Xerox Reports Third-Quarter 2014 Earnings

• GAAP EPS from continuing operations of 22 cents
• Adjusted EPS of 27 cents
• Total revenue of $5.1 billion, 57 percent from Services
• Services revenue of $2.9 billion, up 1 percent
• Operating margin of 9.5 percent, up 0.1 points year-over-year
• Cash flow from operations of $595 million
• Share repurchase of $251 million

NORWALK, Conn., Oct. 22, 2014 – Xerox (NYSE: XRX) announced today third- quarter 2014 adjusted earnings per share of 27 cents. Adjusted EPS excludes 5 cents related to amortization of intangibles, resulting in GAAP EPS from continuing operations of 22 cents.

In the third-quarter, total revenue of $5.1 billion was down 2 percent. Revenue from the company’s Services business, which represented 57 percent of total revenue, was $2.9 billion, up 1 percent and flat year-over-year in constant currency. Revenue from the company’s Document Technology business, which represented 40 percent of total revenue, was $2 billion, down 6 percent. Segment margin for Services was 8.9 percent while the Document Technology business was 14 percent.

“This quarter we delivered earnings at the high end of our range. Profits from our Document Technology business came in above expectations while Services results were lower than planned,” said Ursula Burns, Xerox chairman and chief executive officer. “Our Document Technology business continues to provide strong profitability, and we are continuing to invest in our Services business for revenue and profit improvement by strengthening leadership and evolving our operating model to better leverage our scale and drive efficiency and customer value. These activities will position us well for the future.”

Third-quarter operating margin of 9.5 percent improved 0.1 points year-over- year, resulting in operating profit of $486 million. Gross margin was 30.8 percent, and selling, administrative and general expenses were 18.6 percent of revenue.

The company generated $595 million in cash flow from operations during the quarter. In the third-quarter, Xerox repurchased $251 million in stock and $730 million through Sept. 30, 2014 and is increasing its full-year expectation for repurchases to approximately $1 billion. “Our business continues to deliver strong cash flow that enables us to invest for growth while returning capital to shareholders through share repurchases and dividends,” added Burns.

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For the fourth-quarter, Xerox expects 2014 GAAP earnings per share to be 26 to 28 cents per share. Fourth-quarter adjusted EPS is expected to be 30 to 32 cents.

The company expects full-year 2014 GAAP earnings per share of 93 to 95 cents and full-year adjusted EPS of $1.11 to $1.13.

About Xerox

Xerox is a global business services, technology and document
management company helping organizations transform the way they
manage their business processes and information. Headquartered in Norwalk, Conn., we have more than 140,000 Xerox employees and do business in more than 180 countries. Together, we provide business process services, printing equipment, hardware and software technology for managing information — from data to documents. Learn more at www.xerox.com.

Non- GAAP Measures

This release refers to the following non-GAAP financial measures:

•   Adjusted EPS (earnings per share) for the third-quarter 2014 as well as for the fourth-quarter and full-year 2014 guidance that excludes certain items.
•   Operating profit and margin for the third-quarter 2014 that excludes certainexpenses.
•   Constant Currency revenue growth for the third-quarter 2014, which excludesthe effects of currency translation.

  Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measure.

  Forward-Looking Statements

  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 and are subject to a number of factors that may cause actual results to differ materially. These 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; actions of competitors; 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 multi-year contracts with governmental entities could be terminated prior to the end of the contract term; the risk in the hiring and retention of qualified personnel; the risk that unexpected costs will be incurred; the risk that subcontractors, software vendors and utility and network providers will not perform in a timely, quality manner; 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; development of new products and services; our ability to protect our intellectual property rights; our ability to expand equipment placements; the risk that individually identifiable

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information of customers, clients and employees could be inadvertently disclosed or disclosed as a result of a breach of our security; service interruptions; interest rates, cost of borrowing and access to credit markets; reliance on third parties, including subcontractors, for manufacturing of products and provision of services; our ability to drive the expanded use of color in printing and copying; the outcome of litigation and regulatory proceedings to which we may be a party; 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 Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014 and our 2013 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The Company 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.

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Media Contacts:

Karen Arena, Xerox, +1-732-407-8510, karen.arena@xerox.com Bill McKee, Xerox, +1-585-423-4476, bill.mckee@xerox.com

Investor Contacts:

Jennifer Horsley, Xerox, +1-203-849-2656, jennifer.horsley@xerox.com Troy Anderson, Xerox, +1-203-849- 2672, troy.anderson@xerox.com

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