<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: December 31, 1998
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 person who administer the plan have duly caused this actual report
to be signed on its behalf by the undersigned who 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
Plan Administrator
Stamford, Connecticut
Dated June 28, 1999
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, 1998 and 1997
(With Independent Auditors' Report Thereon)
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, 1998
(In thousands)
Fund Information
Small
International Company Balanced Fund
Stock U.S. Stock Stock Fifty/ More
Fund Fund Fund Fifty Bonds
Assets:
Investment in
Master Trust $ 8,566 22,028 10,488 1,655 741
Participant notes
Receivable - - - - -
Employer
Contributions
receivable 63 221 94 41 27
Total assets 8,629 22,249 10,582 1,696 768
Due from (to)
other funds (13) (34) (16) (2) (1)
Net assets available
for plan
benefits $ 8,616 22,215 10,566 1,694 767
The accompanying notes are an integral part of the financial statements.
Enhanced Xerox
More Bond Income Stock Marketplace Employee
Stocks Fund Fund Fund Window Loan Fund Total
76,223 406 79,433 53,195 1,090 - 253,825
- - - - - 17,299 17,299
1,079 13 154 649 14 - 2,355
77,302 419 79,587 53,844 1,104 17,299 273,479
(117) (1) (122) (81) (2) 389 -
77,185 418 79,465 53,763 1,102 17,688 273,479
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
(In thousands)
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Assets:
Investment in
Master Trust $ 9,841 12,796 11,520 65,925
Participant
notes receivable - - - -
Employer
contributions
receivable 141 399 227 2,535
Total assets 9,982 13,195 11,747 68,460
Liabilities:
Accrued expenses
and other
liabilities 18 9 15 78
Due from (to)
other funds (517) 8 72 (280)
Due from (to)
other plans - (7) (6) (50)
Net assets available
for plan benefits $ 9,447 13,187 11,798 68,052
The accompanying notes are an integral part of the financial statements.
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
81,395 27,854 - 209,331
- - 12,784 12,784
254 919 - 4,475
81,649 28,773 12,784 226,590
114 6 - 240
(72) 789 - -
(2) (290) - (355)
81,461 29,266 12,784 225,995
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, 1998
(In thousands)
Fund Information
Small Balanced Fund
International Company
Stock U.S. Stock Stock Fifty/ More
Fund Fund Fund Fifty Bonds
Contributions:
Employer $ 174 390 251 41 27
Employees' -
voluntary 805 1,350 1,163 6 2
Rollovers from
external plans 8 57 30 - -
Rollovers from
internal plans 28 28 4 - -
Total contributions 1,015 1,825 1,448 47 29
Net income (loss) from
Master Trust
investments, net of
administrative
expenses 1,331 4,242 (664) 111 36
Interest income on
participant
notes receivable - - - - -
Total 2,346 6,067 784 158 65
Benefit payments (204) (608) (249) (7) (1)
Transfers
among funds (2,739) 3,720 (1,538) 1,543 703
Transfer
between plans (234) (151) (229) - -
Net increase
(decrease) in
net assets available
for plan benefits (831) 9,028 (1,232) 1,694 767
Net assets available
for plan benefits
Beginning of year 9,447 13,187 11,798 - -
End of year $ 8,616 22,215 10,566 1,694 767
The accompanying notes are an integral part of the financial statements.
Enhanced Xerox
More Bond Income Stock Marketplace Employee
Stocks Fund Fund Fund Window Loan Fund Total
1,707 13 890 975 14 - 4,482
4,289 3 4,535 2,502 2 - 14,657
38 - 661 70 - - 864
962 - 1,264 198 - - 2,484
6,996 16 7,350 3,745 16 - 22,487
10,912 15 4,866 18,658 64 - 39,571
- - - - - 1,228 1,228
17,908 31 12,216 22,403 80 1,228 63,286
(2,923) (1) (5,593) (1,019) (2) - (10,607)
(3,946) 388 (6,655) 3,772 1,024 3,728 -
(1,906) - (1,964) (659) - (52) (5,195)
9,133 418 (1,996) 24,497 1,102 4,904 47,484
68,052 - 81,461 29,266 - 12,784 225,995
77,185 418 79,465 53,763 1,102 17,688 273,479
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
(In thousands)
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Contributions:
Employees' -
voluntary $ 848 1,017 1,026 3,996
Employer 252 519 359 3,155
1,100 1,536 1,385 7,151
Net income from
Master Trust
investments, net of
administrative
expenses 781 2,863 1,596 10,665
Interest income on
Participant
notes receivable - - - -
1,881 4,399 2,981 17,816
Benefit payments (339) (194) (221) (2,254)
Transfers among funds (311) 1,624 1,222 2,472
Transfer between
plans - (7) (6) (50)
Net increase
(decrease)
in net assets
available
for plan benefits 1,231 5,822 3,976 17,984
Net assets available
for plan
benefits:
Beginning of
Year 8,216 7,365 7,822 50,068
End of year $ 9,447 13,187 11,798 68,052
The accompanying notes are an integral part of the financial statements.
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
5,173 1,651 - 13,711
1,079 1,116 - 6,480
6,252 2,767 - 20,191
5,679 7,032 - 28,616
- - 973 973
11,931 9,799 973 49,780
(6,561) (484) - (10,053)
(9,092) 3,856 229 -
(2) (290) - (355)
(3,724) 12,881 1,202 39,372
85,185 16,385 11,582 186,623
81,461 29,266 12,784 225,995
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, 1998 and 1997
(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 and
the 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
are eligible to participate in the 401(K) savings portion of the Plan
immediately upon hire.
Plan Amendment
As of January 1, 1998, each employee shall immediately become a participant
under the Plan for the purpose of determining eligibility.
Effective January 1, 1998, the Company modified the profit sharing payout
amounts beginning with the Plan year ended December 31, 1998. In 1998, profit
sharing distributions were 50% in cash and 50% in stock options (stock options
are not a component of the Plan). In 1999, profit sharing payouts will be 50%
in cash, 25% in deferred compensation and 25% in stock options. See Xerox
Profit Sharing Contributions disclosure in note 1 for further information.
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 each business 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. There were no benefits allocated from
the Plan for participants at December 31, 1998 or 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. 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 1998 contribution recorded on March 12, 1999 was $2,355.
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 Profit Sharing Contributions
Eligible employees may receive a profit sharing contribution from the sponsor.
In prior years the contribution payout has ranged from zero to 10% of pay and
was 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.
In 1999 and forward, the maximum profit sharing payout will be 15%. In any
given year, the payout bears a 1:1 relationship to earnings per share (EPS)
growth up to 15%. However, if EPS growth is below 5%, there is no payout.
Prior to 1998, an employee may have received the contribution in cash or may
have elected 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 profit sharing
contributions.
Under the new profit sharing format, a payout will have three components. They
are as follows: (i) 50% of the payout will come in the form of cash which can
be deferred into the savings plan, (ii) 25% of the payout is automatically
deferred to the Xerox Stock fund and (iii) 25% of the payout is provided in the
form of stock options, which are not a component of the Plan.
During 1998, the sponsor's ROA was 17.5%, which resulted in a maximum profit
sharing contribution for all eligible active employees at December 31, 1998
equal to 5% of pay or $11,443 and 5% in stock options which are not a component
of the Plan. Participants elected to invest $2,355 into the Plan at December
31, 1998 (dollars in thousands).
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 $21,234. Participants elected to invest $4,475 into
the Plan at December 31, 1997 (dollars in thousands).
Investment Funds
As further described in note 3, the investment funds are part of the Xerox
Trust Agreement to Fund Retirement Plans (Master Trust). Effective October 1,
1998, the sponsor added four new investment funds: Balanced Fund - Fifty/
Fifty, Balanced Fund - More Bond, Enhanced Bond Fund and Marketplace Window.
Additionally, the Balanced Fund name was changed to Balanced Fund - More
Stocks. Employees can direct their plan accounts to one or more of the
following ten investment funds:
International Stock Fund - Invests primarily in stocks of companies outside
the U.S.
U.S. Stock Fund - Invests primarily in stocks of medium to large U.S.
companies.
Small Company Stock Fund - Invests primarily in stocks of smaller U.S.
companies.
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
Balanced Fund - Fifty/Fifty - Usually invests approximately 50% in stocks and
50% in bonds; some private placements and cash. The mix may shift with market
outlook.
Balanced Fund - More Bonds - Usually invests 30% in stocks, most of the rest in
bonds, some private placements and cash. The mix may shift with market
outlook.
Balanced Fund - More Stocks - Usually invests approximately 70% in stocks: some
private placements and cash. The mix may shift with market outlook.
Enhanced Bond Fund - Invests in intermediate duration; approximately 70% high
quality bonds and 30% high-yield lower quality bonds.
Income Fund - Invests short to intermediate duration, high quality bonds;
contracts with insurance companies and banks.
Xerox Stock Fund - Invests in Xerox Corporation common stock and some cash for
administrative purposes.
Marketplace Window - Offers access to no-load mutual funds outside of Xerox.
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, 1998, market value on loans approximates fair value.
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
(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, 1998:
Xerox Corporation Profit Sharing and Savings Plan;
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 nine investment pools - the International Stock Pool, U.S.
Stock Pool, Small Company Stock Pool, Other Equity Pool, Other Fixed Pool, Bond
Pool, Income Fund, Xerox Stock Fund, and Marketplace Window.
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. In 1998, all
accrued administrative expenses are recorded at the Master Trust level only,
and as a result, are net against the investment in Master Trust at the Plan
level. For the year ended December 31, 1997, the accrued administrative
expenses and due from (to) other funds activity is recorded at both the Master
Trust and plan level.
The Expense Pool represents administrative expenses that are attributable only
to the three Balanced Funds. It is not an investment pool. These expenses are
allocated from the pool level to the Balanced Fund - Fifty/Fifty, Balanced Fund
- - More Bonds, and the Balanced Fund - More Stocks, based on the net asset fund
balances at the end of each month.
In October 1998, there was pool restructure. Assets of the All Other Pool were
transferred to the Other Equity Pool and the Bond Pool. The pool restructure
was done in conjunction with the addition of new investment funds as discussed
in note 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.
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, 1998 is as
follows (in thousands):
Small
International Company
Stock U.S. Stock Stock All Other Income
Assets Pool Pool Pool Pool Fund
Cash (overdraft) $ 16,520 (141) 1,088 - (4,469)
Receivables:
Dividends 1,371 2,687 501 - -
Interest 198 638 215 - 9,664
Due from brokers 3,227 7,697 1,783 - 77,389
Other 30 11 (1) - (225)
Total receivables 4,826 11,033 2,498 - 86,828
Investments at fair
value:
At quoted market
value:
Short-term
Investments 29,261 160,154 67,680 - 188,727
Fixed income
Investments 3,637 - - - 781,381
Equity securities:
Xerox common
stock - - - - -
Other 1,033,271 2,842,337 613,346 - 5,973
At estimated fair
value:
Interest in real
estate trusts - - - - -
Other investments - - - - -
Investments at
contract value:
Investment
contracts with
insurance companies
and banks - - - - 62,861
Total investments1,066,169 3,002,491 681,026 - 1,038,942
Total assets 1,087,515 3,013,383 684,612 - 1,121,301
Liabilities
Due to brokers (3,983) (6,052) (2,607) - (183,652)
Other (2,053) (1,692) (751) - (500)
Net assets $ 1,081,479 3,005,639 681,254 - 937,149
Xerox Other Other
Stock Equity Fixed Marketplace Bond Expense
Fund Pool Pool Window Pool Pool Total
- - - - 15,757 - 28,755
1,962 22 - - - - 6,543
33 1,403 660 - 16,511 - 29,322
- 6,359 - - 17,986 - 114,441
10 - - - (143) - (318)
2,005 7,784 660 - 34,354 - 149,988
9,401 335,740 159,972 - 78,006 - 1,028,941
- 3,221 - - 1,519,208 - 2,307,447
632,445 - - - - - 632,445
- 114,059 - 19,796 104,887 - 4,733,669
- 31,562 - - - - 31,562
- 208,894 - - - - 208,894
- - - - - - 62,861
641,846 693,476 159,972 19,796 1,702,101 - 9,005,819
643,851 701,260 160,632 19,796 1,752,212 - 9,184,562
- (6,359) - - (115,955) - (318,608)
(92) (311) (162) - (1,374) (72) (7,007)
643,759 694,590 160,470 19,796 1,634,883 (72) 8,858,947
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,
1998 is as follows (in thousands):
Small
International Company Balanced Balanced
Stock U.S. Stock Stock Fund Fund
Fund Fund Fund Fifty/Fifty More Bonds
International
Stock Pool $ 184,457 - - 6,100 2,870
U.S. Stock Pool - 426,768 - 17,536 8,252
Small Company
Stock Pool - - 199,672 3,275 1,541
All Other Pool - - - - -
Income Fund - - - - -
Xerox Stock Fund - - - - -
Other Equity Pool - - - 4,936 2,010
Other Fixed Pool - - - 2,700 513
Marketplace Window - - - - -
Bond Pool - - - 10,987 5,170
Expense Pool - - - - -
Total $ 184,457 426,768 199,672 45,534 20,356
Balanced Xerox
Fund Enhanced Income Stock Marketplace
More Stocks Bond Fund Fund Fund Window Total
888,052 - - - - 1,081,479
2,553,083 - - - - 3,005,639
476,766 - - - - 681,254
- - - - - -
- - 937,147 - - 937,149
- - - 643,759 - 639,759
687,644 - - - - 694,590
157,257 - - - - 160,470
- - - - 19,796 19,796
1,599,517 19,209 - - - 1,634,883
(72) - - - - (72)
6,362,247 19,209 937,147 634,759 19,796 8,858,947
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
Investment in the Master Trust for all participating plans as of December 31,
1998 is as follows (in thousands):
Small Balanced Balanced
International Company Fund Fund
Stock U.S. Stock Stock Fifty/ More
Fund Fund Fund Fifty Bonds
Xerox Corporation
Profit Sharing
and Savings Plan $175,891 404,740 189,184 43,879 19,615
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. 8,566 22,028 10,488 1,655 741
Xerox Corporation
Retirement
Income Guarantee
Plan - - - - -
Retirement Income Guarantee
Plan of Xerox
Corporation and The
Xerographic Division,
Union of Needletrades,
Industrial and Textile
Employees, A.F.L.-
C.I.O. - C.L.C - - - - -
Total $ 184,457 426,768 199,672 45,534 20,356
Balanced Xerox
Fund Enhanced Income Stock Marketplace
More Stocks Bond Fund Fund Fund Window Total
1,102,063 18,803 692,898 590,564 18,706 3,256,343
76,223 406 79,433 53,195 1,090 253,825
4,686,540 - 143,631 - - 4,830,171
497,421 - 21,187 - - 518,608
6,362,247 19,209 937,149 643,759 19,796 8,858,947
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 Net Assets of the Master Trust as of December 31, 1997 is as
follows (in thousands):
Small
International Company
Stock U.S. Stock Stock All Other
Assets Pool Pool Pool Pool
Cash (overdraft) $ (440) 267 (369) (13)
Receivables:
Dividends 1,189 2,006 204 109
Interest 241 750 788 14,841
Due from brokers 11,242 8,371 16,328 85,683
Other - 584 - -
Total receivables 12,672 11,711 17,320 100,633
Investments at fair
value:
At quoted market
value:
Short-term
Investments 44,106 163,878 229,101 251,836
Fixed income
Investments 4,974 - - 1,254,278
Equity securities:
Xerox common
stock - - - -
Other 974,400 2,325,093 729,193 358,595
At estimated fair
value:
Interest in real
Estate trusts - - - 75,286
Other investments - - - 139,546
Investments at
contract value:
Investment
contracts with
insurance companies
and banks - - - -
Total
investments 1,023,480 2,488,971 958,294 2,079,541
Total assets 1,035,712 2,500,949 975,245 2,180,161
Liabilities
Due to brokers 2,047 2,553 155 138,661
Other 6,688 - 2,232 6,656
Net assets $ 1,026,977 2,498,396 972,858 2,034,844
Xerox
Income Stock
Fund Fund Total
(92) - (647)
- 1,461 4,969
8,193 5 24,818
13,113 - 134,737
- 7,033 7,617
21,306 8,499 172,141
74,440 432 763,793
588,632 - 1,847,884
- 337,074 337,074
2,168 - 4,389,449
- - 75,286
- - 139,546
278,817 - 278,817
944,057 337,506 7,831,849
965,271 346,005 8,003,343
38,230 - 181,646
140 - 15,716
926,901 346,005 7,805,981
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(in thousands):
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
International Stock
Pool $ 168,558 - - 858,419
U.S. Stock
Pool - 259,252 - 2,239,144
Small Company
Stock Pool - - 210,374 762,484
All Other Pool - - - 2,034,844
Income Fund - - - -
Xerox Stock Fund - - - -
Total $ 168,558 259,252 210,374 5,894,891
Xerox
Income Stock
Fund Fund Total
- - 1,026,977
- - 2,498,396
- - 972,858
- - 2,034,844
926,901 - 926,901
- 346,005 346,005
926,901 346,005 7,805,981
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(in thousands):
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Xerox Corporation
Profit Sharing
and Savings
Plan* $ 159,252 246,464 198,802 936,262
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. 9,306 12,788 11,572 65,516
Xerox Corporation
Retirement
Income Guarantee
Plan - - - 4,391,615
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
Total $ 168,558 259,252 210,374 5,894,891
* 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.
Xerox
Income Stock
Fund Fund Total
636,139 317,658 2,494,577
81,207 28,347 208,736
183,117 - 4,574,732
26,438 - 527,936
926,901 346,005 7,805,981
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 as of December 31, 1998
is as follows (in thousands):
Small
International Company
Stock U.S. Stock Stock All Other Income
Pool Pool Pool Pool Fund
Additions:
Transfers in $ 43,514 139,522 51,756 418,842 126,050
Investment
earnings:
Interest 2,206 8,198 6,948 59,043 57,481
Dividends 19,994 26,128 2,502 12,123 435
Net appreciation
(depreciation)140,075 663,920 (6,208) 25,060 5,737
Margin variation
on futures
contracts 1,217 7,864 350 13,831 (287)
Other (775) 1,911 639 22,210 (104)
Total investment
earnings 162,717 708,021 4,231 132,267 63,262
Total additions 206,231 847,543 55,987 551,109 189,312
Deductions:
Administrative
expenses (8,531) (7,852) (4,300) (7,872) (2,341)
Transfers out (53,101) (58,284) (52,728) (442,927) (176,723)
Total deductions (61,632) (66,136) (57,028) (450,799) (179,064)
Transfers between
funds/pools (90,097) (274,164) (290,563) 313,106 -
Pool restructure - - - (2,448,260) -
Net assets:
Beginning
of year 1,026,977 2,498,396 972,858 2,034,844 926,901
End of year $1,081,479 3,005,639 681,254 - 937,149
Xerox Other Other
Stock Equity Fixed Marketplace Bond Expense
Fund Pool Pool Window Pool Pool Total
102,002 125,652 118,979 18,839 18,136 - 1,163,292
445 4,308 3,270 - 17,068 - 158,967
7,453 3,749 - 569 1,195 - 74,148
221,414 60,417 14,876 735 16,842 - 1,142,868
- 7,862 1,321 - (7,125) - 25,033
- 3,156 (2) - (439) - 26,596
229,312 79,492 19,465 1,304 27,541 - 1,427,612
331,314 205,144 138,444 20,143 45,677 - 2,590,904
(668) (301) (346) (1) (1,443) (391) (34,046)
(32,892)(600,735) (85,628) (346) (528) - (1,503,892)
(33,560)(601,036) (85,974) (347) (1,971) (391) (1,537,938)
- 230,399 108,000 - 3,000 319 -
- 860,083 - - 1,588,177 - -
346,005 - - - - - 7,805,981
643,759 694,590 160,470 19,796 1,634,883 (72) 8,858,947
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 (loss) from Master Trust investments, net of
administrative expenses, by investment pool and fund for December 31, 1998 is
as follows (in thousands):
Small
International Company Balanced Balanced
Stock U.S. Stock Stock Fund Fund
Fund Fund Fund Fifty/Fifty More Bonds
International
Stock Pool $ 25,486 - - 875 412
U.S. Stock Pool - 86,279 - 1,167 397
Small Company
Stock Pool - - (9,729) 66 31
All Other Pool - - - - -
Income Fund - - - - -
Xerox Stock Fund - - - - -
Other Equity Pool - - - 538 253
Other Fixed Pool - - - 130 61
Marketplace Window - - - - -
Bond Pool - - - 176 83
Expense Pool - - - - -
Total $ 25,486 86,279 (9,729) 2,952 1,237
Balanced Xerox
Fund Enhanced Income Stock Marketplace
More Stocks Bond Fund Fund Fund Window Total
127,413 - - - - 154,186
612,326 - - - - 700,169
9,563 - - - - (69)
124,395 - - - - 124,395
- - 60,921 - - 60,921
- - - 228,644 - 228,644
78,400 - - - - 79,191
18,928 - - - - 19,119
- - - - 1,303 1,303
25,595 244 - - - 26,098
(391) - - - - (391)
996,229 244 60,921 228,644 1,303 1,393,566
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 (loss) from Master Trust Investments, net of administrative expenses,
for all participating pans for the year ended December 31, 1998 is as follows
(in thousands):
Small Balanced Balanced
International Company Fund - Fund -
Stock U.S. Stock Stock Fifty/ More
Fund Fund Fund Fifty Bonds
Xerox Corporation
Profit Sharing and
Savings Plan $ 24,155 82,037 (9,065) 2,841 1,201
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. 1,331 4,242 (664) 111 36
Xerox Corporation
Retirement
Income Guarantee
Plan - - - - -
Retirement Income
Guarantee Plan of
Xerox Corporation
and The Xerographic
Division, Union of
Needletrades,
Industrial and
Textile Employees,
A.F.L. - C.I.O. -
C.L.C. - - - - -
Total $ 25,486 86,279 (9,729) 2,952 1,237
Balanced
Fund- Enhanced Xerox
More Bond Income Stock Marketplace
Stocks Fund Fund Fund Window Total
161,361 229 43,553 209,986 1,239 517,537
10,912 15 4,866 18,658 64 39,571
746,740 - 10,952 - - 757,692
77,216 - 1,550 - - 78,766
996,229 244 60,921 228,644 1,303 1,393,566
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 (in thousands):
Small
International Company
Stock U.S. Stock Stock All Other
Pool Pool Pool Pool
Additions:
Transfers in $ 22,392 30,110 27,308 79,711
Investment
earnings:
Interest 1,818 5,765 7,611 93,314
Dividends 18,530 29,592 4,125 29,467
Net appreciation
(depreciation) 72,184 592,165 133,630 134,587
Margin variation
on futures
contracts (1,678) 926 2,147 3,096
Other 1,078 611 540 9,486
Total investment
earnings 91,932 629,059 148,053 269,950
Total additions 114,324 659,169 175,361 349,661
Deductions:
Administrative
expenses 7,380 4,682 5,395 19,115
Transfers out 9,718 10,240 9,109 259,992
Total deductions 17,098 14,922 14,504 279,107
Transfers between
funds/pools (36,548) 33,302 19,894 20,670
Net assets:
Beginning
of year 966,299 1,820,847 792,107 1,943,620
End of year $ 1,026,977 2,498,396 972,858 2,034,844
Xerox
Income Stock
Fund Fund Total
47,685 31,600 238,806
62,740 102 171,350
376 5,493 87,583
2,147 84,305 1,019,018
112 - 4,603
4,484 20 16,219
69,859 89,920 1,298,773
117,544 121,520 1,537,579
2,543 324 39,439
119,045 18,291 426,395
121,588 18,615 465,834
(66,762) 29,313 (131)
997,707 213,787 6,734,367
926,901 346,005 7,805,981
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 (in thousands):
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
International Stock
Pool $ 14,334 - - 70,218
U.S. Stock
Pool - 64,659 - 559,718
Small Company
Stock Pool - - 31,105 111,553
All Other Pool - - - 250,835
Income Fund - - - -
Xerox Stock Fund - - - -
Total $ 14,334 64,659 31,105 992,324
Xerox
Income Stock
Fund Fund Total
- - 84,552
- - 624,377
- - 142,658
- - 250,835
67,316 - 67,316
- 89,596 89,596
67,316 89,596 1,259,334
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 (in
thousands):
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Xerox Corporation Profit
Sharing and
Savings Plan $ 13,553 61,796 29,509 144,050
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. 781 2,863 1,596 10,665
Xerox Corporation Retirement
Income Guarantee Plan - - - 751,651
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. - - - 85,958
Total $ 14,334 64,659 31,105 992,324
Xerox
Income Stock
Fund Fund Total
46,330 82,564 377,802
5,679 7,032 28,616
13,398 - 765,049
1,909 - 87,867
67,316 89,596 1,259,334
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
With respect to the Plan, 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 the 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 (dollars in thousands):
(i) The average investment yields for the years ended December 31, 1998
and 1997 were 7.1% and 6.8%, respectively.
(ii) The crediting interest rates at December 31, 1998 and 1997 ranged
from 4.4% to 9.3%.
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
(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, 1998 and 1997 was
$63,780 and $274,344 respectively. Contract values were $62,861 and $278,817
at December 31, 1998 and 1997, 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.
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.
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 net appreciation (depreciation) of investments for the year ending December
31, 1998 is as follows (in thousands):
Small
International Company All
Stock U.S. Stock Stock Other Income
Pool Pool Pool Pool Fund
Investments at
quoted market value:
Short-term and fixed
income
investments $ 310 - - 10,107 5,737
Xerox common
Stock - - - - -
Other equity
investments 139,765 663,920 (6,208) 2,884 -
Investments at
estimated
fair value:
Interest in real
estate trusts - - (20,107) -
Other
investments - - - 32,176 -
Total $ 140,075 663,920 (6,208) 25,060 5,737
Xerox Other Other
Stock Equity Fixed Marketplace Bond Expense
Fund Pool Pool Window Pool Pool Total
- - 14,876 - 8,444 - 39,474
221,414 - - - - - 221,414
- 57,463 - 735 8,398 - 866,957
- (4,026) - - - - (24,133)
- 6,980 - - - - 39,156
221,414 60,417 14,876 735 16,842 - 1,142,868
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 net appreciation (depreciation) of investments for the year ending December
31, 1997 is as follows (in thousands):
U.S. Small
International Stock Company All Other
Stock Pool Pool Stock Pool Pool
Investment at
quoted market
value:
Short-term
and fixed
income
investments $ (2,173) - - 38,188
Xerox common
stock - - - -
Other equity
investments 74,357 592,165 133,630 75,517
Investments at
estimated
fair value:
Interest in real
estate trusts - - - (8,320)
Other investments - - - 29,202
Total $ 72,184 592,165 133,630 134,587
Income Xerox
Fund Stock Fund Total
2,147 - 38,162
- 84,305 84,305
- - 875,669
- - (8,320)
- - 29,202
2,147 84,305 1,019,018
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
(4) 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. As of
January 1, 1998, unit values are calculated daily by dividing the total value
of net assets of each fund (reduced by employer contributions receivable not
yet received by the Master Trust, and other reconciling items) by units
outstanding at the valuation date.
The total number of units and net asset value per unit outstanding during the
year ended December 31, 1998 was as follows:
International Stock Fund U.S. Stock Fund
Units Unit Units Unit
Outstanding Value Outstanding Value
January 31 920,364 $10.382375 1,291,659 $10.099668
February 28 917,743 10.962610 1,396,344 10.877374
March 31 929,145 11.657176 1,521,651 11.420459
April 30 939,875 11.716992 1,589,919 11.548355
May 31 885,484 11.786185 1,586,323 11.334877
June 30 875,981 11.661331 1,602,319 11.805511
July 31 869,231 11.814280 1,638,896 11.677048
August 31 801,354 10.275574 1,633,809 9.990193
September 30 778,819 9.900287 1,585,081 10.570626
October 31 759,733 10.684862 1,556,811 11.456733
November 30 755,513 11.218222 1,665,713 12.135353
December 31 736,627 11.628680 1,698,600 12.968329
Balanced Fund - Fifty/Fifty Balanced Fund - More Bonds
Units Unit Units Unit
Outstanding Value Outstanding Value
January 31 - $ - - $ -
February - - - -
March 31 - - - -
April 30 - - - -
May 31 - - - -
June 30 - - - -
July 31 - - - -
August 31 - - - -
September 30 - - - -
October 31 59,367 10.535520 34,437 10.327282
November 30 98,419 10.945811 37,569 10.669218
December 31 146,790 11.274600 68,111 10.879377
Enhanced Bond Fund Income Fund
Units Unit Units Unit
Outstanding Value Outstanding Value
January 31 - $ - 8,004,190 $10.076927
February 28 - - 7,475,936 10.105522
March 31 - - 7,392,511 10.156731
April 30 - - 7,481,069 10.206823
May 31 - - 6,995,465 10.267817
June 30 - - 6,942,159 10.316044
July 31 - - 6,905,492 10.368480
August 31 - - 7,134,306 10.468176
September 30 - - 7,270,669 10.602034
October 31 56,931 9.905175 7,463,054 10.619355
November 30 54,028 10.125494 7,390,631 10.615745
December 31 40,065 10.133596 7,444,002 10.670738
Small Company Stock Fund
Units Unit
Outstanding Value
1,152,655 $9.884830
1,199,675 10.740566
1,273,539 11.292184
1,270,346 11.426224
1,264,722 10.750264
1,233,290 10.808698
1,237,790 9.932038
1,179,068 7.840207
1,141,593 8.180712
1,130,332 8.618658
1,124,406 9.071812
1,082,499 9.688692
Balanced Fund - More Stocks
Units Unit
Outstanding Value
6,424,779 $10.145639
6,506,838 10.636311
6,809,733 11.026386
6,831,274 11.119027
6,744,577 11.030174
6,711,987 11.213429
6,764,278 11.121109
6,706,497 10.007453
6,497,740 10.286159
6,397,539 10.815761
6,449,787 11.298588
6,480,952 11.761080
Xerox Stock Fund
Units Unit
Outstanding Value
2,801,232 $10.874319
3,005,216 11.964169
3,099,139 14.360530
3,169,325 15.300170
3,389,547 13.872963
3,523,815 13.772022
3,548,464 14.295476
3,510,909 11.928028
3,672,590 11.567694
3,484,772 13.194813
3,409,313 14.620633
3,309,095 16.075393
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
(4) Unit Values, Continued
The total number of units and net asset value per unit outstanding during the
year ended December 31, 1997 was as follows:
International Stock Fund U.S. Stock Fund
Units Unit Units Unit
Outstanding Value Outstanding Value
January 31 5,239,115 $1.543425 4,406,217 $1.728658
February 28 5,341,029 1.562208 4,497,210 1.740928
March 31 5,888,573 1.575980 5,116,762 1.658333
April 30 5,976,454 1.588181 5,196,816 1.751299
May 31 6,116,208 1.659004 5,232,406 1.866003
June 30 6,240,107 1.730076 5,317,968 1.944255
July 31 6,384,348 1.782436 5,507,272 2.108241
August 31 6,350,969 1.672465 5,519,315 2.010197
September 30 6,398,872 1.792312 5,648,647 2.132616
October 31 6,404,805 1.648348 5,762,266 2.063432
November 30 6,170,905 1.642708 5,915,669 2.143173
December 31 5,545,281 1.678099 5,860,645 2.182085
Balanced Fund Income Fund
Units Unit Units Unit
Outstanding Value Outstanding Value
January 31 3,634,982 $13.978013 13,168,371 $6.521293
February 28 3,658,895 14.012611 13,032,286 6.549495
March 31 3,879,230 13.655406 12,792,540 6.565563
April 30 3,911,827 14.002261 12,684,713 6.609874
May 31 3,917,352 14.697693 12,669,561 6.647454
June 30 3,960,669 15.241481 12,478,600 6.690273
July 31 3,999,184 16.038329 12,426,027 6.750195
August 31 3,998,824 15.663793 12,261,985 6.768509
September 30 4,013,888 16.426774 12,115,934 6.816442
October 31 4,029,870 16.027899 11,891,043 6.864514
November 30 4,033,987 16.190160 11,679,523 6.886846
December 31 4,000,763 16.375997 11,715,189 6.931774
Small Company Fund
Units Unit
Outstanding Value
4,388,720 $1.747487
4,604,685 1.694722
5,292,188 1.616296
5,387,273 1.611924
5,420,222 1.790273
5,399,110 1.878601
5,453,861 2.005116
5,448,500 2.032599
5,572,707 2.181263
5,666,433 2.058766
5,917,651 2.034271
5,736,340 2.017311
Xerox Stock Fund
Units Unit
Outstanding Value
2,322,532 $7.688210
2,377,978 8.205805
2,494,075 7.508071
2,530,923 8.121978
2,536,632 8.950173
2,570,875 10.460962
2,566,887 10.942996
2,614,097 10.046536
2,627,063 11.236564
2,682,074 10.582841
2,736,029 10.361126
2,869,738 9.877945
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) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for plan benefits
paid to participants as reported in the financial statements to the Form 5500
at December 31, 1998 and 1997:
December 31,
1998 1997
(in thousands)
Net assets available for plan
benefits as reported in the Plan
financial statements $ 273,479 225,996
Benefit claims payable reported
on line 31g of Form 5500 - -
Net assets available for plan
benefits as reported in the
Plan Form 5500 $ 273,479 225,996
December 31
1998 1997
(in thousands)
Benefits paid to participants
as reported in the Plan financial
statements $ 10,607 10,052
Add: Amounts allocated to withdrawing
participants at December 31, 1998 and 1997 - -
Less: Amounts allocated to withdrawing
participants at December 31, 1997 and
1996, respectively - (123)
Benefits paid to participants as reported in
the Form 5500 $ 10,607 9,929
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) Reconciliation of Financial Statements to Form 5500, Continued
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.
(6) Stock Split
In March 1999, the shareholders of the plan sponsor approved a two-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, 1998
(in thousands)
Description of investment
including
Identity of issuer, maturity date, rate of
borrower, interest, collateral, Current
lessor, or similar party par or maturity value Cost value
Investment in Master Trust (1) $ 203,099 $ 253,825
*Investment in Participant Loans to Plan participants,
Notes Receivable maturity dates through
5/31/11, interest rates
from 8.0% to 11.5% -- 17,299
per annum
* 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, 1998 and 1997, 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, 1998 and 1997, 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 it
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. This supplemental schedule is 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
May 21, 1999
EXHIBIT INDEX
Electronic
Submission
Document
Exhibit 2
(b)(1) Accountants' Consent
<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 May 21, 1999, 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, 1998 and 1997, and the related statements
of changes in net assets available for plan benefits for the year then ended
and related schedule, which report appears in the December 31, 1998 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, 1999
