<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[Mark One]
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from: to
Commission file number: 1-8133
XEROX CREDIT CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 06-1024525
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 First Stamford Place, Stamford, Connecticut 06904
(Address of principal executive offices)
(Zip Code)
(203) 325-6600
(Registrant's telephone number,
including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the latest practicable date.
Class Outstanding as of April 30, 1994
Common Stock 2,000
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a)
AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.
THIS DOCUMENT CONSISTS OF 23 PAGES.
(1)
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
XEROX CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions)
Three Months Ended
March 31,
1994 1993
Earned income:
Contracts receivable $ 93 $ 102
Total earned income 93 102
Expenses:
Interest 52 56
Operating and administrative 4 4
Total expenses 56 60
Income from continuing
operations before income taxes 37 42
Provision for income taxes 15 17
Net income $ 22 $ 25
See accompanying notes.
(2)
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XEROX CREDIT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
ASSETS
March 31, December 31,
1994 1993
Cash and cash equivalents $ 1 $ 1
Investments:
Contracts receivable 4,233 4,148
Notes receivable - Xerox and affiliates 93 71
Investment in Xerox affiliates, at equity 74 74
Unearned income (445) (437)
Allowance for losses (148) (153)
Total investments 3,807 3,703
Net assets of discontinued operations 333 357
Other assets 2 2
Total assets $ 4,143 $ 4,063
LIABILITIES, DEFERRED INCOME TAXES AND SHAREHOLDER'S EQUITY
Liabilities:
Notes payable within one year:
Commercial paper $ 1,511 $ 1,653
Current portion of notes payable
after one year 602 554
Notes payable after one year 1,266 1,079
Notes payable after one year- Xerox and affiliates 75 75
Due to Xerox Corporation, net 57 67
Accounts payable and accrued liabilities 73 74
Liabilities of business transferred 13 17
Total liabilities 3,597 3,519
Deferred income taxes 38 38
Shareholder's equity:
Common stock, no par value, 2,000 shares
authorized, issued and outstanding 23 23
Additional paid-in capital 145 145
Retained earnings 339 337
Cumulative translation adjustment 1 1
Total shareholder's equity 508 506
Total liabilities, deferred income
taxes and shareholder's equity $ 4,143 $ 4,063
See accompanying notes.
(3)
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XEROX CREDIT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
Three Months Ended
March 31,
1994 1993
Cash Flows from Operating Activities
Net income $ 22 $ 25
Adjustments to reconcile net income to
net cash provided by operating activities:
(Decrease) increase in operating assets
and liabilities, net (10) 8
Net cash provided by operating activities 12 33
Cash Flows from Investing Activities
Purchases of investments (546) (531)
Proceeds from collections of investments 464 413
Dividends 20 -
Net collections from discontinued operations 20 13
Net cash used in investing activities 62 (105)
Cash Flows from Financing Activities
(Decrease) increase in short-term debt, net (164) 316
Proceeds from long-term debt 336 -
Principal payments on long-term debt (102) (245)
Dividends (20) -
Net cash provided by financing activities 50 71
Net Change
Cash and cash equivalents, (decreased) increased - (1)
Cash and cash equivalents, beginning of period 1 2
Cash and cash equivalents, end of period $ 1 $ 1
See accompanying notes.
(4)
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XEROX CREDIT CORPORATION
Notes to Consolidated Financial Statements
(1) The consolidated financial statements presented herein have been
prepared by Xerox Credit Corporation (the "Company") in accordance with
the accounting policies described in its Annual Report on Form 10-K
for the fiscal year ended December 31, 1993 and should be read in
conjunction with the Notes to Consolidated Financial Statements
which appear in that report.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to a fair statement of the
operating results for the interim periods presented have been made.
Interim financial data presented herein are unaudited.
(2) During the first quarter of 1994, the Company sold an aggregate of $336
million in principal amount of medium-term notes. Of this amount, $105
million were floating rate notes which mature in 1996 and bear interest
rates based primarily on spreads above certain reference rates such as
LIBOR and U.S. T-Bill Rates. The remaining notes were fixed rate notes
which mature in 1996 and 1997 and bear interest rates ranging from 5.20%
to 5.82%.
(3) During March 1994, the Company redeemed, at a 1.5% premium, $100 million
of 8% Notes due 1999.
(4) The Company has made certain guarantees with respect to obligations and
debt of one discontinued operation sold during 1991, Highline Financial
Services, Inc. As a result of the guarantees, liabilities in the amount
of $13 million are included in the Company's balance sheet at March
31, 1994, under the caption "Liabilities of business transferred."
Because the Company has full recourse to the underlying assets assoc-
iated with the guarantees, $13 million of assets remain on the Company's
March 31, 1994 balance sheet, under the caption "Net assets of
discontinued operations." These liabilities and assets will decrease
proportionately with the collection of the underlying receivables.
(5) Pursuant to a Support Agreement between the Company and Xerox
Corporation (Xerox), Xerox has agreed to retain ownership of 100 percent
of the voting capital stock of the Company and to make periodic payments
to the extent necessary to ensure that the Company's annual pre-tax
earnings available for fixed charges equal at least 1.25 times the
Company's fixed charges.
(5)
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Continuing Operations
Contracts receivable income represents income earned under an agreement
with Xerox by which the Company purchases long-term accounts receivable
associated with Xerox' sold equipment. Earned income from contracts
receivable for the first quarter of 1994 was $93 million versus $102 million
in the corresponding period in 1993, a decrease of $9 million. The decrease
in earned income is primarily attributable to lower interest earned on Xerox'
contracts receivable resulting from declining interest rates.
First quarter interest expense decreased to $52 million in 1994 from
$56 million in the same period in 1993. The decrease of $4 million resulted
from lower interest rates partially offset by increased borrowings required to
fund the Company's additional investment in contracts receivable. The Company
intends to continue to match its contracts receivable and indebtedness to
maintain the relationship between interest income and interest expense.
Operating and administrative expenses were $4 million for the first
quarter, of 1994 and 1993. These expenses primarily represent the costs
associated with the administration of contracts receivable purchased from
Xerox.
The effective income tax rate for continuing operations for the
first quarter of 1994 was 40.5 percent, consistent with the first quarter of
1993.
Discontinued Operations
Since their discontinuance in 1990, the Company made substantial
progress in disengaging from the real estate and third-party financing
businesses. For the three years ended December 31, 1993, the Company
received net cash proceeds of $2,089 million from the sale of dis-
continued business units, from asset securitizations, sales, and run-
off collection activities. The amounts received were consistent with the
Company's estimates in the disposal plan and were primarily used to reduce the
Company's short-term indebtedness. At March 31, 1994, the Company remains
contingently liable for approximately $103 million of receivables under
recourse provisions associated with the securitization transactions.
During the first quarter of 1994, the Company reduced its net assets of
discontinued operations by approximately $20 million, primarily through
contractual maturities. The related net proceeds were largely used to repay
short-term indebtedness.
Since approximately $119 million of the remaining assets represent
passive lease receivables, many with long-duration contractual maturities and
unique tax attributes, the Company expects that the wind-down of the portfolio
will be slower during 1994 and in future years, compared with 1993 and prior
years. The Company believes that the liquidation of the remaining assets will
not result in a net loss.
(6)
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XEROX CREDIT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(Continued)
CAPITAL RESOURCES AND LIQUIDITY
The Company's principal sources of funds are cash from the collection
of Xerox contracts receivable and borrowings.
At March 31, 1994 the Company and Xerox have joint access to three
revolving credit agreements totaling $3 billion with various banks, which
credit agreements expire from 1995 to 1998. The interest on amounts borrowed
under these facilities would be at rates based, at the borrower's option, on
spreads above certain reference rates such as LIBOR and Federal funds rates.
Overall, cash of $62 million was used in investing activities during
the first quarter of 1994, compared with $105 million during the same
period in 1993. The decrease in cash used in investing activities is
principally the result of increased collections of investments in Xerox'
contracts receivable.
Cash provided by financing activities was $50 million in the first
quarter of 1994 compared to $71 million during the same period in 1993
This change is largely due to the payment of $20 million of dividends in 1994.
The Company believes that cash provided by operations, cash available
under its commercial paper program supported by its credit facilities, and its
readily available access to the capital markets are more than sufficient for
its funding needs.
Borrowing associated with the financing of customer purchases of Xerox
equipment is expected to continue to increase throughout 1994. This growth
will be partially offset by proceeds from third-party financing and leasing
asset sales. The timing, principal amount and form of new short- and long-
term funding will be determined based upon the Company's financing needs and
prevailing debt market conditions.
The Company intends to continue to match its contracts receivable and
indebtedness to maintain the relationship between investment income and
interest expense. To assist in managing its interest rate exposure, the
Company has entered into a number of interest rate swap agreements. In
general, the Company's objective is to hedge its variable-rate debt by paying
fixed rates under the swap agreements while receiving variable-rate
payments in return. Additionally, the Company has entered into interest rate
swap agreements which effectively convert variable-rate debt into variable-
rate debt that is indexed to commercial paper rates.
As of March 31, 1994, the Company's debt-to-equity ratio was 6.65 to 1.
The Company manages it's operations over time using a debt-to-equity guideline
of 6.5 to 1.
(7)
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XEROX CREDIT CORPORATION
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 3 (b) By-laws of Registrant, as amended through
September 1, 1992.
Exhibit 12 (a) Computation of the Company's Ratio of Earnings
to Fixed Charges.
(b) Computation of Xerox' Ratio of Earnings
to Fixed Charges.
(b) Reports on Form 8-K.
None.
(8)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
(REGISTRANT) XEROX CREDIT CORPORATION
BY
(NAME AND TITLE) Sandeep B. Thakore, Vice President and Treasurer
(Chief Financial Officer)
(DATE) May 2, 1994
(9)
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EXHIBIT 3(b)
As amended and restated
through September 1, 1992
XEROX CREDIT CORPORATION
BY-LAWS
ARTICLE I
OFFICES
Section 1. The office of the Corporation shall be located in the City
of Dover, State of Delaware (the "State").
Section 2. The Corporation may also have offices at such other places
both within and without the State as the board of directors may from
time to time determine or the business of the Corporation may require
ARTICLE II
ANNUAL MEETINGS OF STOCKHOLDERS
Section 1. All annual meetings of stockholders shall be held on such
date and time and place as shall be designated from time to time by the
board of directors, at which they shall elect by a plurality vote, a
board of directors, and transact such other business as may properly be
brought before the meeting.
Section 2. Written or printed notice of the annual meeting stating the
place, date and hour of the meeting shall be delivered not less than ten
nor more than sixty days before the date of the meeting, either
personally or by mail, by or at the direction of the president,
secretary or the officer or persons calling the meeting, to each
stockholder of record entitled to vote at such meeting.
ARTICLE III
SPECIAL MEETINGS OF STOCKHOLDERS
Section 1. Special meetings of stockholders may be held at such time
and place within or without the State as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
Section 2. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate
of incorporation, may be called by the chairman, president, a majority
of the board of directors or the holders of not less than ten percent of
all the shares entitled to vote at the meeting.
(10)
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Section 3. Written or printed notice of a special meeting stating the
place, date and hour of the meeting and the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor
more than sixty days before the date of the meeting, either personally
or by mail, by, or at the direction of, the chairman, president,
secretary or the officer or persons calling the meeting, to each
stockholder of record entitled to vote at such meeting. The notice
shall also indicate that it is being issued by, or at the direction of,
the person calling the meeting.
Section 4. Notice of a meeting need not be given to any stockholder who
signs a waiver of such notice before or after the meeting.
Section 5. The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the
name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
ARTICLE IV
QUORUM AND VOTING OF STOCK
Section 1. The holders of a majority of the shares of stock issued and
outstanding and entitled to vote, represented in person or by proxy,
shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute.
Section 2. If a quorum is present, the affirmative vote of a majority
of the shares of stock represented at the meeting shall be the act of
the stockholders, unless the vote of a greater or lesser number of
shares of stock is required by law.
Section 3. Each outstanding share of stock having voting power shall be
entitled to one vote on each matter submitted to a vote at a meeting of
stockholders. A stockholder may vote either in person or by proxy
executed in writing by the stockholder or by his duly authorized
attorney-in-fact. No proxy shall be valid after eleven months from its
date unless the proxy provides for a longer period.
Section 4. Whenever stockholders are required or permitted to take any
action by vote, such action may be taken without a meeting on written
consent, setting forth the action so taken, signed by the holders of all
outstanding shares entitled to vote thereon.
(11)
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ARTICLE V
DIRECTORS
Section 1. The number of directors shall be not less than one nor more
than twenty. The number of directors shall be determined from time to
time by a resolution of the stockholders or the board of directors. The
directors, other than the first board of directors, shall be elected at
the annual meeting of the stockholders, except as hereinafter provided,
and each director elected shall serve until the next succeeding annual
meeting and until his successor shall have been elected and qualified.
Each director shall be a United States citizen. The first board of
directors shall hold office until the first annual meeting of stockholders.
Section 2. Any or all of the directors may be removed, with or without
cause, at any time by the stockholders by the affirmative vote of the
majority of the votes cast by the holders of shares entitled to vote for
the election of directors.
Section 3. Directors shall not be elected by cumulative voting unless
otherwise required by law.
Section 4. Newly created directorships resulting from an increase in
the board of directors and all vacancies occurring in the board may be
filled by a majority of the directors then in office, though less than a
quorum, or by the stockholders at an annual meeting or at a special
meeting of stockholders called for that purpose. A director elected to
fill a vacancy shall be elected for the unexpired portion of the term of
his predecessor in office. A director elected to fill a newly created
directorship shall serve until the next succeeding annual meeting of
stockholders and until his successor shall have been elected and
qualified.
Section 5. The business affairs of the Corporation shall be managed by
its board of directors which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute
or by the certificate of incorporation or by these by-laws directed or
required to be exercised or done by the stockholders.
Section 6. The directors may keep the books of the Corporation, except
such as are required by law to be kept within the State, outside the
State, at such place or places as they may from time to time determine.
Section 7. The board of directors, by the affirmative vote of a
majority of the directors then in office, and irrespective of any
personal interest of any of its members, shall have authority to
establish reasonable compensation of all directors for services to the
Corporation as directors, officers or otherwise.
(12)
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ARTICLE VI
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Meetings of the board of directors, regular or special, may
be held either within or without the State.
Section 2. The first meeting of each newly elected board of directors
shall be held at such time and place as shall be fixed by the vote of
the stockholders at the annual meeting and no notice of such meeting
shall be necessary to the newly elected directors in order to legally
constitute the meeting, provided a quorum shall be present, or it may
convene at such place and time as shall be fixed by the consent in
writing of all the directors.
Section 3. Regular meetings of the board of directors may be held upon
such notice, or without notice, and at such time and at such place as
shall from time to time be determined by the board.
Section 4. Special meetings of the board of directors may be called by
the chairman, president, any two directors, the secretary or the holders
of all the outstanding shares of stock of the Corporation on three days'
notice to each director, delivered by mail, or on twenty-four hours'
notice given in person or by telephone or telegram.
Section 5. Notice of a meeting need not be given to any director who
submits a signed waiver of notice, before or after the meeting, or who
attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the board of
directors need be specified in the notice or waiver of notice of such
meeting.
Section 6. A majority of the directors shall constitute a quorum for
the transaction of business. The vote of a majority of the directors
present at any meeting at which a quorum is present shall be the act of
the board of directors, unless the vote of a greater number is required
by law. If a quorum shall not be present at any meeting of directors,
the directors present may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be
present.
Section 7. Members of the board of directors, or any committee
designated by the board of directors, may participate in a meeting of
the board of directors, or any committee, by means of conference
telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the
meeting.
(13)
<PAGE>
Section 8. Any action required or permitted to be taken at a meeting of
the directors or a committee thereof may be taken without a meeting if a
consent in writing to the adoption of a resolution authorizing the
action so taken, shall be signed by all of the directors entitled to
vote with respect to the subject matter thereof and the writing or
writings are filed with the minutes of proceedings of the board or
committee.
ARTICLE VII
EXECUTIVE COMMITTEE
Section 1. The board of directors, by resolution adopted by a majority
of the entire board, may designate, from among its members, an executive
committee and other committees, each consisting of two or more
directors, and each of which, to the extent provided in the resolution,
shall have all the authority of the board, except as otherwise required
by law. The executive committee shall have the power to declare
dividends. The board may designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. Vacancies in the membership of
a committee shall be filled by the board of directors at a regular or
special meeting of the board of directors. Each committee shall keep
regular minutes of its proceedings and report the same to the board when
required.
Section 2. In the absence or disqualification of a member of a
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the board of directors to act
at the meeting in the place of any such absent or disqualified member.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to
be given to any director or stockholder, it shall not be construed to
mean personal notice, but such notice may be given in writing, by mail,
addressed to such director or stockholder, at his address as it appears
on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall
be deposited in the United States mail. Notice to directors may also be
given in person or by telephone or telegram.
(14)
<PAGE>
Section 2. Whenever any notice of a meeting is required to be given
under the provisions of the statutes or under the provisions of the
certificate of incorporation or these by-laws, a waiver thereof in
writing signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. All waivers of notice shall be made a part
of the minutes of the meeting.
ARTICLE IX
OFFICERS
Section 1. The officers of the Corporation shall be a chairman,
president, a treasurer and a secretary, all of whom shall be elected by
the board of directors and who shall hold office until their successors
are elected and qualified. In addition, the board of directors may
elect one or more vice presidents, a controller and such assistant
secretaries, assistant treasurers and assistant controllers as it may
deem proper. The officers shall be elected at the first meeting of the
board of directors and thereafter at each succeeding annual meeting of
directors. All vacancies occurring among any of the officers shall be
filled by the board of directors. Any two or more offices may be held
by the same person, but no officer shall execute, acknowledge or verify
any instrument in more than one capacity if such instrument is required
by law or these by-laws to be executed, acknowledged or verified by two
or more officers.
Section 2. The board of directors may appoint such other officers and
agents as it may deem advisable, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board of directors.
Section 3. Any officer elected or appointed by the board of directors
may be removed at any time by the board of directors with or without
cause.
THE CHAIRMAN
Section 4. The Chairman shall preside at all meetings of the
stockholders and directors at which he is present. He shall also
perform such other duties as may be assigned to him from time to time by
the board of directors. The Chairman shall be a United States citizen.
(15)
<PAGE>
THE PRESIDENT
Section 5. The president shall be chief executive officer of the
Corporation, shall have general and active management of the business of
the Corporation and shall see that all orders and resolutions of the
board of directors are carried into effect. The president shall, in the
absence of the Chairman, preside at all meetings of stockholders and
directors at which he is present. The president shall be a United
States citizen.
Section 6. The president shall execute bonds, mortgages and other
contracts requiring a seal under the seal of the Corporation, except
where required or permitted by law to be otherwise signed and executed
and except where the signing and execution thereof shall be expressly
delegated by the board of directors to some other officer or agent of
the Corporation.
THE VICE PRESIDENT
Section 7. In the absence of the president or in the event of his
inability or refusal to act, the vice president (or in the event there
be more than one vice president, the vice presidents in the order
designated by the directors, or in the absence of any designation, then
in the order of their election) shall perform the duties of the
president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. The vice presidents
shall perform such other duties and have such other powers as the
president or the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 8. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the
proceedings of the meetings of the Corporation and of the board of
directors in a book to be kept for that purpose and shall perform like
duties for the standing committees when required. He shall give, or
cause to be given, notice of all meetings of the stockholders and
special meetings of the board of directors, and shall perform such other
duties as may be prescribed by the board of directors or president,
under whose supervision he shall be. He shall have custody of the
corporate seal of the Corporation and he, or an assistant secretary,
shall have authority to affix the same to any instrument requiring it
and when so affixed, it may be attested by his signature or by the
signature of such assistant secretary. The board of directors may give
general authority to any other officer to affix the seal of the
Corporation and to attest the affixing by his signature.
(16)
<PAGE>
Section 9. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors
(or if there be no such determination, then in the order of their
election) shall, in the absence of the secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers
of the secretary and shall perform such other duties as the president or
the board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURER
Section 10. The treasurer shall be the chief financial officer of the
Corporation unless the board of directors shall designate another person
as such; he shall have custody of the corporate funds and securities and
shall keep full and accurate accounts of receipts and disbursements in
books belonging to the Corporation and shall deposit all moneys and
other valuable effects in the name and to the credit of the Corporation
in such depositories as may be designated by the board of directors.
Section 11. The treasurer shall disburse the funds of the Corporation
as may be ordered by the board of directors, taking proper vouchers for
such disbursements, and shall render to the president and the board of
directors, at its regular meetings, or when the president or the board
of directors so requires, an account of all his transactions as
treasurer and of the financial condition of the Corporation.
Section 12. If required by the board of directors, the treasurer shall
give the Corporation a bond in such sum and with such surety or sureties
as shall be satisfactory to the board of directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.
Section 13. The assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the board of
directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the treasurer or in the event
of his inability or refusal to act, perform the duties and exercise the
powers of the treasurer and shall perform such other duties and have
such other powers as the president or the board of directors may from
time to time prescribe.
(17)
<PAGE>
THE CONTROLLER AND ASSISTANT CONTROLLER
Section 14. The controller shall keep the books of account for internal
and external reporting purposes. He shall perform all other duties
customarily incident to the office of controller and shall perform other
such duties and exercise such other powers as the chairman, president or
the board of directors may from time to time prescribe.
Section 15. The assistant controller, or if there shall be more than
one, the assistant controllers in the order determined by the board of
directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the controller or in the event
of his inability or refusal to act, perform the duties and exercise the
powers of the controller and shall perform such other duties and have
such other powers as the president or the board of directors may from
time to time prescribe.
ARTICLE X
CERTIFICATE FOR SHARES
Section 1. The shares of the Corporation shall be represented by
certificates signed by the chairman or the president or a vice president
and the secretary or an assistant secretary or the treasurer or an
assistant treasurer of the Corporation and may be sealed with the seal
of the Corporation or a facsimile thereof.
LOST CERTIFICATES
Section 2. The board of directors may direct a new certificate to be
issued in place of any certificate theretofore issued by the Corporation
alleged to have been lost, stolen or destroyed.
TRANSFERS OF SHARES
Section 3. Upon surrender to the Corporation or the transfer agent of
the Corporation of a certificate representing shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, a new certificate shall be issued to the person entitled
thereto, and the old certificate cancelled and the transaction recorded
upon the books of the Corporation.
REGISTERED STOCKHOLDERS
Section 4. The Corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and shall not be bound to
recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the
laws of the State.
(18)
<PAGE>
ARTICLE XI
GENERAL PROVISIONS
DIVIDENDS
Section 1. Subject to the provisions of the certificate of
incorporation relating thereto, if any, dividends may be declared by the
board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in shares of the capital stock or in the
Corporation's bonds or its property, including the shares or bonds of
other corporations subject to any provisions of law and of the
certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out
of any funds of the Corporation available for dividends such sum or sums
as the directors from time to time, in their absolute discretion, think
proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the directors shall think
conducive to the interest of the Corporation, and the directors may
modify or abolish any such reserve in the manner in which it was
created.
CHECKS
Section 3. All checks or demands for money and notes of the Corporation
shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the Corporation shall be fixed by
resolution of the board of directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon the name of
the Corporation, the year and jurisdiction of its organization and the
words "Corporate Seal." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or in any manner
reproduced.
ANNUAL STATEMENT
Section 6. The board of directors shall be required to present at each
annual meeting of stockholders a complete financial statement for the
Corporation only if requested by a stockholder.
(19)
<PAGE>
VOTING OF SHARES HELD IN THE NAME OF THE CORPORATION
Section 7. Each of the chairman, president, secretary or any assistant
secretary is authorized to vote, represent and exercise on behalf of the
Corporation all rights incident to any and all shares of any other
corporation(s) standing in the name of the Corporation. This authority
may be exercised either in person or by any other person authorized to
do so by proxy or power of attorney duly executed by the chairman,
president, secretary or any assistant secretary.
ASSIGNMENT AND TRANSFER OF STOCKS, BONDS, AND OTHER SECURITIES
Section 8. The chairman, president, the treasurer, the secretary, any
assistant secretary, any assistant treasurer, and each of them, shall
have power to assign, or to endorse for transfer, under the corporate
seal, and to deliver, any stock, bonds, subscription rights, or other
securities, or any beneficial interest therein, held or owned by the
Corporation.
ARTICLE XII
INDEMNIFICATION
Section 1. To the full extent authorized by law, the Corporation shall
indemnify any person, made or threatened to be made, a party in any
civil or criminal action or proceeding by reason of the fact that he,
his testator or intestate is or was a director or officer of the
Corporation or served any other corporation of any type or kind,
domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, in any capacity at the request of the
Corporation.
ARTICLE XIII
AMENDMENTS
Section 1. These by-laws may be amended, repealed or new by-laws
adopted (a) at any regular or special meeting of stockholders by the
affirmative vote of a majority of shares entitled to vote, or (b) by the
affirmative vote of a majority of the board of directors unless the
power of the board to amend, repeal or adopt by-laws must be conferred
in the certificate of incorporation and such power has not been so
conferred. In any event, the board may not take any action with respect
to the by-laws which is reserved by statute to the stockholders, nor
does any power of the board to amend, repeal or adopt by-laws divest,
limit, or diminish the power of the stockholders to amend, repeal or
adopt by-laws, including the power of stockholders to amend, repeal or
adopt a by-law contrary to any action with respect thereto previously
taken by the board.
(20)
<PAGE>
Exhibit 12 (a)
XEROX CREDIT CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Millions)
Three Months Ended
March 31, Year Ended December 31,
1994 1993 1993 1992 1991 1990 1989
Income before income taxes $ 37 42 $ 154 $ 158 $ 164 $ 182 $ 140
Fixed Charges:
Interest expense
Xerox debt 1 1 4 2 - 2 6
Other debt 51 55 205 210 200 205 197
Total fixed charges 52 56 209 212 200 207 203
Earnings available for
fixed charges $ 89 98 $ 363 $ 370 $ 364 $ 389 $ 343
Ratio of earnings to
fixed charges (1) 1.71 1.75 1.74 1.75 1.82 1.88 1.69
(1) The ratio of earnings to fixed charges has been computed based on the
Company's continuing operations by dividing total earnings available
for fixed charges by total fixed charges. Interest expense has been
assigned to discontinued operations principally on the basis of the
relative amount of gross assets of the discontinued operations.
Management believes that this allocation method is reasonable in
light of the amount of debt specifically allocated to discontinued
operations. The discontinued operations consist of the Company's real-
estate development and related financing operations and its third-party
financing and leasing businesses.
(21)
<PAGE>
Exhibit 12(b)
XEROX CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Millions)
Three Months ended
March 31, Year ended December 31,
1994 1993 1993(*) 1992(**) 1991(***) 1990 1989
Fixed charges:
Interest expense $ 181 $ 201 $ 755 $ 788 $ 758 $ 799 $ 654
Rental expense 48 52 201 208 206 191 164
Total fixed charges
before capitalized
interest 229 253 956 996 964 990 818
Capitalized interest 1 1 5 17 3 - -
Total fixed charges 230 $ 254 $ 961 $1,013 $ 967 $ 990 $ 818
Earnings available for fixed
charges:
Earnings (****) $ 256 $ 203 $ (227) $ 192 $ 939 $1,116 $1,136
Less undistributed
income in minority
owned companies (2) (1) (51) (52) (70) (60) (44)
Add fixed charges before
capitalized interest 229 253 956 996 964 990 818
Total earnings available
for fixed charges $ 483 $ 455 $ 678 $1,136 $1,833 $2,046 $1,910
Ratio of earnings to
fixed charges (1)(2) 2.10 1.79 0.71 1.12 1.90 2.07 2.33
(1) The ratio of earnings to fixed charges has been computed based on
Xerox' continuing operations by dividing total earnings available for
fixed charges, excluding capitalized interest, by total fixed charges.
Fixed charges consist of interest, including capitalized interest, and
one-third of rent expense as representative of the interest portion of
rentals. Interest expense has been assigned to discontinued operations
principally on the basis of the relative amount of gross assets of the
discontinued operations. Xerox management believes that this allocation
method is reasonable in light of the debt specifically allocated to
discontinued operations. The discontinued operations consist of Xerox'
real-estate development and related financing operations and its third-
party financing and leasing businesses.
(22)
<PAGE>
Exhibit 12(b)
(Cont'd)
(2) Xerox' ratio of earnings to fixed charges includes the effect of
the Xerox' finance subsidiaries who primarily finance Xerox equipment.
Financing businesses, due to their nature, traditionally operate at
lower earnings to fixed charge ratio levels than do non-financial
companies.
(*) In 1993, the ratio of earnings to fixed charges includes the effect of
the $1,373 million before-tax ($813 million after-tax) charge incurred
in connection with the restructuring provision and litigation
settlement. Excluding this charge, the ratio was 2.13. 1993 Earnings
were inadequate to cover fixed charges. The coverage deficiency was
$238 million.
(**) In 1992, the ratio of earnings to fixed charges includes the effect of
the $936 million before-tax ($778 million after-tax) charge incurred in
connection with the decision to disengage from the Company's Insurance
and Other Financial Services businesses. Excluding this charge, the
ratio was 2.05.
(***) In 1991, the ratio of earnings to fixed charges includes the effect of
the $175 million before-tax ($101 million after-tax) charge incurred in
connection with the Document Processing work-force reduction announced
in December 1991. Excluding this charge, the ratio was 2.08.
(****) Income before income taxes and income in minority owned companies.
(23)
