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: December 31, 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:
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.
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.
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.
Patricia M. Nazemetz
Stamford, Connecticut
Dated June 26, 1998
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.
Financial Statements and Schedule
December 31, 1997 and 1996
(With Independent Auditors' Report
Thereon)
2
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.
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 $ 9,841,193 12,796,198 1,519,712 65,924,606
Participant notes
receivable - - - -
Employer
contributions
receivable 141,140 399,044 226,836 2,535,065
Total assets 9,982,333 13,195,242 1,746,548 68,459,671
Liabilities:
Accrued expenses and
other
liabilities 18,846 8,470 14,039 77,887
Due from (to) other
funds (516,820) 7,870 72,614 (280,789)
Due from (to) other
plans 4 (7,172) (6,306) (49,439)
Net assets available
for plan
benefits $ 9,446,671 13,187,470 1,798,817 68,051,556
The accompanying notes are an integral part of the financial
statements.
3
_
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
81,394,772 27,853,875 - 209,330,356
- - 12,783,806 12,783,806
254,211 919,093 - 4,475,389
81,648,983 28,772,968 12,783,806 226,589,551
113,405 6,157 - 238,804
(72,094) 789,219 - - _
(2,228) (289,823) - (354,964)
81,461,256 29,266,207 12,783,806 225,995,783
4
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.
Statement of Net Assets Available for Plan Benefits
With Fund Information
December 31, 1996
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Assets:
Investment in
Master Trust $ 7,864,634 7,055,404 7,380,655 48,959,548
Participant notes
receivable - - - -
Employer
contributions
receivable 256,046 280,792 411,977 1,038,178
Total assets 8,120,680 7,336,196 7,792,632 49,997,726
Liabilities:
Accrued expenses
and other
liabilities 8,973 1,348 4,948 26,563
Due from (to) other
funds 104,649 30,316 34,663 95,409
Net assets available
for plan
benefits $ 8,216,356 7,365,164 7,822,347 50,066,572
The accompanying notes are an integral part of the financial
statements.
5
_
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
84,907,703 16,083,001 - 172,250,945
- - 11,350,450 11,350,450
556,804 533,368 - 3,077,165
85,464,507 16,616,369 11,350,450 186,678,560
15,378 (1,782) - 55,428
(264,241) (232,839) 232,043 - _
85,184,888 16,385,312 11,582,493 186,623,132
6
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.
Statement of Changes in Net Assets Available for Plan Benefits
With Fund Information
Year ended December 31, 1997
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Contributions:
Employees' -
Voluntary $ 847,677 1,016,708 1,026,289 3,996,212
Employer 251,888 519,168 358,981 3,155,324
Total
contributions 1,099,565 1,535,876 1,385,270 7,151,536
Net income from
Master
Trust investments,
net of
administrative
expenses 780,911 2,863,438 1,595,595 10,664,884
Interest income on
participant
notes receivable - - - -
_
Total 1,880,476 4,399,314 2,980,865 17,816,420
Benefit payments (338,914) (193,823) (220,068) (2,254,111)
Transfers among
Funds (311,251) 1,623,987 1,221,979 2,472,114
Transfer from (to)
other plans 4 (7,172) (6,306) (49,439)
Net increase
(decrease)
in net assets
available
for plan
benefits 1,230,315 5,822,306 3,976,470 17,984,984
Net assets available
for plan
benefits:
Beginning of
year 8,216,356 7,365,164 7,822,347 50,066,572
End of
Year $ 9,446,671 13,187,470 11,798,817 68,051,556
The accompanying notes are an integral part of the financial
statements.
7
_
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
5,172,716 1,651,221 - 13,710,823
1,079,405 1,115,476 - 6,480,242
6,252,121 2,766,697 - 20,191,065
5,678,877 7,032,350 - 28,616,055
- - 972,730 972,730
11,930,998 9,799,047 972,730 49,779,850
(6,560,908) (484,411) - (10,052,235)
(9,091,494) 3,856,082 228,583 -
(2,228) (289,823) - (354,964)
(3,723,632) 12,880,895 1,201,313 39,372,651
85,184,888 16,385,312 11,582,493 186,623,132
81,461,256 29,266,207 12,783,806 225,995,783
8
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.
Statement of Changes in Net Assets Available for Plan Benefits
With Fund Information
Year ended December 31, 1996
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Contributions:
Employees' -
Voluntary $ 635,693 730,553 664,705 3,678,924
Employer 333,754 371,494 488,810 1,521,349
Total
Contributions 969,447 1,102,047 1,153,515 5,200,273
Net income from Master
Trust
investments, net of
administrative
expenses 1,231,660 1,088,917 1,215,520 7,863,559
Interest income on
participant
notes receivable - - - - _
Total 2,201,107 2,190,964 2,369,035 13,063,832
Benefit payments (452,950) (172,350) (239,220) (4,184,856)
Transfers among
Funds 2,122,243 1,644,537 2,051,421 1,030,053
Net increase
(decrease)
in net assets
available
for plan
benefits 3,870,400 3,663,151 4,181,236 9,909,029
Net assets available
for plan
benefits:
Beginning of
year 4,345,956 3,702,013 3,641,111 40,157,543
End of year $ 8,216,356 7,365,164 7,822,347 50,066,572
The accompanying notes are an integral part of the financial
statements.
9
_
Xerox Segregated
Income Stock Assets Employee
Fund Fund Fund Loan Fund Total
(see note 4)
6,179,199 1,094,794 - - 12,983,868
1,772,340 675,052 - - 5,162,799
7,951,539 1,769,846 - - 18,146,667
5,292,502 2,105,714 135,231 - 18,933,103
- - - 851,082 851,082
13,244,041 3,875,560 135,231 851,082 37,930,852
(12,100,391) (401,411) - - (17,551,178)
(10,295,526) 3,377,596 (220,926) 290,602 - _
(9,151,876) 6,851,745 (85,695) 1,141,684 20,379,674
94,336,764 9,533,567 85,695 10,440,809 166,243,458
85,184,888 16,385,312 - 11,582,493 186,623,132
10
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.
Notes to Financial Statements
December 31, 1997 and 1996
(1) Description of Plan
The following description of the Profit Sharing and Savings
Plan of Xerox Corporation and The Xerographic Division, Union
of Needletrades, Industrial and Textile Employees, A.F.L. -
C.I.O - C.L.C. (Plan) provides only general information.
Participants should refer to the summary plan description or
plan document for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan covering substantially
all domestic full and part-time Union of Needletrades,
Industrial and Textile Employees, A.F.L. - C.I.O. - C.L.C.
employees of Xerox Corporation (sponsor). Employees hired on
or before the first working day in July are eligible to
participate in the Plan immediately. Otherwise, employees are
eligible to participate beginning on the next January 1.
Plan Amendment
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.
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 were
$122,742 at December 31, 1996. 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 Corporation matches 35% of employee savings
contributions, up to a maximum match equaling 4% of annual pay.
These contributions are made annually to eligible participants
of record on the last day of February following the Plan year
end. The 1997 contribution recorded on March 23, 1998 was
$2,210,367.
11
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.
Notes to Financial Statements, Continued
(1) Description of Plan, Continued
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.
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.
During 1997, the sponsor's ROA was 18.0%, which resulted in an
optional profit sharing contribution for all eligible active
employees at December 31, 1997 equal to 10.0% of pay or
$21,233,886. Participants elected to invest $4,475,389 into
the Plan at December 31, 1997.
During 1996, the sponsor's ROA was 17.8%, which resulted in an
optional profit sharing contribution for all eligible active
employees at December 31, 1996 equal to 10.0% of pay or
$20,644,353. Participants elected to invest $3,077,165 into
the Plan at December 31, 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 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.
12
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.
Notes to Financial Statements, Continued
(1) Description of Plan, Continued
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, 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 8, 1995, covering
Plan amendments through December 31, 1994, 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, 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, 1997:
Xerox Corporation Profit Sharing and Savings Plan;
Xerox Corporation Retirement Income Guarantee Plan; and
13
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.
Notes to Financial Statements, Continued
(3) Master Trust, Continued
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 year 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 December 31,
1997, this activity was accrued only at the plan level. In
addition, prior to December 31, 1996 there was a Segregated
Assets Fund which is discussed in note 4.
14
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.
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 All
Stock U.S. Stock Stock 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
15
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
16
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.
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
17
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
18
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.
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.
19
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
20
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.
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,
1996 is as follows:
Small
International Company
Stock U.S. Stock Stock All
Other
Assets Pool Pool Pool Pool
Cash (overdraft) $ 505,732 (39,735) (399)
79,265
Receivables:
Dividends 1,176,755 1,921,373 271,522
227,806
Interest 219,206 241,570 466,842
12,726,913
Due from
brokers 16,297,932 5,998,581 2,839,181
13,834,640
Total
Receivables 17,693,893 8,161,524 3,577,545
26,789,359
Investments at fair
value:
At quoted market
value:
Short-term
Investments 30,587,252 55,085,204 105,175,194
286,264,166
Fixed income
Investments 9,584,433 - -
1,120,334,856
Equity securities:
Xerox common
stock - - - -
Other 913,174,980 1,761,958,805 686,169,575
278,281,301
At estimated fair
value:
Interests in real
estate trusts - - -
119,317,087
Other investments - - -
152,511,242
Investments at
contract value:
Investment contracts
with
insurance companies
and
banks - - - - _
Total
investments 953,346,665 1,817,044,009 791,344,769
1,956,708,652
Total assets 971,546,290 1,825,165,798 794,921,915
1,983,577,276
Liabilities
Due to brokers 5,247,237 4,318,387 2,815,356
39,957,068
Net assets $ 966,299,053 1,820,847,411 792,106,559
1,943,620,208
21
Xerox
Income Stock
Fund Fund Total
3,912,873 - 4,457,736
3 1,166,031 4,763,490
7,817,415 3,570 21,475,516
- - 38,970,334
7,817,418 1,169,601 65,209,340
69,131,134 1,025,621 547,268,571
349,887,222 - 1,479,806,511
- 212,199,630 212,199,630
3,012,359 - 3,642,597,020
- - 119,317,087
- - 152,511,242
580,604,526 - 580,604,526
1,002,635,241 213,225,251 6,734,304,587
1,014,365,532 214,394,852 6,803,971,663
16,658,058 608,287 69,604,393
997,707,474 213,786,565 6,734,367,270
22
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.
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The allocation of Master Trust investments by investment pool
as of December 31, 1996 is as follows:
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
International
Stock Pool $ 146,849,493 - -
819,449,560
U.S. Stock
Pool - 145,682,101 -
1,675,165,310
Small Company
Stock Pool - - 143,641,654
648,464,905
All other pool - - -
1,943,620,208
Income fund - - - -
Xerox Stock Fund - - - -
_
Total $ 146,849,493 145,682,101 143,641,654
5,086,699,983
23
Xerox
Income Stock
Fund Fund Total
- - 966,299,053
- - 1,820,847,411
- - 792,106,559
- - 1,943,620,208
997,707,474 - 997,707,474
- 213,786,565 213,786,565
997,707,474 213,786,565 6,734,367,270
24
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.
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Investments in the Master Trust for all participating plans as
of December 31, 1996 are as follows:
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Xerox Corporation
Profit
Sharing and
Savings Plan $ 138,984,859 138,626,697 136,260,999
756,247,022
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. 7,864,634 7,055,404 7,380,655
48,959,548
Xerox Corporation
Retirement
Income Guarantee
Plan - - -
3,841,835,378
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. - - -
439,135,151
XDS Investment Plan - - -
522,884
Total $ 146,849,493 145,682,101 143,641,654
5,086,699,983
25
Xerox
Income Stock
Fund Fund Total
685,279,435 197,703,564 2,053,102,576
84,907,703 16,083,001 172,250,945
198,560,653 - 4,040,396,031
28,959,683 - 468,094,834
- - 522,884
997,707,474 213,786,565 6,734,367,270
26
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.
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Statement of Changes in Net Assets of the Master Trust for the
year ended December 31, 1997 is as follows:
Small
International Company
Stock U.S. Stock Stock All
Other
Pool Pool Pool Pool
Additions:
Transfers in $ 22,391,471 30,110,128 27,307,613
79,711,328
Investment earnings:
Interest 1,818,258 5,765,282 7,610,697
93,313,646
Dividends 18,529,748 29,591,528 4,125,706
29,467,543
Net
Appreciation 72,183,732 592,165,194 133,629,677
134,586,902
Margin variation on
futures
contracts (1,677,972) 925,496 2,147,052
3,096,468
Other 1,078,405 611,025 539,532
9,486,365
Total investment
earnings 91,932,171 629,058,525 148,052,664
269,950,924
Total
additions 114,323,642 659,168,653 175,360,277
349,662,252
Deductions:
Administrative
Expenses 7,379,480 4,681,594 5,394,518
19,115,310
Transfers out 9,718,154 10,240,200 9,108,878
259,992,290
Total
deductions 17,097,634 14,921,794 14,503,396
279,107,600
Transfer between
fund/pools (36,547,829) 33,301,458 19,894,473
20,669,812
Net assets:
Beginning of
Year 966,299,053 1,820,847,411 792,106,559
1,943,620,208
End of year $ 1,026,977,232 2,498,395,728 972,857,913
2,034,844,672
27
Xerox
Income Stock
Fund Fund Total
47,684,973 31,600,488 238,806,001
62,740,260 102,077 171,350,220
375,963 5,492,734 87,583,222
2,147,350 84,304,883 1,019,017,738
112,175 - 4,603,219
4,483,732 19,934 16,218,993
69,859,480 89,919,628 1,298,773,392
117,544,453 121,520,116 1,537,579,393
2,544,620 323,629 39,439,151
119,044,871 18,290,645 426,395,038
121,589,491 18,614,274 465,834,189
(66,761,580) 29,312,649 (131,017)
997,707,474 213,786,565 6,734,367,270
926,900,856 346,005,056 7,805,981,457
28
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.
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 December 31, 1997 is as follows:
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
International Stock
Pool $ 14,334,915 - - 70,217,776
U.S. Stock
Pool - 64,658,920 - 559,718,011
Small Company
Stock Pool - - 31,104,741 111,553,405
All Other Pool - - - 250,835,614
Income Fund - - - -
Xerox Stock
Fund - - - - _
Total $ 14,334,915 64,658,920 31,104,741 992,324,806
29
Xerox
Income Stock
Fund Fund Total
- - 84,552,691
- - 624,376,931
- - 142,658,146
- - 250,835,614
67,314,860 - 67,314,860
- 89,595,999 89,595,999
67,314,860 89,595,999 1,259,334,241
30
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.
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
December 31, 1997 is as follows:
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Xerox Corporation
Profit Sharing and
Savings Plan $ 13,554,004 61,795,482 29,509,146 144,050,892
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. 780,911 2,863,438 1,595,595 10,664,884
Xerox Corporation
Retirement
Income Guarantee
Plan - - - 751,651,169
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. - - - 85,957,861
Total $ 14,334,915 64,658,920 31,104,741 992,324,806
31
Xerox
Income Stock
Fund Fund Total
46,329,389 82,563,649 377,802,562
5,678,877 7,032,350 28,616,055
13,397,824 - 765,048,993
1,908,770 - 87,866,631
67,314,860 89,595,999 1,259,334,241
32
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.
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Statement of Changes in Net Assets of the Master Trust for the
year ended December 31, 1996 is as follows:
Small
International Company
Stock U.S. Stock Stock All Other
Pool Pool Pool Pool
Additions:
Transfers in $ 17,970,853 23,688,458 18,160,218
161,002,215
Investment earnings:
Interest 1,849,864 7,457,727 5,679,022
79,669,309
Dividends 11,016,178 62,560,466 3,265,515
26,621,520
Net appreciation
(depreciation) 174,079,634 206,545,174 149,114,478
185,387,318
Margin variation on
futures
contracts (54,411) 16,271,835 8,279,360
(588,118)
Other 552,365 101,265 254,250
2,267,517
Total investment
Earnings 187,443,630 292,936,467 166,592,625
293,357,546
Total additions 205,414,483 316,624,925 184,752,843
454,359,761
Deductions:
Administrative
Expenses 6,365,164 2,184,620 3,132,546
13,641,792
Transfers out 7,506,744 6,729,045 6,077,292
325,510,912
Total deductions 13,871,908 8,913,665 9,209,838
339,152,704
Transfers between
fund/pools (2,519,923) 153,282,377 27,894,150
(118,573,853)
Net assets:
Beginning of
year 777,276,401 1,359,853,774 588,669,404
1,946,987,004
End of year $ 966,299,053 1,820,847,411 792,106,559
1,943,620,208
33
Xerox Segregated
Income Stock Assets
Fund Fund Fund Total
(see note 4)
60,018,213 25,611,224 - 306,451,181
70,300,811 57,074 1,615,842 166,629,649
3 4,326,332 - 107,790,014
(5,232,588) 27,564,968 - 737,458,984
(169,870) - - 23,738,796
92,595 10,768 - 3,278,760
64,990,951 31,959,142 1,615,842 1,038,896,203
125,009,164 57,570,366 1,615,842 1,345,347,384
2,095,064 144,976 - 27,564,162
139,266,050 11,772,766 - 496,862,809
141,361,114 11,917,742 - 524,426,971
(84,274,169) 27,076,309 (2,884,891) -
1,098,333,593 141,057,632 1,269,049 5,913,446,857
997,707,474 213,786,565 - 6,734,367,270
34
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.
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 December 31, 1996 is as follows:
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
International
Stock Pool $ 24,023,484 - - 157,054,982
U.S. Stock Pool - 23,621,893 - 267,129,954
Small Company
Stock Pool - - 25,610,108 137,849,971
All Other Pool - - - 279,715,754
Income Fund - - - -
Xerox Stock
Fund - - - - _
Total $ 24,023,484 23,621,893 25,610,108 841,750,661
35
Xerox Segregated
Income Stock Asset
Fund Fund Fund Total
- - - 181,078,466
- - - 290,751,847
- - - 163,460,079
- - - 279,715,754
62,895,887 - 1,615,842 64,511,729
- 31,814,166 - 31,814,166
62,895,887 31,814,166 1,615,842 1,011,332,041
36
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.
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
December 31, 1996 is as follows:
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Xerox Corporation Profit
Sharing and
Savings Plan $ 22,791,824 22,532,976 24,394,588
123,085,243
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.* 1,231,660 1,088,917 1,215,520
7,863,559
Xerox Corporation Retirement
Income Guarantee
Plan - - -
637,283,175
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. - - -
73,427,145
XDS Investment Plan - - -
91,539
Total $ 24,023,484 23,621,893 25,610,108
841,750,661
* 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.
37
Xerox Segregated
Income Stock Asset
Fund Fund Fund Total
43,834,849 29,708,452 1,124,757
267,472,689
5,157,271 2,105,714 135,231
18,797,872
12,226,058 - 330,112
649,839,345
1,677,709 - 25,742
75,130,596
- - -
91,539
62,895,887 31,814,166 1,615,842
1,011,332,041
38
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.
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The Joint Administrative Board (JAB) is responsible for
establishing investment guidelines, reviewing the investment
decisions and reviewing investment results. The JAB consists
at present of three Xerox Corporation representatives and five
union representatives.
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 on the cost of the
investments, developments concerning the portfolio of
investments of the private placements, and such other factors
as the managing general partners of these investments consider
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 years ended December
31, 1997 and 1996 were 6.8% and 7.3%, respectively.
(ii) The crediting interest rates at December 31, 1997 and 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 and the associated
wrapper for synthetic GIC's at December 31, 1997 and 1996
was $274,344,245 and $588,280,797, respectively. Contract
values were $278,816,783 and $584,047,966 at December 31,
1997 and 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.
39
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.
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 year
ended December 31, 1997 is as follows:
<CAPTION>
U.S. Small
International Stock Company All Income
Xerox
Stock Stock Other
Stock
Pool Pool Pool Pool Fund
Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at
quoted
market value:
Short-term and
fixed income
investments $ (2,172,765) - - 38,187,490 2,147,350 - 38,162,075
Xerox common
Stock - - - - - 84,304,883 84,304,883
Other equity
Investments 74,356,497 592,165,194 133,629,677 75,517,407 - - 875,668,775
Investments at
estimated
fair value:
Interest in real
estate trusts - - - (8,319,810) - - (8,319,810)
Other investments - - - 29,201,815 - - 29,201,815
Total $ 72,183,732 592,165,194 133,629,677 134,586,902 2,147,350 84,304,883 1,019,017,738
</TABLE>
40
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.
Notes to Financial Statements, Continued
(3) Master Trust, Continued
<TABLE>
The net appreciation (depreciation) of investments for the year
ended December 31, 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 $ (1,209,445) 24,423 - 30,370,038 (5,232,588) - 23,952,428
Xerox common
Stock - - - - - 27,564,968 27,564,968
Other equity
Investments 175,289,079 206,520,751 149,114,478 92,988,950 - - 623,913,258
Investments at
estimated
fair value:
Interest in real
estate trusts - - - 869,897 - - 869,897
Other investments - - - 61,158,433 - - 61,158,433
Total $ 174,079,634 206,545,174 149,114,478 185,387,318 (5,232,588) 27,564,968 737,458,984
</TABLE>
There are no investments in the Plan that represents 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 December 31, 1996, the Xerox retirement and savings
plans have received $67.6 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 future 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.
41
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.
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. The total number of units and net asset value per
unit outstanding during the year ended December 31, 1997 was as
follows:
International Fund U.S. Stock Fund Small Company Fund
Units Unit Units Unit Units Unit
Outstanding Value Outstanding Value Outstanding Value
January 31 5,239,115 $1.543425 4,406,217 $1.728658 4,388,720 $1.747487
February 28 5,341,029 1.562208 4,497,210 1.740928 4,604,685 1.694722
March 31 5,888,573 1.575980 5,116,762 1.658333 5,292,188 1.616296
April 30 5,976,454 1.588181 5,196,816 1.751299 5,387,273 1.611924
May 31 6,116,208 1.659004 5,232,405 1.866003 5,420,222 1.790273
June 30 6,240,107 1.730076 5,317,968 1.944255 5,399,110 1.878601
July 31 6,384,349 1.782436 5,507,272 2.108241 5,453,861 2.005116
August 31 6,350,969 1.672465 5,519,315 2.010197 5,448,500 2.032599
September 30 6,398,872 1.792312 5,648,647 2.132616 5,572,707 2.181263
October 31 6,404,805 1.648348 5,762,266 2.063432 5,666,433 2.058766
November 30 6,170,905 1.642708 5,915,669 2.143173 5,917,651 2.034271
December 31 5,545,281 1.678099 5,860,645 2.182085 5,736,340 2.017311
Balanced Fund Income Fund Xerox Stock Fund
Units Unit Units Unit Units Unit
Outstanding Value Outstanding Value Outstanding Value
January 31 3,634,981 $13.978013 13,168,371 $ 6.521293 2,322,531 $ 7.688210
February 28 3,658,895 14.012611 13,032,286 6.549495 2,377,978 8.205805
March 31 3,879,230 13.655406 12,792,540 6.565563 2,494,075 7.508071
April 30 3,911,827 14.002261 12,684,713 6.609874 2,530,923 8.121978
May 31 3,917,352 14.697693 12,669,561 6.647454 2,536,632 8.950173
June 30 3,960,669 15.241481 12,478,600 6.690273 2,570,875 10.460962
July 31 3,999,184 16.038329 12,426,027 6.750195 2,566,887 10.942996
August 31 3,998,824 15.663793 12,261,985 6.768509 2,614,097 10.046536
September 30 4,013,888 16.426774 12,115,934 6.816442 2,627,063 11.236564
October 31 4,029,870 16.027899 11,891,043 6.864514 2,682,074 10.582841
November 30 4,033,987 16.190160 11,679,523 6.886846 2,736,029 10.361126
December 31 4,000,763 16.375997 11,715,189 6.931774 2,869,738 9.877945
42
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.
Notes to Financial Statements, Continued
(5) Unit Values, Continued
The total number of units and net assets value per unit
outstanding during the year ended December 31, 1996 was as
follows:
International Fund U.S. Stock Fund Small Company Fund
Units Unit Units Unit Units Unit
Outstanding Value Outstanding Value Outstanding Value
January 31 3,334,551 $1.298843 2,607,160 $1.384328 2,591,438 $1.345363
February 29 3,419,705 1.311633 2,843,695 1.398277 2,630,400 1.402304
March 31 3,593,568 1.351739 3,327,284 1.410611 2,772,728 1.453844
April 30 3,902,332 1.387228 3,808,249 1.426560 2,922,666 1.551849
May 31 4,305,499 1.395861 3,918,755 1.458338 3,344,836 1.611155
June 30 4,540,941 1.411045 3,997,087 1.459900 3,639,333 1.551550
July 31 4,709,658 1.352980 4,100,890 1.386290 3,995,570 1.434285
August 31 4,760,960 1.383398 4,090,626 1.420414 4,082,210 1.529633
September 30 4,713,973 1.427807 4,139,591 1.506957 4,019,906 1.608958
October 31 5,076,899 1.443572 4,150,550 1.542665 4,066,685 1.609340
November 30 5,189,617 1.518698 4,190,843 1.662408 4,165,680 1.685160
December 31 5,093,127 1.542035 4,318,074 1.631667 4,293,189 1.716124
Balanced Fund Income Fund Xerox Stock Fund
Units Unit Units Unit Units Unit
Outstanding Value Outstanding Value Outstanding Value
January 31 3,408,036 $11.594012 15,254,214 $6.131268 1,576,864 $5.289206
February 29 3,397,928 11.698504 14,836,899 6.149365 1,800,655 5.597323
March 31 3,436,271 11.902984 14,416,534 6.168735 1,809,693 5.383233
April 30 3,552,393 12.138867 14,294,019 6.193430 1,833,208 6.293252
May 31 3,600,918 12.333157 14,020,252 6.222871 1,851,268 6.767969
June 30 3,614,207 12.360292 13,740,468 6.262955 1,993,288 6.941962
July 31 3,630,066 11.918603 13,594,380 6.295800 2,075,992 6.539139
August 31 3,636,415 12.212231 13,554,689 6.330015 2,130,580 7.120918
September 30 3,598,317 12.747171 13,422,642 6.375039 2,238,745 7.001655
October 31 3,583,903 12.938311 13,408,169 6.425139 2,247,888 6.053273
November 30 3,596,567 13.604205 13,273,695 6.464303 2,298,425 6.388306
December 31 3,589,255 13.614407 13,077,944 6.487638 2,330,563 6.899738
43
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.
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 1996
Net assets available for
plan benefits as reported
in the Plan financial
statements $ 225,995,783 186,623,132
Benefit claims payable
reported on line 31g
of Form 5500 - (122,742)
Net assets available for
plan benefits as reported
in the Plan Form 5500 $ 225,995,783 186,500,390
The following is a reconciliation of benefits paid per the
financial statements to the Form 5500:
December 31,
1997 1996
Benefits paid to
participants as reported
in the Plan financial
statements $ 10,052,235 17,551,178
Add: Amounts allocated to
withdrawing participants
at December 31 - 122,742
Less: Amounts allocated to
withdrawing participants
at December 31, 1996 and
1995, respectively (122,742) 1,875,933)
Benefits paid to
participants as reported
in the Form 5500 $ 9,929,493 15,797,987
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.
44
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.
Notes to Financial Statements, Continued
(7) Stock Split
In May 1996, the shareholders of the plan sponsor approved a
three-for-one stock split of the Company's common stock. The
stock split does not impact the value of participants' interest
in the Xerox Stock Fund.
Schedule 1
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.
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) $172,619,873
$209,330,356
* 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 -
$12,783,806
* Party-in-interest
(1) See note 3.
Independent Auditors' Report
The Plan Administrator and Participants
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.:
We have audited the accompanying statements of net assets
available for plan benefits of 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. (Plan) as of December 31, 1997 and 1996, 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 December 31, 1997
and 1996, 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 performed 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 the 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. These
supplemental schedules are the responsibility of the Plan's
management. 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 net
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.
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. 2-86275 and No. 333-22037) on Form S-8 of Xerox
Corporation of our report dated April 30, 1998, relating to the
statements of net assets available for plan benefits of 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. as of December 31, 1997 and 1996, 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 December 31, 1997 Annual Report on Form 11-K of 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.
Rochester, New York
June 29, 1998
