Xerox (NYSE: XRX) announced today the initial filing of a Form 10 registration statement with the U.S. Securities and Exchange Commission (SEC) in connection with the separation of Xerox into two independent, publicly traded companies. The filing includes important information on the planned distribution of shares of Conduent Incorporated, Xerox’s current business process outsourcing business, including an overview of the business, reportable segments and historical financial results for fiscal years 2013, 2014 and 2015 and the three months ended March 31, 2016.
“Today’s filing marks a significant step toward completing Xerox’s separation, which will create two strong companies with enhanced focus and flexibility to pursue distinct and compelling business strategies and growth opportunities,” said Ursula Burns, chairman and chief executive officer of Xerox. “We are making solid progress towards completing the separation by year-end and positioning the new companies for successful futures.”
With approximately $7 billion in 2015 revenue, Conduent will be a leading provider of business process services with expertise in transaction-intensive processing, analytics and automation. Conduent will focus on industry-specific service offerings in attractive growth markets such as healthcare and transportation, as well as multi-industry service offerings in transaction processing, customer care and payment services, among others.
Following the separation, Xerox will continue to be a trusted partner to its customers, helping them improve productivity, workflow and business performance through its deep understanding of how, why and where people work. With approximately $11 billion in 2015 revenue, Xerox will be well positioned to build on its long-standing global leadership positions and pursue select growth opportunities with a focus on operational excellence, cost discipline, technology and innovation.
The filing will be updated with additional information in subsequent amendments in conjunction with the regular SEC review process. Post-distribution capitalization of Conduent has not yet been finalized. Pro-forma financial information reflecting the company's final capital structure and capital allocation policies, among other matters, will be included in subsequent amendments to the Form 10.
The separation is intended to be tax-free to Xerox shareholders for U.S. Federal income tax purposes. Xerox is on track to complete the separation by the end of 2016, subject to final approval by Xerox’s board of directors and the satisfaction of other customary conditions, including the effectiveness of the Form 10 registration statement filed today.
A copy of the Form 10 registration statement is available here.
Xerox is helping change the way the world works. By applying our expertise in imaging, business process, analytics, automation and user-centric insights, we engineer the flow of work to provide greater productivity, efficiency and personalization. Our employees create meaningful innovations and provide business process services, printing equipment, software and solutions that make a real difference for our clients and their customers in 180 countries. On January 29, 2016, Xerox announced that it plans to separate into two independent, publicly-traded companies: a business process outsourcing company and a document technology company. Xerox expects to complete the separation by year-end 2016.
This release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to identify forward-looking statements. These statements reflect management’s current beliefs, assumptions and expectations, including with respect to the proposed separation of BPO from the Document Technology and Document Outsourcing business, the expected timetable for completing the separation, the future financial and operating performance of each business, the strategic and competitive advantages of each business, future opportunities for each business and the expected amount of cost reductions that may be realized in the cost transformation program, and are subject to a number of factors that may cause actual results to differ materially. Such factors include but are not limited to: changes in economic conditions, political conditions, trade protection measures, licensing requirements and tax matters in the United States and in the foreign countries in which we do business; changes in foreign currency exchange rates; our ability to successfully develop new products, technologies and service offerings and to protect our intellectual property rights; the risk that multi-year contracts with governmental entities could be terminated prior to the end of the contract term and that civil or criminal penalties and administrative sanctions could be imposed on us if we fail to comply with the terms of such contracts and applicable law; the risk that our bids do not accurately estimate the resources and costs required to implement and service very complex, multi-year governmental and commercial contracts, often in advance of the final determination of the full scope and design of such contracts or as a result of the scope of such contracts being changed during the life of such contracts; the risk that subcontractors, software vendors and utility and network providers will not perform in a timely, quality manner; service interruptions; actions of competitors and our ability to promptly and effectively react to changing technologies and customer expectations; our ability to obtain adequate pricing for our products and services and to maintain and improve cost efficiency of operations, including savings from restructuring actions and the relocation of our service delivery centers; the risk that individually identifiable information of customers, clients and employees could be inadvertently disclosed or disclosed as a result of a breach of our security systems; the risk in the hiring and retention of qualified personnel; the risk that unexpected costs will be incurred; our ability to recover capital investments; the risk that our Services business could be adversely affected if we are unsuccessful in managing the start-up of new contracts; the collectability of our receivables for unbilled services associated with very large, multi-year contracts; reliance on third parties, including subcontractors, for manufacturing of products and provision of services; our ability to expand equipment placements; interest rates, cost of borrowing and access to credit markets; the risk that our products may not comply with applicable worldwide regulatory requirements, particularly environmental regulations and directives; the outcome of litigation and regulatory proceedings to which we may be a party; the possibility that the proposed separation of BPO from the Document Technology and Document Outsourcing business will not be consummated within the anticipated time period or at all, including as the result of regulatory, market or other factors; the potential for disruption to our business in connection with the proposed separation; the potential that BPO and Document Technology and Document Outsourcing do not realize all of the expected benefits of the separation; and other factors that are set forth in the “Risk Factors” section, the “Legal Proceedings” section, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other sections of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 and our 2015 Annual Report on Form 10-K and Conduent’s Form 10 Registration Statement filed with the SEC. Xerox assumes no obligation to update any forward-looking statements as a result of new information or future events or developments, except as required by law.