<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscaL year ended: November 30, 1996
OR
[] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______________ to _______________
Commission File Number 1-4471
A. Full title of the plan and address of the plan, if different from that of
the issuer named below:
XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Xerox Corporation
P.O. Box 1600
Stamford, Connecticut 06904-1600
1
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the persons who administer the plan have duly caused this annual
report to be signed on its behalf by the undersigned thereunto duly
authorized.
XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN
Patricia M. Nazemetz
Plan Administrator
Stamford, Connecticut
Dated May 27, 1997
2
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Financial Statements and Schedule
November 30, 1996 and 1995
(With Independent Auditors' Report Thereon)
3
<PAGE>
<TABLE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
with Fund Information
November 30, 1996
<CAPTION>
Fund Information
_________________________________________________________________________________________________________________
Small
International Company Xerox Employee
Stock U.S Stock Stock Balanced Income Stock Loan
Fund Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Participant
notes
receivable $ - - - - - - 59,201,070 59,201,070
Investment in
Master Trust 136,379,184 138,676,389 131,146,618 757,250,020 693,889,121 179,548,012 - 2,036,889,344
Total assets 136,379,184 138,676,389 131,146,618 757,250,020 693,889,121 179,548,012 59,201,070 2,096,090,414
Liabilities:
Accrued expenses
and other
liabilities 149,535 40,466 91,219 313,420 165,625 43,108 - 803,373
Due from (to)
other funds 444,179 1,794,007 2,135,881 (1,319,578) (8,100,444) 2,869,821 2,176,134 -
Net assets
available for
plan benefits $136,673,828 140,429,930 133,191,280 755,617,022 685,623,052 182,374,725 61,377,204 2,095,287,041
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
4
<PAGE>
<TABLE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
with Fund Information
November 30, 1995
<CAPTION>
Fund Information
_________________________________________________________________________________________________________________
Small
International Company Xerox Segregated Employee
Stock U.S Stock Stock Balanced Income Stock Assets Loan
Fund Fund Fund Fund Fund Fund Fund Fund Total
(see note 4)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Participant
notes
receivable $ - - - - - - - 55,089,047
55,089,047
Investment in
Master Trust 73,612,588 75,230,057 71,105,345 584,912,455 767,283,041 130,445,603 864,596 -
1,703,453,685
Total assets 73,612,588 75,230,057 71,105,345 584,912,455 767,283,041 130,445,603 864,596 55,089,047
1,758,542,732
Liabilities:
Accrued expenses
and other
liabilities (9,514) 55,601 29,473 474,491 112,074 38,576 - -
700,701
Due from (to)
other funds 91,727 2,807,519 2,213,068 3,637,060 (11,184,917) 1,352,939 - 1,082,604 -
Net assets
available for
plan benefits $73,713,829 77,981,975 73,288,940 588,075,024 755,986,050 131,759,966 864,596 56,171,651
1,757,842,031
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
5
<PAGE>
<TABLE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
with Fund Information
Year ended November 30, 1996
<CAPTION>
Fund Information
_________________________________________________________________________________________________________________
Small
International Company Xerox Segregated Employee
Stock U.S Stock Stock Balanced Income Stock Assets Loan
Fund Fund Fund Fund Fund Fund Fund Fund Total
(see note 4)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Employer $ 5,143,474 7,362,449 4,699,323 21,696,033 11,356,376 7,829,947 - -
58,087,602
Employees'
- - voluntary 9,362,123 12,440,492 10,185,690 36,787,660 28,677,256 12,365,247 - -
109,818,468
Total
contributions 14,505,597 19,802,941 14,885,013 58,483,693 40,033,632 20,195,194 - -
167,906,070
Net income from
Master Trust
investments, net
of administrative
expenses 23,593,622 27,001,873 22,455,809 136,258,719 46,256,022 15,057,165 1,124,757 -
271,747,967
Interest income on
participant notes
receivable - - - - - - - 4,497,685
4,497,685
38,099,219 46,804,814 37,340,822 194,742,412 86,289,654 35,252,359 1,124,757 4,497,685
444,151,722
Benefit
payments (4,847,948) (4,391,021) (3,963,761) (32,199,107) (54,862,143) (6,442,732) - -
(106,706,712)
Transfers among
funds 29,708,728 20,034,162 26,525,279 4,998,693 (101,790,509) 21,805,132 (1,989,353) 707,868 -
Net increase (decrease)
in net assets
available for
plan benefits 62,959,999 62,447,955 59,902,340 167,541,998 (70,362,998) 50,614,759 (864,596) 5,205,553
337,445,010
Net assets available
for plan benefits:
Beginning of
year 73,713,829 77,981,975 73,288,940 588,075,024 755,986,050 131,759,966 864,596 56,171,651
1,757,842,031
End of year $136,673,828 140,429,930 133,191,280 755,617,022 685,623,052 182,374,725 - 61,377,204
2,095,287,041
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
6
<PAGE>
<TABLE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
with Fund Information
Year ended November 30, 1995
<CAPTION>
Fund Information
_________________________________________________________________________________________________________________
Small
International Company Xerox Segregated Employee
Stock U.S Stock Stock Balanced Income Stock Assets Loan
Fund Fund Fund Fund Fund Fund Fund Fund Total
(see note 4)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Employer $ 1,509,983 1,387,801 1,569,077 19,239,174 19,063,717 4,681,935 - - 47,451,687
Employees'
- - voluntary 7,537,090 7,455,412 6,676,232 36,759,920 39,766,636 9,394,117 - - 107,589,407
Total
contributions 9,047,073 8,843,213 8,245,309 55,999,094 58,830,353 14,076,052 - - 155,041,094
Net income from
Master Trust
investments, net
of administrative
expenses 6,053,116 14,407,844 11,494,148 102,880,430 56,404,076 38,105,232 - - 229,344,846
Interest income on
participant notes
receivable - - - - - - - 3,935,432 3,935,432
15,100,189 23,251,057 19,739,457 158,879,524 115,234,429 52,181,284 - 3,935,432 388,321,372
Benefit
payments (3,424,903) (2,689,180) (2,472,416)(38,658,781) (72,667,579) (6,540,282) - - (126,453,141)
Transfers among
funds (3,405,533) 20,348,762 17,133,524 (8,963,445) (5,709,720) 2,394,412 (18,030,356) (3,767,644) -
Transfer from
AMTX, Inc. - - - - 337,197 - - - 337,197
Transfer to
Xerox Corporation
Retirement Income
Guarantee Plan - - - - - - (77,038) - (77,038)
Net increase (decrease)
in net assets
available for
plan
benefits 8,269,753 40,910,639 34,400,565 111,257,298 37,194,327 48,035,414 (18,107,394) 167,788 262,128,390
Net assets available
for plan benefits:
Beginning of
year 65,444,076 37,071,336 38,888,375 476,817,726 718,791,723 83,724,552 18,971,990 56,003,863 1,495,713,641
End of
year $73,713,829 77,981,975 73,288,940 588,075,024 755,986,050 131,759,966 864,596 56,171,651 1,757,842,031
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
7
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
November 30, 1996 and 1995
(1) Description of Plan
The following description of the Xerox Corporation Profit Sharing and
Savings Plan (Plan) provides only general information. Participants
should refer to the Plan document for a more complete description of the
Plan's provisions.
General
The Plan is a defined contribution plan covering substantially all full
and part-time U.S. employees of Xerox Corporation (sponsor) and participating
subsidiaries, except those covered by a collective bargaining agreement
unless that agreement calls for participation in the Plan. Employees are
automatically eligible to participate in the Plan after completing one
year of service.
Payments of Benefits
Upon termination of service, a participant may elect to receive either a
lump sum amount equal to the value of his or her account, or purchase an
annuity payable from a life insurance company. Amounts allocated
to participants who have elected to withdraw from the Plan but have not been
paid are $2,077,252 and $3,525,402 at November 30, 1996 and 1995, respectively.
Employee Savings Contributions
Subject to limits imposed by the Internal Revenue Code, eligible
employees may contribute up to 18% of pay (as defined in the Plan)
through combination of before-tax and after-tax payroll deductions.
(The maximum before-tax contribution for the 1996 calendar year is $9,500.)
Employees are immediately vested in their savings contributions.
Xerox Optional Profit Sharing Contributions
Eligible employees may receive an optional profit sharing contribution
from the Sponsor. The contribution ranges from zero to 10% of pay
and is based upon the return on assets (ROA) of the Xerox Document
Processing industry segment as defined in the Plan document. ROA is
determined as of the sponsor's calendar year-end, which differs from the
November 30 plan year-end.
An employee may receive the contribution in cash or Xerox Corporation common
stock, or may elect to invest all or part of the contribution on a tax deferred
basis, subject to limits imposed by the Internal Revenue Code, through
the Plan's investment funds. Employees are immediately vested in optional
profit sharing contributions.
8
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
(1) Description of Plan (continued)
For the calendar year ended December 31, 1996, the Sponsor's ROA was 17.8%
which will result in an optional profit sharing contribution for the plan year
ending November 30, 1996 for all eligible active employees at December 31, 1996
equal to 10% of pay or $217,033,647. Participants elected to invest
$60,288,722 into the Plan which will be recorded as an employer contribution in
the Plan's financial statements for the plan year ended November 30, 1997.
For the calendar year ended December 31, 1995, the Sponsor's ROA was 18.5%,
which resulted in an optional profit sharing contribution for the plan year
ending November 30, 1995 for all eligible active employees at December 31, 1995
equal to 10% of pay or $230,473,696. Participants elected to invest
$58,087,602 into the Plan which is recorded as an employer contribution in the
Plan's financial statements for the plan year ended November 30, 1996.
Investment Funds
As further described in note 3, the investment funds are part of the Xerox Trust
Agreement to Fund Retirement Plans (Master Trust). Employees can direct their
plan accounts to one or more of the following six investment funds:
International Stock Fund -- Invests primarily in stocks of companies based
outside of the U.S.
U.S. Stock Fund -- Invests primarily in stocks of medium to large U.S.
companies.
Small Company Stock Fund -- Invests primarily in stocks of smaller U.S.
companies that fund managers believe have greater value than indicated by the
current market price, or above average prospects for long-term growth.
Balanced Fund -- Under normal market conditions, invests approximately 70% in
stocks; most of the remainder in bonds; some real estate, private placements,
and cash. The mix may shift with market outlook.
Income Fund -- Invests in contracts with insurance companies and banks; short to
intermediate duration, high-quality bonds.
Xerox Stock Fund -- Invests in Xerox Corporation common stock and some
cash for administrative purposes.
Segregated Assets Fund
This fund was established on April 1, 1991 and represents participant
investments in certain guaranteed investment contracts which are segregated
and frozen. See note 4 to the financial statements for further discussion.
9
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
(1) Description of Plan (continued)
Employee Loan Fund
Participants are permitted to borrow from their profit sharing savings
accounts subject to certain limitations. The loans are payable over terms
up to 14.5 years and bear interest at the quarterly Citibank commercial
prime rate in effect at the time of loan issuance plus 1%. Principal and
interest payments on the loans are redeposited into the participants'
accounts based on their current investment allocation elections. Loans are
issued at market value. At November 30, 1996, market value on loans
approximates fair value.
(2) Federal Income Taxes
The Plan obtained its latest determination letter from the Internal Revenue
Service (IRS) on September 18, 1995, covering Plan amendments through
January 31, 1995, indicating that the Plan, as designed, was in compliance
with the applicable requirements of the Internal Revenue Code. The Plan
administrator and the Plan's internal tax counsel believe that the Plan, as
currently designed and operated, is in compliance with the applicable
requirements of the Internal Revenue Code. Accordingly, they believe that
the Plan was qualified and the related trust was tax-exempt as of the
financial statement date.
As long as the Plan continues to be qualified under present federal income
tax laws and regulations, participants will not be taxed on company
contributions or on investment earnings on such contributions at the time
such contributions and investment earnings are received by the trustee under
the Plan, but may be subject to tax thereon at such time as they receive
distributions under the Plan.
(3) Master Trust
As discussed in note 1, the Plan participates in the Master Trust. The
following other Xerox employee benefit plans also participate in the
Master Trust as of November 30, 1996:
The Profit Sharing Plan of Xerox Corporation and The
Xerographic Division, Union of Needletrades, Industrial
and Textile Employees, A.F.L. - C.I.O. - C.L.C.
Xerox Corporation Retirement Income Guarantee Plan;
Retirement Income Guarantee Plan of Xerox Corporation
and The Xerographic Division,Union of Needletrades,
Industrial and Textile Employees, A.F.L. - C.I.O.-
C.L.C.; and
XDS Investment Plan.
The Master Trust has six investment pools -- the International
Stock Pool, U.S. Stock Pool, Small Company Stock Pool, All Other
Pool, Income Fund, and the Xerox Stock Fund. Participants direct
their accounts into investment funds, as described in note 1, which
are formed from the aforementioned investment pools. Each of
the plans has an ownership interest in one or more of these investment
pools in accordance with that interest as determined by participant
fund elections. In addition, prior to December 31, 1996 there was
a Segregated Assets Fund which is discussed in note 4.
The following financial information is presented for the Master Trust
and each of the Master Trust investment accounts:
10
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(3) Master Trust (continued)
Statement of Net Assets of the Master Trust as of November 30, 1996:
<CAPTION>
Small
International Company Xerox
Stock U.S Stock Stock All Other Income Stock
Pool Pool Pool Pool Fund Fund Total
Assets
<S> <C> <C> <C> <C> <C> <C> <C>
Cash $ 108,596 - - 1,971,597 1,957,053 - 4,037,246
Receivables:
Dividends 1,252,417 2,520,631 152,707 211,754 3 - 4,137,512
Interest 215,445 404,275 554,161 13,108,361 7,705,579 4,289 21,992,110
Due from brokers 2,885,545 2,317,272 10,209,426 10,051,565 12,257,266 - 37,721,074
Total receivables 4,353,407 5,242,178 10,916,294 23,371,680 19,962,848 4,289 63,850,696
Investments
at quoted fair value:
At market value:
Short-term
investments 37,876,365 52,717,245 119,000,779 296,394,084 68,075,236 1,752,922 575,816,631
Fixed income
investments 12,263,211 - - 1,140,116,818 308,267,495 - 1,460,647,524
Equity securities:
Xerox common
stock - - - - - 197,019,053 197,019,053
Other 898,144,054 1,798,935,366 652,074,653 267,795,216 927 - 3,616,950,216
Investments at
contract value:
Investment contracts
with insurance
companies and banks - - - - 634,202,724 - 634,202,724
At estimated fair value:
Interest in real estate
trusts - - - 120,074,113 - - 120,074,113
Other investments - - - 141,816,200 - - 141,816,200
Total
investments 948,283,630 1,851,652,611 771,075,432 1,966,196,431 1,010,546,382 198,771,975 6,746,526,461
Total assets 952,745,633 1,856,894,789 781,991,726 1,991,539,708 1,032,466,283 198,776,264 6,814,414,403
Liabilities
Cash overdraft - 639 - - - - 639
Due to brokers 750,632 4,381,597 7,166,878 34,232,374 20,685,156 4,596,115 71,812,752
Net assets $951,995,001 1,852,512,553 774,824,848 1,957,307,334 1,011,781,127 194,180,149 6,742,601,012
<FN>
</TABLE>
11
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(3) Master Trust (continued)
The allocation of Master Trust investments by investment pool and fund as of November 30,
1996 is as follows:
<CAPTION>
Small
International Company Xerox
Stock U.S Stock Stock Balanced Income Stock
Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
International
Stock Pool $ 144,212,119 - - 807,782,882 - - 951,995,001
U.S. Stock Pool - 145,647,985 - 1,706,864,568 - - 1,852,512,553
Small Company
Stock Pool - - 138,176,064 636,648,784 - - 774,824,848
All Other Pool - - - 1,957,307,334 - - 1,957,307,334
Income Fund - - - - 1,011,781,127 - 1,011,781,127
Xerox Stock Fund - - - - - 194,180,149 194,180,149
Total $ 144,212,119 145,647,985 138,176,064 5,108,603,568 1,011,781,127 194,180,149 6,742,601,012
<FN>
</TABLE>
12
<PAGE>
<TABLE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
(3) Master Trust (continued)
Investments in the Master Trust for all participating plans as of November 30, 1996 are as
follows:
<CAPTION>
Small
International Company Xerox
Stock U.S Stock Stock Balanced Income Stock
Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Xerox Corporation
Profit Sharing
and Savings
Plan $ 136,379,184 138,676,389 131,146,618 757,250,020 693,889,121 179,548,012 2,036,889,344
The Profit Sharing
Plan of Xerox
Corporation and
The Xerographic
Division, Union of
Needletrades, Industrial
and Textile Employes,
A.F.L.-C.I.O
C.L.C. 7,832,935 6,971,596 7,029,446 48,816,602 85,680,794 14,632,137 170,963,510
Xerox Corporation
Retirement Income
Guarantee Plan - - - 3,860,398,301 201,917,419 - 4,062,615,720
Retirement Income
Guarantee Plan of
Xerox Corporation
and The Xerographic
Division, Union of
Needletrades, Industrial
and Textile Employees,
A.F.L.-C.I.O.-
C.L.C. - - - 441,556,944 30,293,793 - 471,850,737
XDS Investment
Plan - - - 581,701 - - 581,701
Total $ 144,212,119 145,647,985 138,176,064 5,108,603,568 1,011,781,127 194,180,149 6,742,601,012
<FN>
</TABLE>
13
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(3) Master Trust (continued)
Statement of Net Assets of the Master Trust as of November 30, 1995:
<CAPTION>
Small
International Company Xerox Segregated
Stock U.S Stock Stock All Other Income Stock Assets
Pool Pool Pool Pool Fund Fund Fund Total
Assets (see note 4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receivables:
Dividends $ 698,388 951,310 153,069 554,383 - 754,349 -
3,111,499
Interest 338,037 381,209 192,981 10,093,759 7,869,209 1,929 -
18,877,124
Due from brokers 4,232,947 11,272,276 1,602,820 70,751,303 21,414,712 - -
109,274,058
Total receivables 5,269,372 12,604,795 1,948,870 81,399,445 29,283,921 756,278 -
131,262,681
Investments
at fair value:
At quoted market value:
Short-term
investments 14,959,661 50,261,165 35,589,654 188,143,760 45,129,459 506,921 -
334,590,620
Fixed income
investments 8,948,937 10,355,388 - 809,199,571 281,135,924 - -
1,109,639,820
Equity securities:
Xerox common
stock - - - - - 139,634,250 -
139,634,250
Other 728,766,550 1,271,544,615 547,487,444 686,264,675 - - -
3,234,063,284
Investments at
contract value:
Investment contracts
with insurance
companies and banks - - - - 755,908,409 - 1,269,049
757,177,458
At estimated fair value:
Interest in real estate
trusts - - - 147,958,900 - - -
147,958,900
Other investments - - - 112,288,466 - - -
112,288,466
Total
investments 752,675,148 1,332,161,168 583,077,098 1,943,855,372 1,082,173,792 140,141,171 1,269,049
5,835,352,798
Total assets 757,944,520 1,344,765,963 585,025,968 2,025,254,817 1,111,457,713 140,897,449 1,269,049
5,966,615,479
Liabilities
Cash overdraft - 66 13 109,973 - - -
110,052
Due to brokers 10,932,258 19,692,289 4,030,794 98,607,735 3,436,720 1,717,850 -
138,417,646
Net assets $747,012,262 1,325,073,608 580,995,161 1,926,537,109 1,108,020,993 139,179,599 1,269,049
5,828,087,781
<FN>
</TABLE>
14
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(3) Master Trust (continued)
The allocation of Master Trust investments by investment pool and fund as of November 30,
1995 is as follows:
<CAPTION>
Small
International Company Xerox Segregated
Stock U.S Stock Stock Balanced Income Stock Assets
Fund Fund Fund Fund Fund Fund Fund Total
(see note 4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
International
Stock Pool $ 77,482,237 - - 669,530,025 - - - 747,012,262
U.S. Stock Pool - 78,184,642 - 1,246,888,966 - - - 1,325,073,608
Small Company
Stock Pool - - 74,130,432 506,864,729 - - - 580,995,161
All Other Pool - - - 1,926,537,109 - - - 1,926,537,109
Income Fund - - - - 1,108,020,993 - - 1,108,020,993
Xerox Stock Fund - - - - - 139,179,599 - 139,179,599
Segregated Assets
Fund - - - - - - 1,269,049 1,269,049
Total $ 77,482,237 78,184,642 74,130,432 4,349,820,829 1,108,020,993 139,179,599 1,269,049 5,828,087,781
<FN>
</TABLE>
15
<PAGE>
<TABLE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
(3) Master Trust (continued)
Investments in the Master Trust for all participating plans as of November 30, 1995 are as
follows:
<CAPTION>
Small
International Company Xerox Segregated
Stock U.S Stock Stock Balanced Income Stock Assets
Fund Fund Fund Fund Fund Fund Fund Total
(see note 4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Xerox Corporation
Profit Sharing
and Savings
Plan $ 73,612,588 75,230,057 71,105,345 584,912,455 767,283,041 130,445,603 864,596
1,703,453,683
The Profit Sharing
Plan of Xerox
Corporation and
The Xerographic
Division, Union of
Needletrades, Industrial
and Textile Employes,
A.F.L.-C.I.O
C.L.C. 3,869,649 2,954,585 3,025,087 37,830,372 95,765,469 8,733,996 85,695
152,264,853
Xerox Corporation
Retirement Income
Guarantee Plan - - - 3,324,141,518 213,746,813 - 279,767
3,538,168,098
Retirement Income
Guarantee Plan of
Xerox Corporation
and The Xerographic
Division, Union of
Needletrades, Industrial
and Textile Employees,
A.F.L.-C.I.O.-
C.L.C. - - - 402,496,038 31,225,670 - 38,991
433,760,699
XDS Investment
Plan - - - 440,446 - - -
440,446
Total $ 77,482,237 78,184,642 74,130,432 4,349,820,829 1,108,020,993 139,179,599 1,269,049
5,828,087,781
<FN>
</TABLE>
16
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(3) Master Trust (continued)
Statement of Changes in Net Assets of the Master Trust for the year ended November 30, 1996:
<CAPTION>
Small
International Company Xerox Segregated
Stock U.S Stock Stock All Other Income Stock Assets
Pool Pool Pool Pool Fund Fund Fund
Total
(see note 4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions:
Transfers in $17,667,117 23,361,582 17,871,703 161,169,556 60,773,598 25,410,969 -
306,254,525
Investment earnings:
Interest 1,758,465 7,472,177 5,385,918 77,829,819 70,882,808 56,938 1,615,842
165,001,967
Dividends 11,536,790 64,246,861 8,676,627 27,587,944 3 3,160,301 -
115,208,526
Net App(Dep) 189,455,864 268,707,939 133,179,213 203,226,626 (2,182,375) 12,868,904 -
805,256,171
Margin Var. on
futures
contracts (40,828) 17,959,290 9,297,242 9,725,636 267,516 - -
37,208,856
Other 552,365 101,265 216,690 2,267,517 92,908 5,553 -
3,236,298
Total investment
earnings 203,262,656 358,487,532 156,755,690 320,637,542 69,060,860 16,091,696 1,615,842
1,125,911,818
Total Additions 220,929,773 381,849,114 174,627,393 481,807,098 129,834,458 41,502,665 1,615,842
1,426,166,343
Deductions:
Administrative
Expense 6,299,902 2,155,352 3,106,127 13,317,170 1,907,429 112,269 -
26,898,249
Transfer out 6,804,169 6,451,303 5,757,577 325,123,111 135,023,860 11,624,843 -
490,754,863
Total deductions 13,104,071 8,606,655 8,833,704 338,440,281 136,931,289 11,737,112 -
517,653,112
Transfers between
funds/pools (2,842,963) 154,196,486 28,035,998 (112,596,592) (89,143,035) 25,234,997 (2,884,891) -
Net assets:
Beginning of
year 747,012,262 1,325,073,608 580,995,161 1,926,537,109 1,108,020,993 139,179,599 1,269,049
5,828,087,781
End of year $ 951,995,001 1,852,512,553 774,824,848 1,957,307,334 1,011,781,127 194,180,149 -
6,742,601,012
</TABLE>
17
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(3) Master Trust (continued)
The allocation of net income from Master Trust investments, net of administrative
expenses, by investment pool and fund for the year ended November 30, 1996 is as
follows:
<CAPTION>
Small
International Company Xerox Segregated
Stock U.S Stock Stock Balanced Income Stock Asset
Fund Fund Fund Fund Fund Fund Fund
Total
<S> <C> <C> <C> <C> <C> <C> <C>
International
Stock Pool $25,038,377 - - 171,924,377 - - -
196,962,754
U.S. Stock Pool - 28,282,250 - 328,049,930 - - -
356,332,180
Small Company
Stock Pool - - 23,630,507 130,019,056 - - -
153,649,563
All Other Pool - - - 307,320,372 - - 1,615,842
307,320,372
Income Fund - - - - 67,153,431 - -
68,769,273
Xerox Stock Fund - - - - - 15,979,427 -
15,979,427
Total $25,038,377 28,282,250 23,630,507 937,313,735 67,153,431 15,979,427 1,615,842
1,099,013,569
<FN>
</TABLE>
18
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(3) Master Trust (continued)
Net income from Master Trust investments, net of administrative expenses for all participating
plans for the year ended November 30, 1996:
<CAPTION>
Small
International Company Xerox Segregated
Stock U.S Stock Stock Balanced Income Stock Asset
Fund Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Xerox Corporation
Profit Sharing and
Savings Plan* $23,752,671 26,986,737 22,517,556 136,097,648 46,800,658 15,061,698 1,124,757 272,341,725
The Profit Sharing
Plan of Xerox
Corporation and The
Xerographic Division,
Union of Needletrades,
Industrial and Textile
Employees, A.F.L.-C.I.O.-
C.L.C. 1,285,706 1,295,513 1,112,951 8,689,527 5,525,723 917,729 135,231 18,962,380
Xerox Corporation
Retirement Income
Guarantee Plan - - - 710,218,766 13,001,192 - 330,112 723,550,070
Retirement Income
Guarantee Plan of
Xerox Corporation
and The Xerographic
Division, Union of
Needletrades, Industrial
and Textile Employees,
A.F.L.-C.I.O.
C.L.C. - - - 82,206,637 1,825,858 - 25,742 84,058,237
XDS Investment Plan - - - 101,157 - - - 101,157
Total $ 25,038,377 28,282,250 23,630,507 937,313,735 67,153,431 15,979,427 1,615,842 1,099,013,569
<FN>
* The above allocation of investment results, net of administrative expenses, is at the Master
Trust level. This allocation differs from the amounts reported in the statement of changes in net
assets available for plan benefits due to the impact of investment manager expenses accrued at the
Plan level.
</TABLE>
19
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(3) Master Trust (continued)
Statement of Changes in Net Assets of the Master Trust for the year ended November 30, 1995
is as follows:
<CAPTION>
Small
International Company Xerox Segregated
Stock U.S Stock Stock All Other Income Stock Assets
Pool Pool Pool Pool Fund Fund Fund
Total
(see note 4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions:
Transfers in $11,203,070 10,647,422 9,889,067 85,878,768 84,155,229 17,685,297 -
219,458,853
Investment earnings:
Interest 770,531 3,528,423 2,776,738 76,856,014 74,729,139 76,567 -
157,737,412
Dividends 10,025,054 38,515,695 11,517,423 24,966,258 - 2,953,609 -
87,978,039
Net App(Dep) 58,941,923 271,364,157 102,753,507 224,463,457 8,921,130 37,632,740 -
704,076,914
Margin Variation 1,028,520 - - 24,311,485 (161,741) - -
25,178,264
Other 177,235 31,509 167,756 860,675 34,868 2,867 -
1,274,910
Total investment
earnings 70,943,263 313,439,784 117,215,424 351,457,889 83,523,396 40,665,783 -
977,245,539
Total Additions 82,146,333 324,087,206 127,104,491 437,336,657 167,678,625 58,351,080 -
1,196,704,392
Deductions:
Administrative
Expense 5,498,273 4,104,929 3,358,532 14,784,130 2,519,253 123,498 -
30,388,615
Transfer out 4,762,702 3,679,415 3,354,142 352,038,038 168,483,364 10,173,220 -
542,490,881
Total deductions 10,260,975 7,784,344 6,712,674 366,822,168 171,002,617 10,296,718 -
572,879,496
Transfers between
funds/pools (41,175,868) 98,390,567 (199,879,397) 105,200,242 59,242,812 4,638,985 (26,417,341) -
Transfer from
AMTX, Inc. - - - - 441,916 - -
441,916
Net assets:
Beginning of
year 716,302,772 910,380,179 660,482,741 1,750,822,378 1,051,660,257 86,486,252 27,686,390
5,203,820,969
End of year $747,012,262 1,325,073,608 580,995,161 1,926,537,109 1,108,020,993 139,179,599 1,269,049
5,828,087,781
</TABLE>
20
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(3) Master Trust (continued)
The allocation of net income from Master Trust investments, net of administrative
expenses, by investment pool and fund for the year ended November 30, 1995 is as
follows:
<CAPTION>
Small
International Company Xerox
Stock U.S Stock Stock Balanced Income Stock
Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
International
Stock Pool $6,256,251 - - 59,188,739 - - 65,444,990
U.S. Stock Pool - 14,942,724 - 294,392,131 - - 309,334,855
Small Company
Stock Pool - - 11,888,984 101,967,908 - - 113,856,892
All Other Pool - - - 336,673,759 - - 336,673,759
Income Fund - - - - 81,004,143 - 81,004,143
Xerox Stock Fund - - - - - 40,542,284 40,542,284
Total $6,256,251 14,942,724 11,888,984 792,222,537 81,004,143 40,542,284 946,856,923
<FN>
</TABLE>
21
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(3) Master Trust (continued)
Net income from Master Trust investments, net of administrative expenses for all participating
plans for the year ended November 30, 1995:
<CAPTION>
Small
International Company Xerox
Stock U.S Stock Stock Balanced Income Stock
Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Xerox Corporation
Profit Sharing and
Savings Plan* $5,971,976 14,428,298 11,478,711 102,705,332 56,018,591 38,089,557 228,692,465
The Profit Sharing
Plan of Xerox
Corporation and The
Xerographic Division,
Union of Needletrades,
Industrial and Textile
Employees, A.F.L.-C.I.O.-
C.L.C. 284,275 514,426 410,273 6,531,337 6,937,779 2,452,727 17,130,817
Xerox Corporation
Retirement Income
Guarantee Plan - - - 608,237,890 15,767,773 - 624,005,663
Retirement Income
Guarantee Plan of
Xerox Corporation
and The Xerographic
Division, Union of
Needletrades, Industrial
and Textile Employees,
A.F.L.-C.I.O.
C.L.C. - - - 74,686,415 2,280,000 - 76,966,415
XDS Investment Plan - - - 61,563 - - 61,563
Master Trust
investment
income, net of
administrative
expenses $6,256,251 14,942,724 11,888,984 792,222,537 81,004,143 40,542,284 946,856,923
<FN>
* The above allocation of investment results, net of administrative expenses, is at the Master
Trust level. This allocation differs from the amounts reported in the statement of changes in net
assets available for plan benefits due to the impact of investment manager expenses accrued at the
Plan level.
</TABLE>
>
22
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
(3) Master Trust (continued)
Master Trust investments are managed by selected investment
managers under the direction of the Treasurer of Xerox Corporation.
The Finance Committee of the Xerox Corporation Board of Directors
is responsible for establishing investment guidelines, reviewing the
investment decisions of the Treasurer and reviewing the investment results
of the Master Trust. The Finance Committee of the Xerox Corporation
Board of Directors consists, at present, of five members of the Xerox
Corporation Board of Directors, none of whom are officers of Xerox
Corporation.
Marketable securities are valued at the last reported sales price on the last
business day of the year. Quotations are obtained from national securities
exchanges or, in instances where securities are not listed on any of the
exchanges, quotations are obtained from brokerage firms.
Non-readily marketable investments which include private placements are
carried at fair value, based upon the cost of the investments, developments
concerning the portfolio investments of the private placements, and other
factors as the managing general partners of these investments may deem
relevant. The valuations do not necessarily represent amounts which might
ultimately be realized from the investments.
private placements
Securities and trust funds that are not readily marketable are valued based
on comparisons to yields of issues of similar quality and maturities.
The value of the investment contracts with insurance companies and banks
is at contract value, which approximates fair value. In connection with the
investment contracts, all of which are fully benefit-responsive, the following
information is presented:
(i) The average investment yields for the years ended November 30, 1996 and
1995 were 6.5% and 6.9% respectively.
(ii) The crediting interest rates at November 30, 1996 and 1995 ranged from
5.0% to 9.3%.
(iii) The fair value, as determined by discounting estimated future cash flows
for traditional GIC's and the market value of the underlying investments,
for synthetic GIC's, at November 30, 1996 and 1995 was approximately
$641,588,033 and $767,473,688, respectively. Contract
values were $634,202,724 and $757,177,458 at November 30, 1996 and 1995,
respectively.
The Master Trust invests in real estate investment trusts. These trusts
provide pension and profit sharing plans with a medium for pooling their funds
for investment in income producing real estate. The investment trusts value
real estate holdings at estimated market value based upon independent
appraisals, consideration of significant changes in economic circumstances, and
capital additions made to properties after the appraisal date. Such market
value estimates necessarily involve subjective judgments. Accordingly, the
actual market price of the real estate can only be determined by negotiation
between independent third parties in a sales transaction.
Purchases and sales of securities are recorded on a trade date basis. Dividend
income is recorded on the ex-dividend date. Interest income is recorded
as earned. Margin variation represents market fluctuations on future
investments.
23
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
Derivative financial instruments are used by the Master Trust's equity and
balanced portfolio investment managers primarily to rebalance the fixed
income/equity allocation of the Master Trust's portfolio and to hedge the
currency risk component of the Master Trust's foreign investments. Certain
of the Master Trust's fixed income investment managers are permitted to use
certain specified types of derivative instruments as part of their respective
strategies. These strategies include the use of futures and options as
substitutes for certain types of fixed income securities. Leveraging of the
Master Trust's assets and speculation are prohibited. Currency hedge positions
are not permitted to exceed the level of exposure in the related Master Trust's
assets.
The derivatives most commonly used by the investment managers are highly liquid
exchange traded equity and fixed income futures and over-the-counter foreign
exchange forward contracts. The use of derivative instruments is not
believed to materially increase the credit or market risk of the Master Trust's
investment.
<TABLE>
The net appreciation (depreciation) of investments for the year ended
November 30, 1996 is as follows:
<CAPTION>
U.S. Small
International Stock Company All Other Income Xerox
Stock Pool Pool Stock Pool Pool Fund Stock Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at
quoted market value:
Short-term and fixed
income investments $ (243,957) 403,718 - 28,170,610 (2,182,375) - 26,147,996
Xerox common stock - - - - - 12,868,904 12,868,904
Other equity investments 189,699,821 268,304,221 133,179,213 120,369,414 - - 711,552,669
Investments at estimated
fair value:
Real estate - - - (9,667,515) - - (9,667,515)
Other investments - - - 64,354,117 - - 64,354,117
Total $189,455,864 268,707,939 133,179,213 203,226,626 (2,182,375) 12,868,904 805,256,171
24
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<FN>
</TABLE>
<TABLE>
The net appreciation (depreciation) of investments for the year ended
November 30, 1995 is as follows:
<CAPTION>
U.S. Small
International Stock Company All Other Income Xerox
Stock Pool Pool Stock Pool Pool Fund Stock Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at
fair value:
Short-term and fixed
income investments $ (65,138) 2,014,943 - 51,373,186 8,921,130 - 62,244,121
Xerox common stock - - - - - 37,632,740 37,632,740
Other equity investments 59,007,061 269,349,214 102,753,507 144,946,924 - - 576,056,706
Investments at estimated
fair value:
Real estate trust
interests - - - 3,810,760 - - 3,810,760
Other investments - - - 24,332,587 - - 24,332,587
Total $ 58,941,923 271,364,157 102,753,507 224,463,457 8,921,130 37,632,740 704,076,914
There are no investments in the Plan that represent 5% or more of Master Trust net assets.
Other investment consist primarily of private placement limited partnerships.
</TABLE>
(4) Segregated Assets Fund - Investment Contracts with Executive
Life Insurance Company
On April 11, 1991, the California Department of Insurance (CDI) took
over Executive Life Insurance Company (ELIC) citing a "serious danger
of insolvency" and temporarily suspended all payments on Guaranteed
Investment Contracts (GICs) issued by ELIC. Effective April 1, 1991,
in order to treat all participants fairly, $66 million was transferred
into a Segregated Assets Fund.
Through November 30, 1996, the Xerox retirement and savings plans have
received $65.5 million in payments related to the ELIC investments
These payments represent the recovery of 100% of each participant's
original investment plus $1.6 million in interest. Should Xerox receive
additional payments from ELIC for unrecognized interest income associated
with the original GIC's, the proceeds will be allocated to those
participants originally invested in ELIC based upon their percent
interest on April 11, 1991. All proceeds will be recorded through
the income fund and transferred to other funds based on a participant's
allocation elections at the time of receipt.
25
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
(5) Unit Values
The interests of Plan participants in each of the funds is expressed
in terms of units, representing undivided interests in the net assets
of the fund. Unit value is calculated monthly by dividing the total
value of net assets of each fund (reduced by employer contributions
receivable not yet received by the Master Trust, by unaccrued benefit
payments and other reconciling items) by units outstanding at the
valuation date.
<TABLE>
The total number of units and net asset value per unit outstanding at month-end during
the year ended November 30, 1996 was as follows:
<CAPTION>
International Fund U.S Stock Fund Small Co. Fund Balanced Fund Income Fund Xerox Stock Fund
Units Unit Units Unit Units Unit Units Unit Units Unit Units Unit
Outstanding Value Outstanding Value Outstanding Value Outstanding Value Outstanding Value Outstanding Value
<S><C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31:
61,795,806 $1.247564 60,026,532 $1.340973 55,085,964 $1.351324 51,224,934$11.765868 124,318,691 $6.130939 21,394,017
$6.189449
January 31:
62,382,157 1.293327 61,949,688 1.384301 56,320,966 1.342293 51,462,675 12.002653 122,754,641 6.167616 21,814,069
5.599330
February 28:
65,714,223 1.305984 65,078,404 1.398004 57,683,878 1.399105 52,077,595 12.105990 121,118,697 6.185017 23,442,405
5.926790
March 31:
69,908,614 1.345844 71,016,923 1.410330 58,160,173 1.451021 52,443,617 12.315363 117,012,099 6.204795 23,942,955
5.703779
April 30:
76,839,969 1.380051 79,049,752 1.425851 62,190,910 1.547702 54,307,056 12.556639 117,123,296 6.229090 24,929,008
6.669084
May 31:
81,463,488 1.388665 81,502,643 1.457879 66,205,558 1.606726 54,419,516 12.757811 114,645,872 6.258788 24,844,135
7.166556
June 30:
84,965,509 1.403904 82,646,827 1.459497 72,117,763 1.547776 54,152,325 12.786097 111,463,002 6.299196 25,138,171
7.354894
July 31:
87,411,236 1.346170 83,539,982 1.387785 75,583,671 1.432424 54,133,948 12.344405 109,615,217 6.332220 25,291,962
6.928447
August 31:
88,046,503 1.376319 83,529,506 1.421710 76,828,681 1.527109 53,983,112 12.648546 108,953,692 6.366458 25,486,220
7.543459
September 30:
88,945,855 1.420495 83,029,325 1.508419 77,873,140 1.605861 53,949,993 13.201415 107,845,121 6.411511 25,708,519
7.415021
October 31:
90,193,238 1.436266 83,002,657 1.544068 77,837,161 1.606247 53,937,896 13.398674 107,656,305 6.461901 25,874,302
6.410834
November 30:
90,181,655 1.511053 83,361,927 1.664017 77,968,283 1.681941 53,767,635 14.089010 106,860,617 6.501211 26,550,199
6.766386
<FN>
</TABLE>
26
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(5) Unit Values (continued)
The total number of units and net asset value per unit outstanding at month-end during
the year ended November 30, 1995 was as follows:
<CAPTION>
International Fund U.S Stock Fund Small Co. Fund Balanced Fund Income Fund Xerox Stock Fund
Units Unit Units Unit Units Unit Units Unit Units Unit Units Unit
Outstanding Value Outstanding Value Outstanding Value Outstanding Value Outstanding Value Outstanding Value
<S><C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31:
60,179,365 $1.071812 37,773,639 $1.004469 36,690,812 $1.087985 50,770,096 $9.492493 127,633,672 $5.675950 19,452,258
$4.367397
January 31:
60,918,573 1.014148 38,136,110 1.028614 37,916,082 1.075133 50,336,147 9.469626 126,443,369 5.714529 19,906,359
4.823003
February 28:
60,355,342 1.014879 38,523,405 1.066364 38,579,023 1.110750 49,787,004 9.722490 126,340,743 5.752417 20,183,338
4.925137
March 31:
59,265,445 1.037801 39,886,643 1.091979 39,875,075 1.146890 49,492,114 9.932212 128,700,201 5.787098 20,253,326
5.223549
April 30:
59,757,540 1.073252 42,605,238 1.117010 41,842,797 1.168077 50,849,044 10.153442 133,055,469 5.823086 21,157,657
5.479653
May 31:
59,157,334 1.097675 44,708,195 1.156870 42,787,760 1.184615 50,599,607 10.431708 133,079,193 5.872766 21,500,659
5.071456
June 30:
59,061,311 1.103583 47,239,526 1.183081 44,598,384 1.242418 50,489,636 10.640895 132,166,538 5.907832 21,626,823
5.239795
July 31:
59,589,319 1.177333 48,392,446 1.220332 45,029,655 1.315199 50,406,023 11.010881 131,346,391 5.938496 21,508,568
5.334043
August 31:
59,851,776 1.166430 51,229,145 1.226032 46,283,955 1.338410 50,659,319 11.078072 130,009,224 5.975351 21,393,739
5.434081
September 30:
60,390,250 1.194367 53,097,498 1.268196 48,525,206 1.369462 50,657,887 11.333167 128,432,861 6.006915 21,073,681
6.033618
October 31:
61,270,010 1.181537 55,792,291 1.256582 51,361,648 1.302074 50,832,431 11.205960 127,391,276 6.047463 20,901,315
5.824325
November 30:
61,395,203 1.200176 57,454,326 1.310284 53,063,815 1.341111 50,871,423 11.509480 125,383,818 6.088388 21,155,151
6.193365
The Segregated Assets Fund had 2,584,689 units outstanding and a net asset value of
$864,596 at November 30, 1995.
</TABLE>
27
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
<TABLE>
(6) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for plan benefits per the
financial statements to the Form 5500:
November 30
1996 1995
Net assets available for plan benefits as
reported in the Plan financial statements $2,095,287,041 1,757,842,031
Benefit claims payable reported on line 31g
of Form 5500 (2,077,252) (3,525,402)
Net assets available for plan benefits as
reported in the Plan Form 5500 $2,093,209,789 1,754,316,629
The reconciliation of benefits paid per the financial statements to the Form 5500:
<CAPTION>
November 30
1996 1995
<S> <C> <C>
Benefits paid to participants as reported in the
Plan financial statements $106,706,712 126,453,141
Add: Amounts allocated to withdrawing
participants at November 30 2,077,252 3,525,402
Less: Amounts allocated to withdrawing
participants at November 30, 1996 and 1995,
respectively (3,525,402) (4,975,553)
Benefits paid to participants as reported in the
Form 5500 $105,258,562 125,002,990
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit
claims that have been processed and approved for payment prior to November 30 but not yet
paid as of that date.
</TABLE>
28
<PAGE>
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
(7) AMTX, Inc.
AMTX, Inc.is a wholly-owned subsidiary of Xerox Corporation. Effective
January 1, 1995, the AMTX, Inc. Employees' Retirement Plan was terminated,
and employees' balances were transferred into the Xerox Corporation Profit
Sharing and Savings Plan. These employees are now participants in the Plan.
(8) Stock Split
In May 1996, the shareholders approved a three-for-one stock split of the
Company's common stock. The stock split does not impact participants'
interest in the Xerox Stock Fund.
29
<PAGE>
<TABLE>
Schedule 1
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
November 30, 1996
<CAPTION>
Description of investment
including
Identity of issuer, borrower, maturity date, rate of interest, Historical Cost Current Value
lessor, or similar party collateral, par or maturity value
<S> <S> <C> <C>
Investment in Master Trust See Note 3. $1,760,440,965 $2,036,889,344
Investment in Participant Loans to Plan participants,
Loans Receivable maturity dates through 5/31/09,
interest rates from 7.0% to
11.5% per annum. - 59,201,070
<FN>
</TABLE>
30
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Plan Administrator and Participants of Xerox Corporation Profit Sharing
and Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Xerox Corporation Profit Sharing and Savings Plan (Plan) as of
November 30, 1996 and 1995, and the related statements of changes in net
assets available for plan benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of November 30, 1996 and 1995, and the changes in net assets available
for plan benefits for the years then ended in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes is presented for purpose of additional analysis
and is not a required part of the basic financial statements, but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets
available for plan benefits and the statements of changes in net assets
available for plan benefits is presented for purposes of additional analysis
rather than to present the net assets available for plan benefits and changes
in the assets available for plan benefits of each fund. The supplemental
schedule and fund information have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
KPMG PEAT MARWICK LLP
Rochester, New York
April 30, 1997
31
<PAGE>
EXHIBIT INDEX
Electronic
Submission
Exhibit Document
(b)(1) Accountants' Consent 2
<PAGE>
ACCOUNTANTS' CONSENT
The Board of Directors
Xerox Corporation:
We consent to incorporation by reference in the Registration Statements
(No. 2-86274 and No. 333-22059) on Form S-8 of Xerox Corporation of our
report dated April 30, 1997, relating to the statements of net assets
available for plan benefits of the Xerox Corporation Profit Sharing and
Savings Plan as of November 30, 1996 and 1995, and the related statements
of changes in net assets available for plan benefits for the years then
ended and related schedule, which report appears in the November 30,
1996 Annual Report on Form 11-K of the Xerox Corporation Profit Sharing
and Savings Plan.
KPMG PEAT MARWICK LLP
Rochester, New York
May 27, 1997
