quarterly dividend of $20.00 per share on the outstanding Xerox Holdings Series A Convertible Perpetual Preferred Stock. The dividend is payable on April 1, 2024, to shareholders of reco ...

Strategic Repositioning and Reinvention - Xerox's Reinvention strategy aims to deliver $300 million of annual net adjusted operating income improvement above 2023 levels through 2026, with more than one-third of that improvement expected in 2024[11] - Xerox divested non-core businesses including PARC, Xerox Research Center of Canada (XRCC), and its 3D printing business, Elem[12] - Xerox's strategic priorities for 2024 include strengthening core businesses, structural cost improvements, and balanced capital allocation[13] - Xerox's Print, Digital, and IT Services businesses form the bedrock of its strategic repositioning, with a focus on partner-led distribution models and a business unit-led organizational structure[14] - Xerox announced a 15% targeted workforce reduction in January 2024 as part of its Reinvention strategy[27] - Xerox's restructuring and transformation plans, including Reinvention, aim to reduce costs, manage cash flow, and achieve operating efficiencies, but may lead to business disruption during implementation[54] Financial Performance and Cash Flow - Xerox's free cash flow in 2024 is expected to be used to pay a $1 per share dividend and reduce leverage, with excess free cash flow allocated to high-return projects or acquisitions[14] - Total revenues for 2023 were $6,886 million, a decrease of 3.1% compared to $7,107 million in 2022[226] - Net income for 2023 was $1 million, a significant improvement from a net loss of $322 million in 2022[226] - Cash and cash equivalents decreased by 50.3% to $519 million in 2023 from $1,045 million in 2022[231] - Net cash provided by operating activities in 2023 was $686 million, a significant increase from $159 million in 2022[232] - Total equity decreased to $2.548 billion in 2023 from $3.353 billion in 2022, primarily due to comprehensive loss and stock repurchases[233] - Cash dividends declared for common stock in 2023 were $146 million, a decrease from $159 million in 2022[233] - Common stock repurchases in 2023 amounted to $553 million, significantly higher than $113 million in 2022[233] - Total Segment revenue for 2023 was $6,972 million, compared to $7,197 million in 2022 and $7,130 million in 2021[295] - Segment profit for 2023 was $389 million, with a segment margin of 5.6%, compared to $275 million and 3.9% in 2022, and $375 million and 5.3% in 2021[295] Business Operations and Revenue Streams - Xerox's Workplace Solutions revenues include the sale of products, supplies, and associated technical service and financing through FITTLE[17] - Xerox's Production Solutions portfolio includes high-speed, high-volume cut-sheet printing presses and solutions for graphic communications and production print environments[20] - Xerox's Managed Print Solutions (MPS) portfolio targets clients ranging from global enterprises to small and mid-sized businesses, offering services to manage hybrid workforces[20] - Approximately 45% of Xerox's revenue is generated by customers outside the U.S.[22] - Xerox's revenues are historically lower in the first and third quarters due to seasonality of technology purchases and printing volume[42] - United States revenue in 2023 was $3.826 billion, a decrease of 4.7% from $4.014 billion in 2022[285] - Europe revenue in 2023 was $1.951 billion, a slight increase of 0.8% from $1.935 billion in 2022[285] - Equipment revenue in 2023 was $1.655 billion, an increase of 1.9% from $1.624 billion in 2022[285] - Maintenance agreements revenue in 2023 was $1.631 billion, a decrease of 5.7% from $1.730 billion in 2022[285] - Direct equipment lease revenue in 2023 was $920 million, an increase of 30% from $708 million in 2022[285] Innovation and Intellectual Property - Xerox and its subsidiaries were awarded 300 U.S. utility and design patents in 2023, with a total of 6,471 U.S. utility and design patents held as of December 31, 2023[23] - Xerox's future success depends on its ability to develop or acquire new products and technologies, particularly in adjacent markets like Intelligent Document Processing and managed IT Services[49] - Xerox's intellectual property rights are valuable, and any inability to protect them could reduce the value of its products, services, and brand[60] Environmental, Social, and Governance (ESG) - Xerox fast-tracked its net zero goal to 2040, aiming to reduce Scope 1 and Scope 2 GHG emissions by at least 60% by 2030, with a 6.9% reduction achieved in 2022, totaling a 46% reduction since 2016[25] - Approximately 93% of spent toner cartridges and consumables returned through Xerox's Green World Alliance program were recycled, reused, or remanufactured in 2022[26] - Xerox employees volunteered for approximately 42,300 hours in 2023, a 75% increase compared to 2022, and donated approximately $1.1 million, including company-matched contributions[24] - Approximately 70% of Xerox's 5-year Diversity, Inclusion, and Belonging (DIB) roadmap initiatives, comprising 140 initiatives, were progressed or completed by 2023[29] - Xerox's failure to meet ESG expectations or standards or achieve its ESG goals could adversely affect its business, results of operations, financial condition, or stock price[63] Workforce and Employee Engagement - Xerox had approximately 20,100 employees as of December 31, 2023, a 2.0% reduction from 2022, with 10,200 employees in the U.S. and 9,900 outside the U.S.[27] - In 2023, Xerox employees completed approximately 257,000 courses, totaling over 203,000 hours of training, with 95% of employees completing at least one formal learning offering[33] - Xerox's safety training module was completed by approximately 99% of employees in 2023, with 102 Day Away from Work Injury cases reported, up from 77 in 2022[28] - Approximately 35% of Xerox employees were eligible to participate in the Long-Term Incentive (LTI) equity-based program in 2023[32] - Xerox's ability to attract and retain key personnel is challenged by a competitive labor market and changes in the business model[53] Debt and Financial Structure - Xerox's total debt as of December 31, 2023, was $3.3 billion, consisting of $2.4 billion in Senior and Unsecured Debt and approximately $900 million in Secured Borrowings[56] - Approximately $2.4 billion of the company's $3.3 billion debt is allocated to its financing business[39] - The company amended its finance receivables funding agreement with HPS in Q2 2023 to include the sale of underlying leased equipment, reducing financing debt[39] - The company has a $300 million asset-based revolving credit agreement (ABL) with Citibank, N.A., and a $550 million term loan B credit agreement (TLB) with Jefferies Finance LLC, both of which impose significant operating and financial restrictions[57] - The projected benefit obligations for the company's defined benefit pension and retiree-health benefit plans exceeded the value of the assets by approximately $1.2 billion as of December 31, 2023[59] Risk Management and Compliance - Global macroeconomic conditions, including inflation and interest rates, significantly impact the company's business and financial performance[47] - The company faces supply chain disruptions, which may increase logistics and parts costs, potentially impacting customer needs[47] - The company uses currency derivative contracts to hedge foreign currency-denominated assets, liabilities, and transactions, though it does not hedge translation effects[47] - Xerox's government contracts are subject to termination rights, audits, and investigations, which could negatively impact its reputation and ability to compete for new contracts[54] - Xerox's offshoring and outsourcing efforts, particularly in developing countries, may be subject to geopolitical uncertainty and could impact service quality[54] - The company is subject to potential cybersecurity risks, including breaches, ransomware, and phishing attacks, which could lead to significant financial losses and reputational damage[67] - The company is subject to privacy and data protection laws such as the CCPA, CPRA, and GDPR, with potential fines up to EUR 20 million or 4% of total worldwide annual revenue for non-compliance[69] - The company may face increased costs due to tariffs, quotas, or duties on foreign imports, which could negatively impact its financial performance[70] - The company is subject to environmental regulations such as REACH and TSCA, which could lead to restrictions on chemical usage and increased compliance costs[70] - The company is involved in environmental remediation proceedings under CERCLA, which could result in financial exposure depending on changes in laws and contamination discoveries[72] International Operations and Currency Impact - Approximately 45% of Xerox's revenue is generated by customers outside the U.S.[22] - A 10% appreciation or depreciation of the U.S. Dollar against all currencies would impact the cumulative translation adjustment portion of equity by approximately $320 million[201] - The net amount invested in foreign subsidiaries and affiliates, primarily Xerox Limited and Xerox Canada Inc., was approximately $3.2 billion at December 31, 2023[201] - The company's international operations subject it to risks including foreign exchange and interest rate risk, unfavorable political, regulatory, and tax conditions, and global trade issues[65] Research, Development, and Engineering - Research, development, and engineering expenses decreased by 24.7% to $229 million in 2023 from $304 million in 2022[226] - Research, development, and engineering costs are expensed as incurred, with sustaining engineering costs of $55 million in 2023[281] Accounting and Financial Reporting - The company maintained effective internal control over financial reporting as of December 31, 2023, based on COSO's Internal Control - Integrated Framework (2013)[204] - Consolidated financial statements prepared in accordance with U.S. GAAP[219] - Audit Committee composed of independent directors oversees financial reporting and internal controls[219] - PricewaterhouseCoopers LLP served as the company's auditor since 2001[218] - Management responsible for integrity and objectivity of financial statements[219] - Deferred tax assets recorded at $892 million, net of a valuation allowance of $375 million as of December 31, 2023[210] - U.S. foreign tax credit carryforwards with a limited life included in deferred tax assets[210] - Management assessed realizability of deferred tax assets based on historical profitability, projected future taxable income, and tax planning strategies[210] - Significant judgment involved in assessing realizability of deferred tax assets related to U.S. foreign tax credit carryforwards[210] - Auditors used specialized professionals to evaluate management's assumptions on projected future taxable income[210] Finance Receivables and Credit Risk - Total finance receivables in the United States (Direct) increased from $210 million in 2021 to $327 million in 2022, a growth of 55.7%[318] - Total finance receivables in the United States (Indirect) grew from $341 million in 2021 to $481 million in 2022, an increase of 41.1%[318] - Canada's total finance receivables rose from $53 million in 2021 to $83 million in 2022, a 56.6% increase[318] - EMEA's total finance receivables increased from $285 million in 2021 to $438 million in 2022, a growth of 53.7%[318] - Total finance receivables globally grew from $889 million in 2021 to $1,329 million in 2022, a 49.5% increase[318] - As of December 31, 2023, total billed finance receivables in the United States were $57 million, with $1,148 million unbilled, totaling $1,205 million[320] - Canada's total finance receivables as of December 31, 2023, were $255 million, with $247 million unbilled[320] - EMEA's total finance receivables as of December 31, 2023, were $1,142 million, with $1,132 million unbilled[320] - Total finance receivable sales net proceeds for the year ended December 31, 2023, were $1,102 million, compared to $60 million in 2022[322] - The net bad debt provision for finance receivables was $6 million in 2023, down from $26 million in 2022, primarily due to a $12 million credit related to a reserve release in the U.S.[313] - Finance receivables due after one year decreased to $1,597 million in 2023 from $1,948 million in 2022[311] - The allowance for credit losses as a percentage of net finance receivables before allowance was 3.5% at December 31, 2023, compared to 3.6% at December 31, 2022[313] - The balance of finance receivables collectively evaluated for impairment decreased to $2,602 million in 2023 from $3,219 million in 2022[314] - Loss rates for finance receivables are generally less than 1% for low credit risk, 2% to 5% for average credit risk, and 7% to 10% for high credit risk[314] - The allowance for credit losses balance decreased to $92 million in 2023 from $117 million in 2022, with the U.S. portion decreasing to $58 million from $83 million[314] Inventory and Operating Leases - Total inventories decreased from $797 million in 2022 to $661 million in 2023, a 17.1% decline[324] - Equipment on operating leases decreased to $1,074 million in 2023 from $1,163 million in 2022, a decline of 7.7%[325] - Accumulated depreciation on operating lease equipment decreased to $809 million in 2023 from $928 million in 2022, a reduction of 12.8%[325] - Net equipment on operating leases increased to $265 million in 2023 from $235 million in 2022, a growth of 12.8%[325] - Estimated minimum future revenues from operating leases decreased to $351 million in 2023 from $386 million in 2022, a decline of 9.1%[326] - Contingent rentals on operating leases remained stable at $62 million in 2023, consistent with 2022 and 2021[326] - The company sold rights to payments under operating leases to a consolidated special purpose entity in 2021, using them as collateral for a secured loan[327] Revenue Recognition and Accounting Policies - Revenue recognition for equipment sales is based on transfer of control, with installation revenue recognized upon delivery and installation[262] - Maintenance service revenue is recognized based on billed page volumes over the agreement term[263] - Bundled lease arrangements allocate revenue between lease and non-lease elements based on standalone selling prices[264] - Lease pricing interest rates are reassessed quarterly based on local market rates and customer credit factors[264] - The allowance for doubtful accounts is estimated using historical loss experience and current economic conditions[268] - Finance receivables are securitized through SPEs, with no gains or losses recognized at securitization[269] - Inventories are recorded at the lower of average cost or net realizable value, with provisions for excess and obsolete inventory based on near-term product demand forecasts and new product introductions[270] - Equipment on operating leases is depreciated to estimated salvage value over the lease term using the straight-line method[271] - Lease classification criteria include lease term exceeding 75% of the asset's economic life and present value of lease payments exceeding 90% of the asset's fair market value[273] - Internal Use Software costs are capitalized and amortized over the expected useful life, while Product Software costs are amortized over the estimated economic life[274] - Goodwill is tested for impairment annually, with impairment losses recognized if the carrying value exceeds the fair value determined by income and market approaches[276] - Long-lived assets are reviewed for impairment when events indicate potential unrecoverable carrying value, with impairment losses recognized if future cash flows are insufficient[277] - Pension and post-retirement benefit obligations use a delayed recognition feature, with assumptions including discount rates, expected return on plan assets, and healthcare cost increases[278] - Government grants related to income are recognized as a reduction of expenses when compliance with grant conditions is assured[282] - Foreign currency translation adjustments are recorded in Accumulated other comprehensive loss, with remeasurements for subsidiaries using the U.S. Dollar as the functional currency[283] Acquisitions and Divestitures - Xerox divested non-core businesses including PARC, Xerox Research Center of Canada (XRCC), and its 3D printing business, Elem[12] - Xerox donated Palo Alto Research Center (PARC) to Stanford Research Institute International (SRI) in April 2023, resulting in a net charge of $132 million in Q2 2023, including $115 million allocated Goodwill and a net after-tax loss of $92 million[306] - Total Contributed Aggregate Revenue from acquisitions in 2023 was $257 million, compared to $200 million in 2022 and $19 million in 2021[304] Cybersecurity and Data Protection - The company's cybersecurity program is integrated within the enterprise risk management system and follows NIST and ISO 27001 standards[77] - No cybersecurity incident has resulted in any material impact on the company's business, operations, or financial results to date[77] - The company is subject to potential cybersecurity risks, including breaches, ransomware, and phishing attacks, which could lead to significant financial losses and reputational damage[67] - The company is subject to privacy and data protection laws such as the CCPA, CPRA, and GDPR, with potential fines up to EUR 20 million or 4% of total worldwide annual revenue for non-compliance[69] Tax and Regulatory Compliance - The EU's Pillar Two Directive, effective January 1, 2024, introduces a global minimum tax rate of at least 15%, but the company does not expect it to have a material impact on its consolidated financial statements[66] - The company is subject to environmental regulations such as REACH and TSCA, which could lead to restrictions on chemical usage and increased compliance costs[70] - The company is involved in environmental remediation proceedings under CER

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