<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, 1997
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
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 29, 1998
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Financial Statements and Schedules
December 31, 1997 and
November 30, 1997 and 1996
(With Independent Auditors' Report Thereon)
2
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
With Fund Information
December 31, 1997
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Assets:
Investment in
Master Trust $ 165,404,600 245,871,622 201,085,797 937,212,155
Participant notes
receivable - - - -
Employer
contributions
receivable 5,211,957 11,918,762 7,494,196 23,598,210
Total assets 170,616,557 257,790,384 208,579,993 960,810,365
Liabilities:
Accrued expenses and
other
liabilities 302,084 183,643 263,655 891,305
Due from (to) other
funds (5,850,276) 768,616 (2,026,538) (135,363)
Due from (to) other
plans (4) 7,172 6,306 76,807
Net assets available
for plan
benefits $ 164,464,193 258,382,529 206,296,106 959,860,504
The accompanying notes are an integral part of the financial
statements.
3
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
635,611,631 311,118,588 - 2,496,304,393
- - 66,182,431 66,182,431
6,747,587 13,248,905 - 68,219,617
642,359,218 324,367,493 66,182,431 2,630,706,441
485,774 17,982 - 2,144,443
976,048 6,267,513 - -
37,083 289,823 - 417,187
642,886,575 330,906,847 66,182,431 2,628,979,185
4
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
With Fund Information
November 30, 1997
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Assets:
Investment in
Master Trust $ 166,221,445 238,536,887 201,094,208 928,099,095
Participant notes
receivable - - - -
Total assets 166,221,445 238,536,887 201,094,208 928,099,095
Liabilities:
Accrued expenses
and other
liabilities 132,804 84,380 146,996 458,427
Due from (to) other
funds ( 4,886,292) 2,048,501 858,350 (2,341,145)
Net assets available
for plan
benefits $ 161,202,349 240,501,008 201,805,562 925,299,523
The accompanying notes are an integral part of the financial
statements.
5
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
637,540,756 319,238,274 - 2,490,730,665
- - 64,417,177 64,417,177
637,540,756 319,238,274 64,417,177 2,555,147,842
173,228 29,226 - 1,025,061
(4,955,175) 6,778,874 2,496,887 -
632,412,353 325,987,922 66,914,064 2,554,122,781
6
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
With Fund Information
November 30, 1996
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Assets:
Investment in
Master Trust $ 136,379,184 138,676,389 131,146,618 757,250,020
Participant notes
receivable - - - -
Total assets 136,379,184 138,676,389 131,146,618 757,250,020
Liabilities:
Accrued expenses and
other
liabilities 149,535 40,466 91,219 313,420
Due from (to) other
funds 444,179 1,794,007 2,135,881 (1,319,578)
Net assets available
for plan
benefits $ 136,673,828 140,429,930 133,191,280 755,617,022
The accompanying notes are an integral part of the financial
statements.
7
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
693,889,121 179,548,012 - 2,036,889,344
- - 59,201,070 59,201,070
693,889,121 179,548,012 59,201,070 2,096,090,414
165,625 43,108 - 803,373
(8,100,444) 2,869,821 2,176,134 -
685,623,052 182,374,725 61,377,204 2,095,287,041
8
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
With Fund Information
For the one month period ending December 31, 1997
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Contributions:
Employees' -
voluntary $ 629,356 1,080,399 826,091 2,053,150
Employer 5,215,329 11,919,954 7,492,719 23,644,704
Total
contributions 5,844,685 13,000,353 8,318,810 25,697,854
Net income (loss) from
Master
Trust investments,
net of
administrative
expenses 3,493,132 4,312,537 (1,620,555) 10,591,873
Interest income on
participant
notes receivable - - - -
9,337,817 17,312,890 6,698,255 36,289,727
Benefit payments (377,094) (413,353) (359,371) (2,103,136)
Transfers among funds ( 5,698,875) 974,812 (1,854,646) 297,583
Transfer among plans (4) 7,172 6,306 76,807
Net increase
(decrease)
in net assets
available
for plan benefits 3,261,844 17,881,521 4,490,544 34,560,981
Net assets available
for plan
benefits:
Beginning of
period 161,202,349 240,501,008 201,805,562 925,299,523
End of
period $ 164,464,193 258,382,529 206,296,106 959,860,504
The accompanying notes are an integral part of the financial
statements.
9
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
1,118,128 1,137,866 - 6,844,990
6,772,456 13,174,455 - 68,219,617
7,890,584 14,312,321 - 75,064,607
4,094,269 (15,103,176) - 5,768,080
- - 454,887 454,887
11,984,853 (790,855) 454,887 81,287,574
(2,783,365) (812,038) - (6,848,357)
1,235,651 6,231,995 (1,186,520) -
37,083 289,823 - 417,187
10,474,222 4,918,925 (731,633) 74,856,404
632,412,353 325,987,922 66,914,064 2,554,122,781
642,886,575 330,906,847 66,182,431 2,628,979,185
10
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
With Fund Information
Year ended November 30, 1997
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Contributions:
Employees' -
voluntary $ 11,906,142 16,296,309 13,832,494 37,300,231
Employer 6,372,983 8,694,916 8,756,190 20,481,148
Total
contributions 18,279,125 24,991,225 22,588,684 57,781,379
Net income from Master
Trust
investments, net of
administrative
expenses 11,853,952 48,065,924 31,281,399 145,978,704
Interest income on
participant
notes receivable - - - -
30,133,077 73,057,149 53,870,083 203,760,083
Benefit payments (7,289,327) (6,860,379) (6,287,499) (39,825,077)
Transfers among funds 1,684,771 33,874,308 21,031,698 5,224,612
Transfer from XDS
Savings Plan - - - 522,883
Net increase
(decrease)
in net assets
available
for plan benefits 24,528,521 100,071,078 68,614,282 169,682,501
Net assets available
for plan
benefits:
Beginning of
year 136,673,828 140,429,930 133,191,280 755,617,022
End of year $ 161,202,349 240,501,008 201,805,562 925,299,523
The accompanying notes are an integral part of the financial
statements.
11
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
22,980,521 15,571,159 - 117,886,856
7,750,410 8,332,412 - 60,388,059
30,730,931 23,903,571 - 178,274,915
44,780,652 112,250,036 - 394,210,667
- - 5,240,416 5,240,416
75,511,583 136,153,607 5,240,416 577,725,998
(48,793,032) (10,357,827) - (119,413,141)
(79,929,250) 17,817,417 296,444 -
- - - 522,883
(53,210,699) 143,613,197 5,536,860 458,835,740
685,623,052 182,374,725 61,377,204 2,095,287,041
632,412,353 325,987,922 66,914,064 2,554,122,781
12
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
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Contributions:
Employees' -
voluntary $ 9,362,123 12,440,492 10,185,690 36,787,660
Employer 5,143,474 7,362,449 4,699,323 21,696,033
Total
contributions 14,505,597 19,802,941 14,885,013 58,483,693
Net income from Master
Trust
investments, net of
administrative
expenses 23,593,622 27,001,873 22,455,809 136,258,719
Interest income on
participant
notes receivable - - - -
38,099,219 46,804,814 37,340,822 194,742,412
Benefit payments (4,847,948) (4,391,021) (3,963,761) (32,199,107)
Transfers among funds 29,708,728 20,034,162 26,525,279 4,998,693
Net increase
(decrease)
in net assets
available
for plan
benefits 62,959,999 62,447,955 59,902,340 167,541,998
Net assets available
for plan
benefits:
Beginning of year 73,713,829 77,981,975 73,288,940 588,075,024
End of year $136,673,828 140,429,930 133,191,280 755,617,022
The accompanying notes are an integral part of the financial
statements.
13
Xerox Segregated
Income Stock Assets Employee
Fund Fund Fund Loan Fund Total
(see note 4)
28,677,256 12,365,247 - - 109,818,468
11,356,376 7,829,947 - - 58,087,602
40,033,632 20,195,194 - - 167,906,070
46,256,022 15,057,165 1,124,757 - 271,747,967
- - - 4,497,685 4,497,685
86,289,654 35,252,359 1,124,757 4,497,685 444,151,722
(54,862,143) (6,442,732) - - (106,706,712)
(101,790,509) 21,805,132 (1,989,353) 707,868 -
(70,362,998) 50,614,759 (864,596) 5,205,553 337,445,010
755,986,050 131,759,966 864,596 56,171,651 1,757,842,031
685,623,052 182,374,725 - 61,377,204 2,095,287,041
14
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and
November 30, 1997 and 1996
(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.
Plan Amendments
(i) In December 1997, the Company changed the Xerox Corporation
Profit Sharing and Savings Plan (the Plan) year end from
November 30 to December 31. As a result, the accompanying
financial statements include a statement of net assets
available for benefits at December 31, 1997, November 30,
1997 and November 30, 1996 as well as a statement of
changes in net assets available for benefits for the one
month period ended December 31, 1997 and the years ended
November 30, 1997 and November 30, 1996.
(ii) Effective January 1, 1998, the Plan Administrator amended
the provisions of the Plan pertaining to the valuation date
used to value assets of the Plan. This amendment requires
the Plan Trustee to value the assets held in each separate
fund as of the close of business each day. The Trustee
shall appraise them at their market or estimated fair value
each day and reflect increases or decreases in the value of
each separate fund. Previously, assets of the Plan were
valued once a month.
(iii) Effective January 1, 1997, the XDS Savings Plan employee
balances were transferred into the Xerox Corporation Profit
Sharing and Savings Plan. Participant account balances
existing at the time of the transfer are subject to the
provisions of the XDS Savings Plan while any new
contributions are subject to the provisions of the Xerox
Corporation Profit Sharing and Savings Plan.
(iv) Effective January 1, 1998, employees of Chrystal Software
Inc., dpiX, Inc., In Concert, Inc., In Xight Software,
Inc., Liveworks, Inc., PD Reader, Inc. and XESystems, Inc.
will no longer participate in the Plan's optional profit
sharing program. These employees are eligible to continue
participating in the savings portion of the Plan.
15
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(1) Description of Plan, Continued
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 may 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
$5,022,493 and $2,077,252 at November 30, 1997 and 1996,
respectively. There were no benefits allocated from the Plan
for participants at December 31, 1997.
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 a combination of before-tax and after-tax payroll
deductions. (The maximum before-tax contribution for the 1997
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 prior to the Plan year end change in
1997 differed 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.
For the calendar year ended December 31, 1997, the sponsor's ROA
was 18.0% which resulted in an optional profit sharing
contribution for the one month period ending December 31, 1997
for all eligible active employees at December 31, 1997 equal to
10% of pay or $245,981,190. Participants elected to invest
$68,219,617 into the Plan which has been accrued as an employer
contributions receivable in the Plan's financial statements for
the one month period ended December 31, 1997.
For the calendar year ended December 31, 1996, the sponsor's ROA
was 17.8%, which resulted 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 $60,388,059
into the Plan which is recorded as an employer contribution in
the Plan's financial statements for the plan year ending
November 30, 1997.
16
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(1) Description of Plan, Continued
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 established companies based in economically
developed countries of Europe and Asia.
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 cash for administrative purposes.
Segregated Assets Fund
This fund was established on April 1, 1991 and represented
participant investments in certain guaranteed investment
contracts which were segregated and frozen. In 1996, all
remaining investments in the Segregated Assets Fund were fully
recovered. See note 4 to the financial statements for further
discussion.
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 December 31, 1997 and November 30,
1997 and 1996, market value on loans approximate fair value.
17
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(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 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 December 31 and November
30, 1997:
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; and
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.
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 participate in 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. For the
one month period ended December 31, 1997, accrued administrative
expenses and due from (to) other funds activity is recorded at
both the Master Trust and plan level. Prior to the one month
period ended December 31, 1997, this activity was accrued only
at the Plan level. In addition, prior to November 30, 1996
there was a Segregated Assets Fund which is discussed in note 4.
18
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The following financial information is presented for the Master
Trust and each of the Master Trust investment pools:
Statement of Net Assets of the Master Trust as of December 31,
1997 is as follows:
Small
International Company
Stock U.S. Stock Stock All
Other
Assets Pool Pool Pool Pool
Cash (overdraft) $(440,317) 266,929 (369,071)
(13,039)
Receivables:
Dividends 1,189,113 2,005,454 204,275
108,752
Interest 240,712 750,259 788,274
14,841,482
Due from brokers 11,242,428 8,370,860 16,327,733
85,682,651
Other - 584,373 - -
Total receivables 12,672,253 11,710,946 17,320,282
100,632,885
Investments at fair
value:
At quoted market
value:
Short-term
investments 44,105,848 163,877,893 229,101,207
251,836,466
Fixed income
Investments 4,974,135 - -
1,254,277,494
Equity securities:
Xerox common
Stock - - - -
Other 974,400,002 2,325,093,037 729,192,598
358,595,427
At estimated fair
value:
Interest in real
estate trusts - - -
75,286,433
Other investments - - -
139,546,374
Investments at
contract value:
Investment
contracts with
insurance
companies
and banks - - - -
Total
Investments 1,023,479,985 2,488,970,930 958,293,805
2,079,542,194
Total assets 1,035,711,921 2,500,948,805 975,245,016
2,180,162,040
Liabilities
Due to brokers 2,046,663 2,553,077 155,485
138,660,686
Other 6,688,026 - 2,231,618
6,656,682
Net assets 1,026,977,232 2,498,395,728 972,857,913
2,034,844,672
19
Xerox
Income Stock
Fund Fund Total
(92,089) - (647,587)
- 1,461,318 4,968,912
8,192,303 5,242 24,818,272
13,113,477 - 134,737,149
- 7,032,593 7,616,966
21,305,780 8,499,153 172,141,299
74,439,579 432,338 763,793,331
588,632,453 - 1,847,884,082
- 337,073,565 337,073,565
2,167,893 - 4,389,448,957
- - 75,286,433
- - 139,546,374
278,816,783 - 278,816,783
944,056,708 337,505,903 7,831,849,525
965,270,399 346,005,056 8,003,343,237
38,229,883 - 181,645,794
139,660 - 15,715,986
926,900,856 346,005,056 7,805,981,457
20
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The allocation of Master Trust net assets by investment pool as
of December 31, 1997 is as follows:
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
International
Stock Pool $ 168,557,767 - -
858,419,465
U.S. Stock Pool - 259,252,193 -
2,239,143,535
Small Company
Stock Pool - - 210,373,891
762,484,022
All Other Pool - - -
2,034,844,672
Income Fund - - - -
Xerox Stock Fund - - - -
Total $ 168,557,767 259,252,193 210,373,891
5,894,891,694
21
Xerox
Income Stock
Fund Fund Total
- - 1,026,977,232
- - 2,498,395,728
- - 972,857,913
- - 2,034,844,672
926,900,856 - 926,900,856
- 346,005,056 346,005,056
926,900,856 346,005,056 7,805,981,457
22
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Net assets in the Master Trust for all participating plans as of
December 31, 1997 are as follows:
Small
International Company
Stock U.S. Stock Stock
Balanced
Fund Fund Fund Fund
Xerox Corporation
Profit Sharing
and Savings
Plan* $ 159,252,236 246,463,767 198,801,910
936,262,294
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. 9,305,531 12,788,426 11,571,981
65,516,491
Xerox Corporation
Retirement
Income Guarantee
Plan - - -
4,391,614,640
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. - - - 501,498,269
Total $ 168,557,767 259,252,193 210,373,891
5,894,891,694
* The net asset balances at the master trust level do not
include the optional profit sharing accrual at December 31,
1997, which is recorded at the Plan level only.
23
Xerox
Income Stock
Fund Fund Total
636,138,988 317,657,942 2,494,577,137
81,207,045 28,347,114 208,736,588
183,117,495 - 4,574,732,135
26,437,328 - 527,935,597
926,900,856 346,005,056 7,805,981,457
24
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Statement of Net Assets of the Master Trust as of November 30,
1997:
Small
International Company
Stock U.S. Stock Stock All Other
Assets Pool Pool Pool Pool
Cash 101,955 11,907 - 165,389
Receivables:
Dividends 1,293,836 2,721,518 134,380 21,640
Interest 285,100 729,998 687,053 14,841,482
Due from brokers 2,055,055 804,656 4,111,180 99,938,034
Total
Receivables 3,633,991 4,256,172 4,932,613
114,801,156
Investments at fair
value:
At quoted market
value:
Short-term
Investments 72,050,751 158,431,877 141,929,559
307,280,744
Fixed income
Investments 5,324,510 - -
1,194,461,407
Equity securities:
Xerox common
Stock - - - -
Other 935,415,759 2,292,047,471 839,706,225
357,400,841
At estimated fair
value:
Interest in real
estate trusts - - - 74,947,472
Other investments - - - 138,439,496
Investments at
contract value:
Investment
contracts with
insurance
companies
and banks - - - -
Total
Investments 1,012,791,020 2,450,479,348 981,635,784
2,072,529,960
Total assets 1,016,526,966 2,454,747,427 986,568,397
2,187,496,505
Liabilities
Cash overdraft - - 282 -
Due to brokers 830,987 4,369,061 5,064,018 139,566,815
Net assets $ 1,015,695,979 2,450,378,366 981,504,097
2,047,929,690
25
Xerox
Income Stock
Fund Fund Total
851 - 280,102
8 - 4,171,382
8,185,309 2,085 24,731,027
11,611,718 - 118,520,643
19,797,035 2,085 147,423,052
32,723,746 281,863 712,698,540
522,657,230 - 1,722,443,147
- 347,575,351 347,575,351
2,176,566 - 4,426,746,862
- - 74,947,472
- - 138,439,496
375,936,203 - 375,936,203
933,493,745 347,857,214 7,798,787,071
953,291,631 347,859,299 7,946,490,225
- 435 717
23,371,769 - 173,202,650
929,919,862 347,858,864 7,773,286,858
26
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The allocation of Master Trust investments by investment pool as
of November 30, 1997 is as follows:
Small
International Company
Stock U.S. Stock Stock
Balanced
Fund Fund Fund Fund
International Stock
Pool $ 176,349,571 - -
839,346,408
U.S. Stock Pool - 251,186,242 -
2,199,192,124
Small Company Stock
Pool - - 213,108,206
768,395,891
All Other Pool - - -
2,047,929,690
Income Fund - - - -
Xerox Stock Fund - - - -
Total $ 176,349,571 251,186,242 213,108,206
5,854,864,113
27
Xerox
Income Stock
Fund Fund Total
- - 1,015,695,979
- - 2,450,378,366
- - 981,504,097
- - 2,047,929,690
929,919,862 - 929,919,862
- 347,858,864 347,858,864
929,919,862 347,858,864 7,773,286,858
28
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Investments in the Master Trust for all participating plans as
of November 30, 1997 are as follows:
Small
International Company
Stock U.S. Stock Stock
Balanced
Fund Fund Fund Fund
Xerox Corporation
Profit
Sharing and
Savings Plan $ 166,221,445 238,536,887 201,094,208
928,099,095
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. 10,128,126 12,649,355 12,013,998 65,159,193
Xerox Corporation
Retirement
Income Guarantee
Plan - - - 4,360,881,801
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. - - - 500,724,024
Total $ 176,349,571 251,186,242 213,108,206
5,854,864,113
29
Xerox
Income Stock
Fund Fund Total
637,540,756 319,238,274 2,490,730,665
80,336,040 28,620,590 208,907,302
185,079,677 - 4,545,961,478
26,963,389 - 527,687,413
929,919,862 347,858,864 7,773,286,858
30
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Statement of Net Assets of the Master Trust as of November 30,
1996:
Small
International Company
Stock U.S. Stock Stock All Other
Assets Pool Pool Pool Pool
Cash $ 108,596 - -
1,971,597
Receivables:
Dividends 1,252,417 2,520,631 152,707
211,754
Interest 215,445 404,275 554,161
13,108,361
Due from brokers 2,885,545 2,317,272 10,209,426
10,051,565
Total
Receivables 4,353,407 5,242,178 10,916,294
23,371,680
Investments at fair
value:
At quoted market
value:
Short-term
Investments 37,876,365 52,717,245 119,000,779
296,394,084
Fixed income
Investments 12,263,211 - - 1,140,116,818
Equity securities:
Xerox common
Stock - - - -
Other 898,144,054 1,798,935,366 652,074,653
267,795,216
At estimated fair
value:
Interest in real
estate
Trusts - - -
120,074,113
Other
Investments - - -
141,816,200
Investments at
contract value:
Investment
contracts with
insurance
companies
and banks - - - -
Total
Investments 948,283,630 1,851,652,611 771,075,432
1,966,196,431
Total assets 952,745,633 1,856,894,789 781,991,726
1,991,539,708
Liabilities
Cash overdraft - 639 - -
Due to brokers 750,632 4,381,597 7,166,878 34,232,374
Net assets $951,995,001 1,852,512,553 774,824,848
1,957,307,334
31
Xerox
Income Stock
Fund Fund Total
1,957,053 - 4,037,246
3 - 4,137,512
7,705,579 4,289 21,992,110
12,257,266 - 37,721,074
19,962,848 4,289 63,850,696
68,075,236 1,752,922 575,816,631
308,267,495 - 1,460,647,524
- 197,019,053 197,019,053
927 - 3,616,950,216
- - 120,074,113
- - 141,816,200
634,202,724 - 634,202,724
1,010,546,382 198,771,975 6,746,526,461
1,032,466,283 198,776,264 6,814,414,403
- - 639
20,685,156 4,596,115 71,812,752
1,011,781,127 194,180,149 6,742,601,012
32
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The allocation of Master Trust investments by investment pool as
of November 30, 1996 is as follows:
Small
International Company
Stock U.S. Stock Stock All
Other
Fund Fund Fund Fund
International Stock
Pool $ 144,212,119 - -
807,782,882
U.S. Stock Pool - 145,647,985 -
1,706,864,568
Small Company Stock
Pool - - 138,176,064
636,648,784
All Other Pool - - -
1,957,307,334
Income Fund - - - -
Xerox Stock Fund - - - -
Total $ 144,212,119 145,647,985 138,176,064
5,108,603,568
33
Xerox
Income Stock
Fund Fund Total
- - 951,995,001
- - 1,852,512,553
- - 774,824,848
- - 1,957,307,334
1,011,781,127 - 1,011,781,127
- 194,180,149 194,180,149
1,011,781,127 194,180,149 6,742,601,012
34
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Investments in the Master Trust for all participating plans as
of November 30, 1996 are as follows:
Small
International Company
Stock U.S. Stock Stock All Other
Fund Fund Fund Fund
Xerox Corporation
Profit
Sharing and
Savings Plan $ 136,379,184 138,676,389 131,146,618
757,250,020
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. 7,832,935 6,971,596 7,029,446 48,816,602
Xerox Corporation
Retirement
Income Guarantee
Plan - - -
3,860,398,301
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
XDS Investment Plan - - -
581,701
Total $ 144,212,119 145,647,985 138,176,064
5,108,603,568
35
Xerox
Income Stock
Fund Fund Total
693,889,121 179,548,012 2,036,889,344
85,680,794 14,632,137 170,963,510
201,917,419 - 4,062,315,720
30,293,793 - 471,850,737
- - 581,701
1,011,781,127 194,180,149 6,742,601,012
36
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Statement of Changes in Net Assets of the Master Trust for the
one month period ending December 31, 1997:
Small
International Company
Stock U.S. Stock Stock All Other
Pool Pool Pool Pool
Additions:
Transfers in $ 939,756 1,520,723 1,192,294 3,440,189
Investment
earnings:
Interest 202,909 750,978 793,609 6,126,673
Dividends 882,124 2,115,534 306,282 2,541,445
Net appreciation
(depreciation) 21,900,292 43,019,044 (16,962,885) 5,498,929
Margin variation
on futures
contracts (95,540) (814,897) 8,628,426 2,300,388
Other 54,282 20,020 31,823 14,924
Total investment
earnings (loss) 22,944,067 45,090,679 (7,202,745) 16,482,359
Total additions
(deductions) 23,883,823 46,611,402 (6,010,451) 19,922,548
Deductions:
Administrative
expenses 310,690 194,227 393,228 6,382,549
Transfers out 702,337 840,592 751,755 22,944,703
Total deductions 1,013,027 1,034,819 1,144,983 29,327,252
Transfers between
funds/pools (11,589,543) 2,440,779 (1,490,750) (3,680,314)
Net assets:
Beginning of
period 1,015,695,979 2,450,378,366 981,504,097
2,047,929,690
End of
period $1,026,977,232 2,498,395,728 972,857,913
2,034,844,672
37
Xerox
Income Stock
Fund Fund Total
2,391,846 1,835,515 11,320,323
5,154,818 47,787 13,076,774
338,418 1,461,318 7,645,121
636,761 (17,890,578) 36,201,563
51,226 - 10,069,603
553 - 121,602
6,181,776 (16,381,473) 67,114,663
8,573,622 (14,545,958) 78,434,986
575,715 88,500 7,944,909
10,394,122 2,161,969 37,795,478
10,969,837 2,250,469 45,740,387
(622,791) 14,942,619 -
929,919,862 347,858,864 7,773,286,858
926,900,856 346,005,056 7,805,981,457
38
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The allocation of net income (loss) from Master Trust
investments, net of administrative expenses, by investment pool
and fund for the one month period ended December 31, 1997 is as
follows:
Small
International Company
Stock U.S. Stock Stock All
Other
Fund Fund Fund Fund
International Stock
Pool $ 3,837,223 - -
18,796,154
U.S. Stock
Pool - 4,649,365 -
40,247,087
Small Company
Stock Pool - - (1,656,202)
(5,939,771)
All Other Pool - - -
10,099,810
Income Fund - - - -
Xerox Stock Fund - - - -
Total $ 3,837,223 4,649,365 (1,656,202)
63,203,280
39
Xerox
Income Stock
Fund Fund Total
- - 22,633,377
- - 44,896,452
- - (7,595,973)
- - 10,099,810
5,606,061 - 5,606,061
- (16,469,973) (16,469,973)
5,606,061 (16,469,973) 59,169,754
40
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Net income (loss) from Master Trust Investments, net of
administrative expenses, for all participating plans for the one
month period ended December 31, 1997:
Small
International Company
Stock U.S. Stock Stock All Other
Fund Fund Fund Fund
Xerox Corporation
Profit Sharing and
Savings Plan $ 3,493,132 4,312,537 (1,620,555)
10,591,873
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. 344,091 336,828 (35,647)
695,135
Xerox Corporation
Retirement
Income Guarantee
Plan - - -
46,595,340
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. - - -
5,320,932
Total $ 3,837,223 4,649,365 (1,656,202)
63,203,280
41
Xerox
Income Stock
Fund Fund Total
4,094,269 (15,103,176) 5,768,080
422,229 (1,366,797) 395,839
952,104 - 47,547,444
137,459 - 5,458,391
5,606,061 (16,469,973) 59,169,754
42
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Statement of Changes in Net Assets of the Master Trust for the
year ended November 30, 1997:
Small
International Company
Stock U.S. Stock Stock All Other
Pool Pool Pool Pool
Additions:
Transfers in $ 22,306,484 29,656,915 27,058,668 79,565,183
Investment earnings:
Interest 1,757,349 5,278,265 7,297,953 94,879,439
Dividends 18,590,152 30,313,782 4,363,734 32,314,872
Net appreciation
(depreciation) 63,334,431 513,193,249 165,120,824 135,330,440
Margin variation on
futures
contracts (1,755,915) 278,387 (7,435,687) (7,295,238)
Other 1,125,898 609,792 490,449 9,218,301
Total investment
earnings 83,051,915 549,673,475 169,837,273 264,447,814
Total additions 105,358,399 579,330,390 196,895,941 344,012,997
Deductions:
Administrative
expenses 7,366,980 4,588,938 5,153,687 14,439,320
Transfers out 9,831,290 9,771,882 8,829,849 260,745,848
Total
deductions 17,198,270 14,360,820 13,983,536 275,185,168
Transfers between
funds/pools (24,459,151) 32,896,243 23,766,844 21,794,527
Net assets:
Beginning of
year 951,995,001 1,852,512,553 774,824,848 1,957,307,334
End of year $1,015,695,979 2,450,378,366 981,504,097 2,047,929,690
43
Xerox
Income Stock
Fund Fund Total
48,095,890 30,942,161 237,625,301
63,253,387 57,861 172,524,254
35,286 5,197,447 90,815,273
(89,293) 116,767,751 993,657,402
(383,641) - (16,592,094)
4,480,888 26,055 15,951,383
67,296,627 122,049,114 1,256,356,218
115,392,517 152,991,275 1,493,981,519
2,207,265 262,852 34,019,042
123,104,702 16,993,060 429,276,631
125,311,967 17,255,912 463,295,673
(71,941,815) 17,943,352 -
1,011,781,127 194,180,149 6,742,601,012
929,919,862 347,858,864 7,773,286,858
44
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(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, 1997 is as follows:
Small
International Company
Stock U.S. Stock Stock All Other
Fund Fund Fund Fund
International Stock
Pool $ 12,519,157 - -
63,165,778
U.S. Stock Pool - 50,619,362 -
494,465,175
Small Company
Stock Pool - - 33,159,236
131,524,350
All Other Pool - - -
250,008,494
Income Fund - - - -
Xerox Stock Fund - - - -
Total $ 12,519,157 50,619,362 33,159,236
939,163,797
45
Xerox
Income Stock
Fund Fund Total
- - 75,684,935
- - 545,084,537
- - 164,683,586
- - 250,008,494
65,089,362 - 65,089,362
- 121,786,262 121,786,262
65,089,362 121,786,262 1,222,337,176
46
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Net income from Master Trust Investments, net of administrative
expenses for all participating plans for the year ended November
30, 1997:
Small
International Company
Stock U.S. Stock Stock All Other
Fund Fund Fund Fund
Xerox Corporation Profit
Sharing and
Savings Plan* $ 11,837,221 48,109,839 31,337,175
146,126,025
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. 681,936 2,509,523 1,822,061 9,948,427
Xerox Corporation Retirement
Income Guarantee
Plan - - - 702,386,981
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. - - - 80,702,364
Total $ 12,519,157 50,619,362 33,159,236 939,163,797
* 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.
47
Xerox
Income Stock
Fund Fund Total
44,788,256 112,236,153 394,434,669
5,468,305 9,550,109 29,980,361
13,026,031 - 715,413,012
1,806,770 - 82,509,134
65,089,362 121,786,262 1,222,337,176
48
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Statement of Changes in Net Assets of the Master Trust for the
year ended November 30, 1996 is as follows:
Small
International Company
Stock U.S. Stock Stock All Other
Pool Pool Pool Pool
Additions:
Transfers in $ 17,667,117 23,361,582 17,871,703
161,169,556
Investment earnings:
Interest 1,758,465 7,472,177 5,385,918 77,829,819
Dividends 11,536,790 64,246,861 8,676,627 27,587,944
Net appreciation
(depreciation) 189,455,864 268,707,939 133,179,213 203,226,626
Margin variation
on futures
contracts (40,828) 17,959,290 9,297,242 9,725,636
Other 552,365 101,265 216,690 2,267,517
Total investment
earnings 203,262,656 358,487,532 156,755,690 320,637,542
Total additions 220,929,773 381,849,114 174,627,393 481,807,098
Deductions:
Administrative
expenses 6,299,902 2,155,352 3,106,127 13,317,170
Transfers out 6,804,169 6,451,303 5,727,577 325,123,111
Total deductions 13,104,071 8,606,655 8,833,704 338,440,281
Transfers between
funds/pools (2,842,963) 154,196,486 28,035,998
(112,596,592)
Net assets:
Beginning of
year 747,012,262 1,325,073,608 580,995,161
1,926,537,109
End of year $ 951,995,001 1,852,512,553 774,824,848
1,957,307,334
49
Xerox Segregated
Income Stock Assets
Fund Fund Fund Total
(see note 4)
60,773,598 25,410,969 - 306,254,525
70,882,808 56,938 1,615,842 165,001,967
3 3,160,301 - 115,208,526
(2,182,375) 12,868,904 - 805,256,171
267,516 - - 37,208,856
92,908 5,553 - 3,236,298
69,060,860 16,091,696 1,615,842 1,125,911,818
129,834,458 41,502,665 1,615,842 1,432,166,343
1,907,429 112,269 - 26,898,249
135,023,860 11,624,843 - 490,754,863
136,931,289 11,737,112 - 517,653,112
(89,143,035) 25,234,997 (2,884,891) -
1,108,020,993 139,179,599 1,269,049 5,828,087,781
1,011,781,127 194,180,149 - 6,742,601,012
50
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
(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:
Small
International Company
Stock U.S. Stock Stock All Other
Fund Fund Fund Fund
International Stock
Pool $ 25,038,377 - -
171,924,377
U.S. Stock Pool - 28,282,250 -
328,049,930
Small Company
Stock Pool - - 23,630,507
130,019,056
All Other Pool - - -
307,320,372
Income Fund - - - -
Xerox Stock
Fund - - - -
Total $ 25,038,377 28,282,250 23,630,507
937,313,735
51
Xerox Segregated
Income Stock Asset
Fund Fund Fund Total
- - - 196,962,754
- - - 356,332,180
- - - 153,649,563
- - - 307,320,372
67,153,431 - 1,615,842 68,769,273
- 15,979,427 - 15,979,427
67,153,431 15,979,427 1,615,842 1,099,013,569
52
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(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:
Small
International Company
Stock U.S. Stock Stock All Other
Fund Fund Fund Fund
Xerox Corporation Profit
Sharing and
Savings Plan* $ 23,752,671 26,986,737 22,517,556
136,097,648
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
Xerox Corporation Retirement
Income Guarantee
Plan - - -
710,218,766
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
XDS Investment Plan - - - 101,157
Total $ 25,038,377 28,282,250 23,630,507
937,313,735
* 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.
53
Xerox Segregated
Income Stock Asset
Fund Fund Fund Total
46,800,658 15,061,698 1,124,757 272,341,725
5,525,723 917,729 135,231 18,962,380
13,001,192 - 330,112 723,550,070
1,825,858 - 25,742 84,058,237
- - - 101,157
67,153,431 15,979,427 1,615,842 1,099,013,569
54
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(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 six 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.
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 one month period ended
December 31, 1997 and the years ended November 30, 1997 and
November 30, 1996 were 6.8%, 6.8% and 7.3%, respectively.
(ii) The crediting interest rates at December 31, 1997, November
30, 1997 and November 30, 1996 ranged from 4.4% 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
December 31, 1997, November 30, 1997 and November 30, 1996
was approximately $274,344,245, $374,333,247 and
$641,588,033, respectively. Contract values were
$278,816,783, $375,936,203 and $634,202,724 at December 31,
1997, November 30, 1997 and November 30 1996, respectively.
The Master Trust invests in real estate group 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 futures investments.
55
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
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 one
month period ending December 31, 1997 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 $ (633,644) - - 1,121,169 636,761 - 1,124,286
Xerox common
stock - - - - - (17,890,578)
(17,890,578)
Other equity
investments 22,533,936 43,019,044 ( 16,962,885) 3,061,928 - - 51,652,023
Investments at
estimated
fair value:
Interest in
real estate
trusts - - - 433,096 - - 433,096
Other
investments - - - 882,736 - - 882,736
Total $ 21,900,292 43,019,044 (16,962,885) 5,498,929 636,761 (17,890,578) 36,201,563
</TABLE>
56
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
<TABLE>
The net appreciation (depreciation) of investments for the year
ended November 30, 1997 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 $ (1,167,776) - - 18,771,128 (89,293) -
17,514,059
Xerox common
stock - - - - - 116,767,751
116,767,751
Other equity
investments 64,502,207 513,193,249 165,120,824 99,220,631 - -
842,036,911
Investments
at estimated
fair value:
Interest in
real estate
trusts - - - (9,126,584) - -
(9,126,584)
Other
investments - - - 26,465,265 - -
26,465,265
Total $ 63,334,431 513,193,249 165,120,824 135,330,440 (89,293) 116,767,751 993,657,402
</TABLE>
<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:
Interest in
real estate
trusts - - - (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
</TABLE>
57
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
There are no investments in the Plan that represent 5% or more
of Master Trust net assets.
Other investments consist primarily of private placement limited
partnerships.
(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 in affected assets were
transferred into a Segregated Assets Fund.
Through November 30, 1996, the Xerox retirement and savings
plans received $67.6 million in payments related to the ELIC
investments. These payments represented 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.
58
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(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. At December
31, 1997, all accrued administrative expenses and interfund
activity is recorded at both the Master Trust and Plan levels.
Prior to December 31, 1997, this activity was accrued only at
the Plan level.
The total number of units and net asset value per unit
outstanding from December 31, 1996 through December 31, 1997
were as follows:
International Stock Fund U.S. Stock Fund Small Company Stock Fund
Units Unit Units Unit Units Unit
Outstanding Value Outstanding Value Outstanding Value
1996
December 31 90,563,566 $1.532938 84,859,388 $1.633287 79,486,842 $1.712923
1997
January 31 91,150,844 1.534505 85,893,585 1.730341 80,473,310 1.744382
February 28 94,025,972 1.553327 88,497,656 1.742577 83,858,153 1.692002
March 31 99,136,218 1.567248 96,133,238 1.660099 91,041,937 1.613780
April 30 100,422,099 1.579270 98,707,608 1.753541 93,217,757 1.609185
May 31 101,629,939 1.649894 99,339,876 1.868288 92,842,933 1.787189
June 30 102,618,758 1.720781 101,625,093 1.946789 92,963,998 1.875320
July 31 103,491,932 1.772593 104,087,145 2.110584 93,028,246 2.001355
August 31 104,231,978 1.663151 106,537,307 2.012423 93,690,113 2.028639
Sept. 30 104,171,429 1.782407 109,075,779 2.135018 94,826,934 2.176980
October 31 102,885,514 1.639303 110,452,534 2.065826 97,598,620 2.054848
Nov. 30 102,005,002 1.633471 111,278,329 2.145322 99,308,863 2.030057
Dec 31 95,447,037 1.668488 112,845,473 2.184082 98,744,501 2.013296
Balanced Fund Income Fund Xerox Stock Fund
Units Unit Units Unit Units Unit
Outstanding Value Outstanding Value Outstanding Value
1996
Dec 31 53,633,066 $14.093684 105,026,066 $6.524472 27,049,139 $7.308812
1997
January 31 53,698,376 14.470430 105,186,425 6.558457 27,006,027 8.145360
Feb 28 54,061,787 14.506426 103,755,361 6.586982 26,402,443 8.694382
March 31 55,945,191 14.137580 102,939,902 6.603786 27,057,319 7.956917
April 30 55,641,654 14.496758 101,687,690 6.648515 27,160,307 8.603987
May 31 55,621,901 15.218038 101,452,051 6.687458 27,192,122 9.481475
June 30 55,927,288 15.768765 99,702,645 6.730846 27,506,326 11.082058
July 31 55,994,477 16.591127 98,453,840 6.791030 27,643,047 11.577523
August 31 55,805,277 16.203908 96,060,680 6.809071 28,488,208 10.631119
Sept 30 55,844,090 16.994571 94,493,225 6.857353 28,923,301 11.894320
October 31 55,744,736 16.580802 93,522,930 6.905255 29,041,937 11.202250
Nov 30 55,470,643 16.747769 92,199,704 6.927294 29,195,255 10.964281
Dec 31 55,266,051 16.941002 91,236,509 6.972417 30,389,848 10.452765
59
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(5) Unit Values, Continued
The total number of units and net asset value per unit
outstanding during the year ended November 30, 1996 was as
follows:
International Stock Fund U.S. Stock Fund Small Company Stock Fund
Units Unit Units Unit Units Unit
Outstanding Value Outstanding Value Outstanding Value
Dec 31 61,795,806 $1.247564 60,026,532 $1.340973 55,085,964 $1.351324
January 31 62,382,157 1.293327 61,949,688 1.384301 56,320,966 1.342293
Feb 29 65,714,223 1.305984 65,078,404 1.398004 57,683,878 1.399105
March 31 69,908,614 1.345844 71,016,923 1.410330 58,160,173 1.451021
April 30 76,839,969 1.380051 79,049,752 1.425851 62,190,910 1.547702
May 31 81,463,488 1.388665 81,502,643 1.457879 66,205,558 1.606726
June 30 84,965,509 1.403904 82,646,827 1.459497 72,117,763 1.547776
July 31 87,411,236 1.346170 83,539,982 1.387785 75,583,671 1.432424
August 31 88,046,503 1.376319 83,529,506 1.421710 76,828,681 1.527109
Sept 30 88,945,855 1.420495 83,029,325 1.508419 77,873,140 1.605861
October 31 90,193,238 1.436266 83,002,657 1.544068 77,837,161 1.606247
Nov 30 90,181,655 1.511053 83,361,927 1.664017 77,968,283 1.681941
Balanced Fund Income Fund Xerox Stock Fund
Units Unit Units Unit Units Unit
Outstanding Value Outstanding Value Outstanding Value
Dec 31 51,224,934 $11.765868 124,318,691 $6.130939 21,394,017 $6.189449
January 31 51,462,675 12.002653 122,754,641 6.167616 21,814,069 5.599330
Feb 29 52,077,595 12.105990 121,118,697 6.185017 23,442,405 5.926790
March 31 52,443,617 12.315363 117,012,099 6.204795 23,942,955 5.703779
April 30 54,307,056 12.556639 117,123,296 6.229090 24,929,008 6.669084
May 31 54,419,516 12.757811 114,645,872 6.258788 24,844,135 7.166556
June 30 54,152,325 12.786097 111,463,002 6.299196 25,138,171 7.354894
July 31 54,133,948 12.344405 109,615,217 6.332220 25,291,962 6.928447
August 31 53,983,112 12.648546 108,953,692 6.366458 25,486,220 7.543459
Sept 30 53,949,993 13.201415 107,845,121 6.411511 25,708,519 7.415021
October 31 53,937,896 13.398674 107,656,305 6.461901 25,874,302 6.410834
Nov 30 53,767,635 14.089010 106,860,617 6.501211 26,550,199 6.766386
60
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(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:
December 31,
1997
Net assets available for
plan benefits as reported
in the Plan financial
statements 2,628,979,185
Benefit claims payable
reported on line 31g of
Form 5500 -
Net assets available for
plan benefits as reported
in the Plan Form 5500 $2,628,979,185
December 31,
1997
Benefits paid to
participants as reported
in the Plan financial
statements $ 6,848,357
Add: Amounts allocated
to withdrawingparticipants
at December 31 -
Less: Amounts allocated
to withdrawing participants
at November 30, 1997 (5,022,493)
Benefits paid to participants
as reported in the Form 5500 $ 1,825,864
Amounts allocated to withdrawing participants are recorded on
the Form 5500 for benefit claims that have been processed and
approved for payment prior to December 31 but not yet paid as of
that date. There were no benefits allocated from the Plan for
participants at December 31, 1997.
November 30,
1997 1996
Net assets available for
plan benefits as reported
in the Plan financial
statements $2,554,122,781 2,095,287,041
Benefit claims payable
reported on line 31g of
Form 5500 (5,022,493) (2,077,252)
Net assets available for
plan benefits as reported
in the Plan Form 5500 $2,549,100,288 2,093,209,789
November 30,
1997 1996
Benefits paid to
participants as reported
in the Plan financial
statements $ 119,413,141 106,706,712
Add: Amounts allocated
to withdrawingparticipants
at November 30 5,022,493 2,077,252
Less: Amounts allocated
to withdrawing participants
at November 30, 1997 and
1996, respectively (2,077,252) (3,525,402)
Benefits paid to participants
as reported in the Form 5500 $ 122,358,382 105,258,562
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.
(7) 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.
Schedule 1
61
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
Description of investment
including
Identity of issuer, maturity date, rate of
borrower,lessor, interest, collateral, Current
or similar party par or maturity value Cost value
Investment in Master Trust (1) $2,062,225,164 $2,496,304,393
*Investment in Participant Loans to Plan
Loans Receivable participants,
maturity dates
through 5/31/11,
interest rates
from 8.0% to
11.5% per annum - 66,182,431
* Party-in-interest
(1) See note 3.
Schedule 2
62
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Line 27a - Schedule of Assets Held for Investment Purposes
November 30, 1997
Description of investment
including
Identity of issuer, maturity date, rate of
borrower,lessor, interest, collateral, Current
or similar party par or maturity value Cost value
Investment in Master Trust (1) $2,062,242,673 $2,490,730,665
*Investment in Participant Loans to Plan
Loans Receivable participants,
maturity dates
through 5/31/11,
interest rates
from 8.0% to
11.5% per annum - 64,417,177
* Party-in-interest
(1) See note 3.
Independent Auditors' Report
The Plan Administrator and Participants
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 December 31, 1997 and
November 30, 1997 and 1996, and the related statements of changes
in net assets available for plan benefits for the one month
period ended December 31, 1997 and the years ended November 30,
1997 and November 30, 1996. 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 December 31, 1997,
and November 30, 1997 and 1996, and the changes in net assets
available for plan benefits for the one month period ended
December 31, 1997 and the years ended November 30, 1997 and 1996
in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedules of assets held for investment purposes at
December 31, 1997 and November 30, 1997 are presented for the
purpose of additional analysis and are not a required part of the
basic financial statements, but are 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
schedules 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.
April 30, 1998
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, 1998, relating to the
statement of net assets available for plan benefits of the Xerox
Corporation Profit Sharing and Savings Plan as of December 31, 1997
and November 30, 1997 and 1996, and the related statements of
changes in net assets available for plan benefits for the one month
period ended December 31, 1997 and for the years ended November 30,
1997 and 1996 and related schedule, which report appears in the
November 30, 1997 Annual Report on Form 11-K of the Xerox
Corporation Profit Sharing and Savings Plan.
Rochester, New York
May 29, 1998
