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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:
XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Xerox Corporation
P.O. Box 1600
Stamford, Connecticut 06904-1600
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the person who administer the plan have duly caused this actual report to
be signed on its behalf by the undersigned who thereunto duly authorized.
XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN
Patricia M. Nazemetz
Plan Administrator
Stamford, Connecticut
Dated June 28, 1999
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Financial Statements and Schedule
December 31, 1998 and 1997
and November 30, 1997
(With Independent Auditors' Report Thereon)
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
With Fund Information
December 31, 1998
(In thousands)
Fund Information
Small Balanced Fund
International Company
Stock U.S. Stock Stock Fifty/ More
Fund Fund Fund Fifty Bonds
Assets:
Investment in
Master Trust $ 175,891 404,740 189,184 43,879 19,615
Participant notes
Receivable - - - - -
Employer
Contributions
receivable 2,402 7,629 3,095 871 376
Total assets 178,293 412,369 192,279 44,750 19,991
Due from (to)
other funds (149) (343) (160) (37) (17)
Net assets available
for plan
benefits $ 178,144 412,026 192,119 44,713 19,974
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
1,102,063 18,803 692,898 590,564 18,706 - 3,256,343
- - - - - 80,030 80,030
13,575 193 3,179 10,190 353 - 41,863
1,115,638 18,996 696,077 600,754 19,059 80,030 3,378,236
(935) (16) (588) (501) (16) 2,762 -
1,114,703 18,980 695,489 600,253 19,043 82,792 3,378,236
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
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 $ 165,404 245,872 201,086 937,212
Participant
notes receivable - - - -
Employer
Contributions
Receivable 5,212 11,919 7,494 23,598
Total assets 170,616 257,791 208,580 960,810
Liabilities:
Accrued expenses
and other
liabilities 302 184 263 891
Due from (to)
other funds (5,850) 769 (2,027) (135)
Due from (to)
other plans - 7 6 77
Net assets available
for plan benefits $ 164,464 258,383 206,296 959,861
The accompanying notes are an integral part of the financial statements.
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
635,612 311,118 - 2,496,304
- - 66,182 66,182
6,748 13,249 - 68,220
642,360 324,367 66,182 2,630,706
486 18 - 2,144
975 6,268 - -
37 290 - 417
642,886 330,907 66,182 2,628,979
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
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 $ 2,402 7,629 3,095 871 376
Employees' -
Voluntary 11,839 21,938 15,336 141 67
Rollovers from
external plans 1,310 3,985 1,419 183 119
Rollovers from
internal plans 5,297 13,781 7,133 2,659 750
Total contributions 20,848 47,333 26,983 3,854 1,312
Net income (loss) from
Master Trust
investments, net of
administrative
expenses 24,155 82,037 (9,065) 2,841 1,201
Interest income on
participant
notes receivable - - - - -
Total 45,003 129,370 17,918 6,695 2,513
Benefit payments (6,940) (14,249) (6,787) (428) (1,232)
Transfers
among funds (24,617) 38,371 (25,537) 38,446 18,693
Transfer
between plans 234 151 229 - -
Net increase
(decrease) in
net assets available
for plan benefits 13,680 153,643 (14,177) 44,713 19,974
Net assets available
for plan benefits
Beginning of year 164,464 258,383 206,296 - -
End of year $ 178,144 412,026 192,119 44,713 19,974
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
13,575 193 3,179 10,190 353 - 41,863
40,013 64 20,323 23,493 55 - 133,269
7,473 508 14,785 2,944 119 - 32,845
83,404 551 65,748 5,559 255 - 185,137
144,465 1,316 104,035 42,186 782 - 393,114
161,361 229 43,553 209,986 1,239 - 517,537
- - - - - 6,180 6,180
305,826 1,545 147,588 252,172 2,021 6,180 916,831
(57,189) (527) (68,257) (16,824) (336) - (172,769)
(95,701) 17,962 (28,692) 33,339 17,358 10,378 -
1,906 - 1,964 659 - 52 5,195
154,842 18,980 52,603 269,346 19,043 16,610 749,257
959,861 - 642,886 330,907 - 66,182 2,628,979
1,114,703 18,980 695,489 600,253 19,043 82,792 3,378,236
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
With Fund Information
For the one month period ending December 31, 1997
(In thousands)
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Contributions:
Employees' -
voluntary $ 630 1,080 826 2,053
Employer 5,215 11,920 7,493 23,645
Total
Contributions 5,845 13,000 8,319 25,698
Net income from
Master Trust
investments, net of
administrative
expenses 3,493 4,313 (1,621) 10,592
Interest income on
Participant
notes receivable - - - -
Total 9,338 17,313 6,698 36,290
Benefit payments (377) (413) (359) (2,104)
Transfers among funds(5,699) 975 (1,854) 298
Transfer between
plans - 7 6 77
Net increase
(decrease)
in net assets
available
for plan benefits 3,262 17,882 4,491 34,561
Net assets available
for plan
benefits:
Beginning of
Period 161,202 240,501 201,805 925,300
End of year $ 164,464 258,383 206,296 959,861
The accompanying notes are an integral part of the financial statements.
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
1,118 1,138 - 6,845
6,773 13,174 - 68,220
7,891 14,312 - 75,065
4,094 (15,103) - 5,768
- - 455 455
11,985 (791) 455 81,288
(2,783) (812) - (6,848)
1,235 6,232 (1,187) -
37 290 - 417
10,474 4,919 (732) 74,857
632,412 325,988 66,914 2,554,122
642,886 330,907 66,182 2,628,979
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits With Fund
Information
Year ended November 30, 1997
(In thousands)
Fund Information
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
Contributions:
Employees' -
voluntary $ 11,906 16,296 13,833 37,300
Employer 6,373 8,695 8,756 20,481
Total
Contributions 18,279 24,991 22,589 57,781
Net income from
Master Trust
investments, net of
administrative
expenses 11,854 48,066 31,281 145,979
Interest income on
Participant
notes receivable - - - -
Total 30,133 73,057 53,870 203,760
Benefit payments (7,290) (6,860) (6,287) (39,825)
Transfers among funds 1,685 33,874 21,032 5,225
Transfer from XDS
Savings Plan - - - 523
Net increase
(decrease)
in net assets
available
for plan benefits 24,528 100,071 68,615 169,683
Net assets available
for plan
benefits:
Beginning of year 136,674 140,430 133,190 755,617
End of year $ 161,202 240,501 201,805 925,300
The accompanying notes are an integral part of the financial statements.
Xerox
Income Stock Employee
Fund Fund Loan Fund Total
22,981 15,571 - 117,887
7,750 8,333 - 60,388
30,731 23,904 - 178,275
44,781 112,250 - 394,211
- - 5,240 5,240
75,512 136,154 5,240 577,726
(48,794) (10,358) - (119,414)
(79,929) 17,817 296 -
- - - 523
(53,211) 143,613 5,536 458,835
685,623 182,375 61,378 2,095,287
632,412 325,988 66,914 2,554,122
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
and November 30, 1997
Description of Plan
The following description of the Xerox Corporation Profit Sharing and Savings
Plan (Plan) provides only general information. Participants should refer to the
summary plan description and the Plan document for a more complete description
of the Plan's provisions.
(a) General
The Plan is a defined contribution plan covering substantially all full and
part-time U.S. employees of Xerox Corporation (sponsor) and participating
subsidiaries, except those covered by a collective bargaining agreement unless
that agreement calls for participation in the Plan. Employees are automatically
eligible to participate in the 401(K) savings portion of the Plan upon date of
hire.
(b) Plan Amendments
In December 1997, the Company changed the Xerox Corporation Profit Sharing
and Savings Plan (the Plan) year end from November 30 to December 31. As
a result, the accompanying financial statements include a statement of net
assets available for benefits at December 31, 1998 and December 31, 1997
as well as a statement of changes in net assets available for benefits for
the year ended December 31, 1998, the one month period ended December 31,
1997 and the year ended November 30, 1997.
Effective January 1, 1998, the Plan Administrator amended the provisions
of the Plan pertaining to the valuation date used to value assets of the Plan.
This amendment requires the Plan Trustee to value the assets held in each
separate fund as of the close of business each day. The Trustee shall appraise
them at their market or estimated fair value each day and reflect increases or
decreases in the value of each separate fund. Previously, assets of the Plan
were valued once a month.
Effective January 1, 1998, each employee shall immediately become a
participant in the 401(K) savings portion of the Plan for the purpose of
determining eligibility.
Effective January 1, 1998, employees of Chrystal Software Inc., dpiX,
Inc., In Concert, Inc., In Xight Software, Inc., Liveworks, Inc., PD Reader,
Inc. and XESystems, Inc. will no longer participate in the Plan's profit sharing
program. These employees are eligible to continue participating in the savings
portion of the Plan.
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(1) Description of Plan, Continued
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 payouts 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
contribution disclosure in note 1(e) for further information.
(c) 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 and 1997.
(d) 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.
(e) Xerox Profit Sharing Contribution
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-end.
In 1999 and forward, the maximum profit sharing payout will be 15%. In any
given year, the payout bears a one-to-one relationship to earnings per share
(EPS) growth up to 15%. However, if EPS growth is below 5%, there is no
payment.
Prior to 1998, an employee may have received the contribution in cash or Xerox
Corporation common stock, 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 optional profit sharing contributions.
Under the new profit sharing, a payout will have three components. They are as
follows: (i) 50% of the payout will come in the form of cash which you can
defer to the savings plan, (ii) another 25% of the payout is automatically
deferred to the Xerox stock fund, and (iii) the last 25% of the payment is
provided in the form of stock options which is not a component of this Plan.
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(1) Description of Plan, Continued
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 $128,734 and 5% in stock options which are not a component
of this plan. Participants elected to invest approximately $41,863 into the
Plan at December 31, 1998 (dollars in thousands).
For the calendar year ended December 31, 1997, the sponsor's ROA was 18.0% which
resulted in an optional profit sharing contribution for the one month period
ending December 31, 1997 for all eligible active employees at December 31, 1997
equal to 10% of pay or $245,981. Participants elected to invest $68,220 into
the Plan which has been accrued as an employer contributions receivable in the
Plan's financial statements for the one month period ended December 31, 1997
(dollars in thousands).
(f) 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 the following four new investment funds to the Plan: 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.
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.
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(1) Description of Plan, Continued
Balanced Fund - More Stocks - Usually invests approximately 70% in stocks, most
of the rest in bonds, 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 in 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
funds.
(g) 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 and 1997, market value on loans approximates fair value.
(2) Federal Income Taxes
The Plan obtained its latest determination letter from the Internal Revenue
Service (IRS) on September 18, 1995, covering Plan amendments through January
31, 1995, indicating that the Plan, as designed, was in compliance with the
applicable requirements of the Internal Revenue Code. The Plan administrator
and Plan's internal tax counsel believe that the Plan, as currently designed and
operated, is in compliance with the applicable requirements of the Internal
Revenue Code. Accordingly, they believe that the Plan was qualified and the
related trust was tax-exempt as of the financial statement date.
As long as the Plan continues to be qualified under present Federal income tax
laws and regulations, participants will not be taxed on company contributions or
on investment earnings on such contributions at the time such contributions and
investment earnings are received by the trustee under the Plan, but may be
subject to tax thereon at such time as they receive distributions under the
Plan.
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(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:
The Profit Sharing Plan of Xerox Corporation and The Xerographic Division, Union
of Needletrades, Industrial and Textile Employees, A.F.L. - C.I.O. - C.L.C.;
Xerox Corporation Retirement Income Guarantee Plan; and
Retirement Income Guarantee Plan of Xerox Corporation and The Xerographic
Division, Union of Needletrades, Industrial and Textile Employees, A.F.L. -
C.I.O. - C.L.C.
The Master Trust has nine investment pools - the International Stock Pool, U.S.
Stock Pool, Small Company Stock Pool, Other Equity Pool, Income Fund, Other
Fixed Pool, Bond Pool, 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 one month period ended December 31, 1997, the accrued administrative
expenses and due from (to) other funds activity were 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 Balanced Fund - More Stocks, based on the net asset fund
balances at the end of each month.
In October 1998, there was a 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 the new investment
funds as discussed in note 1.
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The following financial information is presented for the Master Trust and each
of the Master Trust investment pools:
Statement of Net Assets of the Master Trust as of December 31, 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 - - - - -
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
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The allocation of Master Trust net assets by investment pool as of December 31,
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
- - - - - -
- - 937,149 - - 937,149
- - - 643,759 - 643,759
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 19,209 937,149 634,759 19,796 8,858,947
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
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
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Statement of Net Assets of the Master Trust as of 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 - 137,737
- 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
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The allocation of Master Trust net assets by investment pool as of December 31,
1997 is as follows(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
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Net assets in the Master Trust for all participating plans as of December 31,
1997 are as follows(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
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Statement of Changes in Net Assets of the Master Trust 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
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The allocation of net income (loss) from Master Trust investments, net of
administrative expenses, by investment pool and fund for 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
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Net income (loss) from Master Trust Investments, net of administrative expenses,
for all participating 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
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Statement of Changes in Net Assets of the Master Trust for the one month period
ending December 31, 1997 is as follows (in thousands):
Small
International Company
Stock U.S. Stock Stock All Other
Pool Pool Pool Pool
Additions:
Transfers in $ 940 1,521 1,192 3,440
Investment
earnings:
Interest 203 751 794 6,127
Dividends 883 2,116 306 2,541
Net appreciation
(depreciation) 21,900 43,019 (16,962) 5,499
Margin variation
on futures
contracts (96) (815) 8,628 2,300
Other 54 20 32 15
Total investment
earnings (loss) 22,944 45,091 (7,202) 16,482
Total additions
(deductions) 23,884 46,612 (6,010) 19,922
Deductions:
Administrative
expenses 311 194 393 6,383
Transfers out 702 840 752 22,945
Total deductions 1,013 1,034 1,145 29,328
Transfers between
funds/pools (11,590) 2,440 (1,491) (3,680)
Net assets:
Beginning
of period 1,015,696 2,450,378 981,504 2,047,930
End of period $ 1,026,977 2,498,396 972,858 2,034,844
Xerox
Income Stock
Fund Fund Total
2,392 1,836 11,321
5,154 48 13,077
338 1,461 7,645
637 (17,891) 36,202
51 - 10,068
1 - 122
6,181 (16,382) 67,114
8,573 (14,546) 78,435
576 89 7,946
10,394 2,162 37,795
10,970 2,251 45,741
(622) 14,943 -
929,920 347,859 7,773,287
926,901 346,005 7,805,981
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The allocation of net income (loss) from Master Trust investments, net of
administrative expenses, by investment pool and fund for the one month period
ended December 31, 1997 is as follows (in thousands):
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
International Stock
Pool $ 3,837 - - 18,796
U.S. Stock
Pool - 4,649 - 40,248
Small Company
Stock Pool - - (1,656) (5,939)
All Other Pool - - - 10,099
Income Fund - - - -
Xerox Stock Fund - - - -
Total $ 3,837 4,649 (1,656) 63,204
Xerox
Income Stock
Fund Fund Total
- - 22,633
- - 44,897
- - (7,595)
- - 10,099
5,605 - 5,605
- (16,471) (16,471)
5,605 (16,471) 59,168
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Net income (loss) from Master Trust Investments, net of administrative expenses,
for all participating plans for the one month period ended December 31, 1997 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 $ 3,493 4,313 (1,621) 10,592
The Profit Sharing Plan of
Xerox Corporation and
The Xerographic Division,
Union of Needletrades,
Industrial and Textile
Employees, A.F.L. -
C.I.O. -C.L.C. 344 336 (35) 696
Xerox Corporation Retirement
Income Guarantee Plan 46,595
Retirement Income Guarantee
Plan of Xerox Corporation
and The Xerographic
Division, Union of
Needletrades, Industrial and
Textile Employees, A.F.L
C.I.O. - C.L.C. - 5,321
Total $ 3,837 4,649 (1,656) 63,204
Xerox
Income Stock
Fund Fund Total
4,094 (15,103) 5,768
422 (1,368) 395
952 - 47,547
137 - 5,458
5,605 (16,471) 59,168
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Statement of Changes in Net Assets of the Master Trust for the year ended
November 30, 1997 is as follows (in thousands):
Small
International Company
Stock U.S. Stock Stock All Other
Pool Pool Pool Pool
Additions:
Transfers in $ 22,306 29,657 27,059 79,565
Investment
earnings:
Interest 1,758 5,278 7,298 94,879
Dividends 18,590 30,314 4,364 32,315
Net appreciation
(depreciation) 63,334 513,193 165,121 135,330
Margin variation
on futures
contracts (1,756) 278 (7,436) (7,294)
Other 1,126 610 490 9,218
Total investment
earnings 83,052 549,673 169,837 264,448
Total additions
(deductions) 105,358 579,330 196,896 344,013
Deductions:
Administrative
expenses 7,367 4,589 5,154 14,439
Transfers out 9,831 9,772 8,830 260,746
Total deductions 17,198 14,361 13,984 275,185
Transfers between
funds/pools (24,459) 32,896 23,767 21,795
Net assets:
Beginning
of year 951,995 1,852,513 774,825 1,957,307
End of year $ 1,015,696 2,450,378 981,504 2,047,930
Xerox
Income Stock
Fund Fund Total
48,096 30,942 237,625
62,253 59 172,525
35 5,197 90,815
(88) 116,768 993,658
(384) - (16,592)
4,481 26 15,951
67,297 122,050 1,256,357
115,393 152,992 1,493,982
2,207 263 34,019
123,105 16,993 429,277
125,312 17,256 463,296
(71,942) 17,943 -
1,011,781 194,180 6,742,601
929,920 347,859 7,773,287
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The allocation of net income (loss) from Master Trust investments, net of
administrative expenses, by investment pool and fund for the year ended November
30, 1997 is as follows (in thousands):
Small
International Company
Stock U.S. Stock Stock Balanced
Fund Fund Fund Fund
International Stock
Pool $ 12,519 - - 63,166
U.S. Stock
Pool - 50,619 - 494,465
Small Company
Stock Pool - - 33,159 131,524
All Other Pool - - - 250,009
Income Fund - - - -
Xerox Stock Fund - - - -
Total $ 12,519 50,619 33,159 939,164
Xerox
Income Stock
Fund Fund Total
- - 75,685
- - 545,084
- - 164,683
- - 250,009
65,090 - 65,090
- 121,787 121,787
65,090 121,787 1,222,338
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Net income (loss) from Master Trust Investments, net of administrative expenses,
for all participating plans for the year ended November 30, 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* $ 11,837 48,110 31,337 146,126
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. 682 2,509 1,822 9,948
Xerox Corporation Retirement
Income Guarantee Plan - - - 702,387
Retirement Income Guarantee
Plan of Xerox Corporation
and The Xerographic
Division, Union of
Needletrades, Industrial and
Textile Employees, A.F.L
C.I.O. - C.L.C. - - - 80,703
Total $ 12,519 50,619 33,159 939,164
*The above allocation of investment results, net of administrative expenses is
at the Master Trust level. This allocation differs from the amount reported in
the statement of changes in net assets available for plan benefits due to the
impact of investment manager expenses accrued at the Plan level.
Xerox
Income Stock
Fund Fund Total
44,788 112,237 394,435
5,469 9,550 29,980
13,026 - 715,413
1,807 - 82,510
65,090 121,787 1,222,338
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
Master Trust investments are managed by selected
investment managers under the direction of the Treasurer of Xerox Corporation.
The Finance Committee of the Xerox Corporation Board of Directors is responsible
for establishing investment guidelines, reviewing the investment decisions of
the Treasurer and reviewing the investment results of the Master Trust. The
Finance Committee of the Xerox Corporation Board of Directors consists, at
present, of six members of the Xerox Corporation Board of Directors, none of
whom are officers of Xerox Corporation.
Marketable securities are valued at the last reported sales price on the last
business day of the year. Quotations are obtained from national securities
exchanges or, in instances where securities are not listed on any of the
exchanges, quotations are obtained from brokerage firms.
Non-readily marketable investments, which include private placements, are
carried at fair value, based upon the cost of the investments, developments
concerning the portfolio investments of the private placements, and other
factors as the managing general partners of these investments may deem relevant.
The valuations do not necessarily represent amounts which might ultimately be
realized from the investments.
The value of the investment contracts with insurance companies and banks is at
contract value, which approximates fair value. In connection with the
investment contracts, all of which are fully benefit-responsive, the following
information is presented (dollars in thousands):
(i) The average investment yields for the year ended December 31, 1998 and
one month period ended December 31, 1997 are 7.1% and 6.8%, respectively.
The crediting interest rates at December 31, 1998 and 1997 ranged from
4.4% to 9.3%.
The fair value, as determined by discounting estimated future cash flows for
traditional GIC's and the market value of the underlying investments for
synthetic GIC's, at December 31, 1998 and 1997 was approximately $63,780 and
$274,344, respectively. Contract values were $62,861 and $278,817 at December
31, 1998 and 1997, respectively.
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
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.
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
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
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
The net appreciation (depreciation) of investments for the one month period
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 $ (634) - - 1,122
Xerox common
stock - - - -
Other equity
investments 22,534 43,019 (16,962) 3,062
Investments at
estimated
fair value:
Interest in real
estate trusts - - - 433
Other investments - - - 882
Total $ 21,900 43,019 (16,962) 5,499
Income Xerox
Fund Stock Fund Total
637 - 1,125
- (17,891) (17,891)
- - 51,653
- - 433
- - 882
637 (17,891) 36,202
The net appreciation (depreciation) of investments for the year ended November
30, 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 $ (1,168) - - 18,771
Xerox common
stock - - - -
Other equity
investments 64,502 513,193 165,121 99,221
Investments at
estimated
fair value:
Interest in real
estate trusts - - - (9,127)
Other investments - - - 26,465
Total $ 63,334 513,193 165,121 135,330
Income Xerox
Fund Stock Fund Total
(88) - 17,515
- 116,768 116,768
- - 842,037
- - (9,127)
- - 26,465
(88) 116,768 993,658
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Master Trust, Continued
There are no investments in the Plan that represent 5% or more of Master Trust
net assets.
Other investments consist primarily of private placement limited partnerships.
(4) 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. Previously, unit values were calculated monthly.
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(4) Unit Values, Continued
The total number of units and net asset value per unit outstanding for 1998 were
as follows:
International Stock Fund U.S. Stock Fund
Units Unit Units Unit
Outstanding Value Outstanding Value
January 31 16,116,070 $10.382375 24,927,813 $10.099668
February 28 16,155,792 10.962610 26,232,810 10.877374
March 31 16,679,415 11.657176 28,059,104 11.420459
April 30 16,796,063 11.716992 28,844,680 11.548355
May 31 16,627,909 11.786185 29,220,733 11.334877
June 30 16,497,180 11.661331 29,309,443 11.805511
July 31 16,492,369 11.814280 30,280,521 11.677048
August 31 16,156,859 10.275574 30,190,909 9.990193
September 30 15,729,290 9.900287 29,838,172 10.570626
October 31 15,238,692 10.684862 29,893,895 11.456733
November 30 15,122,772 11.218222 30,776,092 12.135353
December 31 15,125,620 11.628680 31,209,881 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 1,720,187 10.535520 1,178,284 10.327282
November 30 3,334,498 10.945811 1,497,155 10.669218
December 31 3,891,846 11.274600 1,802,953 10.879377
Enhanced Bond Fund Income Fund
Units Unit Units Unit
Outstanding Value Outstanding Value
January 31 - $ - 64,121,883 $10.076927
February 28 - - 62,649,277 10.105522
March 31 - - 62,458,899 10.156731
April 30 - - 62,377,011 10.206823
May 31 - - 62,519,936 10.267817
June 30 - - 62,826,117 10.316044
July 31 - - 63,887,349 10.368480
August 31 - - 68,828,185 10.468176
September 30 - - 69,763,832 10.602034
October 31 1,037,793 9.905175 69,180,107 10.619355
November 30 1,454,692 10.125494 65,166,504 10.615745
December 31 1,855,511 10.133596 64,934,403 10.670738
Small Company Stock Fund
Units Unit
Outstanding Value
20,119,053 $9.884830
20,151,199 10.740566
20,938,929 11.292184
20,962,619 11.426224
20,894,638 10.750264
20,720,446 10.808698
20,694,033 9.932038
20,075,266 7.840207
19,659,985 8.180712
19,481,591 8.618658
19,713,158 9.071812
19,526,268 9.688692
Balanced Fund - More Stocks
Units Unit
Outstanding Value
94,379,349 $10.145639
94,852,747 10.636311
97,344,074 11.026386
97,230,413 11.119027
96,228,721 11.030174
95,700,232 11.213429
97,957,111 11.121109
96,465,703 10.007453
94,833,385 10.286159
93,857,000 10.815761
94,089,441 11.298588
93,704,235 11.761080
Xerox Stock Fund
Units Unit
Outstanding Value
32,104,726 $10.874319
32,684,937 11.964169
33,664,767 14.360530
34,429,180 15.300170
35,401,942 13.872963
36,295,330 13.772022
36,516,103 14.295476
36,511,299 11.928028
38,258,904 11.567694
37,572,370 13.194813
37,211,639 14.620633
36,737,142 16.075393
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements,
Continued
(4) Unit Values, Continued
The total number of units and net asset value per unit outstanding from December
31, 1996 through December 31, 1997 were as follows:
International Stock Fund U.S. Stock Fund
Units Unit Units Unit
Outstanding Value Outstanding Value
1996
December 31 90,563,566 $ 1.532938 84,859,388 $ 1.633287
1997
January 31 91,150,844 1.534505 85,893,585 1.730341
February 28 94,025,972 1.553327 88,497,656 1.742577
March 31 99,136,218 1.567248 96,133,238 1.660099
April 30 100,422,099 1.579270 98,707,608 1.753541
May 31 101,629,939 1.649894 99,339,876 1.868288
June 30 102,618,758 1.720781 101,625,093 1.946789
July 31 103,491,932 1.772593 104,087,145 2.110584
August 31 104,231,978 1.663151 106,537,307 2.012423
September 30 104,171,429 1.782407 109,075,779 2.135018
October 31 102,885,514 1.639303 110,452,534 2.065826
November 30 102,005,002 1.633471 111,278,329 2.145322
December 31 95,447,037 1.668488 112,845,473 2.184082
Balanced Fund Income Fund
Units Unit Units Unit
Outstanding Value Outstanding Value
1996
December 31 53,633,066 $ 14.093684 105,026,066 $ 6.524472
1997
January 31 53,698,376 14.470430 105,186,425 6.558457
February 28 54,061,787 14.506426 103,755,361 6.586982
March 31 55,945,191 14.137580 102,939,902 6.603786
April 30 55,641,654 14.496758 101,687,690 6.648515
May 31 55,621,901 15.218038 101,452,051 6.687458
June 30 55,927,288 15.768765 99,702,645 6.730846
July 31 55,994,477 16.591127 98,453,840 6.791030
August 31 55,805,277 16.203908 96,060,680 6.809071
September 30 55,844,090 16.994571 94,493,225 6.857353
October 31 55,744,736 16.580802 93,522,930 6.905255
November 30 55,470,643 16.747769 92,199,704 6.927294
December 31 55,266,051 16.941002 91,236,509 6.972417
Small Company Stock Fund
Units Unit
Outstanding Value
79,486,842 $ 1.712923
80,473,310 1.744382
83,858,153 1.692002
91,041,937 1.613780
93,217,757 1.609185
92,842,933 1.787189
92,963,998 1.875320
93,028,246 2.001355
93,690,113 2.028639
94,826,934 2.176980
97,598,620 2.054848
99,308,863 2.030057
98,744,501 2.013296
Xerox Stock Fund
Units Unit
Outstanding Value
27,049,137 7.308812
27,006,027 8.145360
26,402,443 8.694382
27,057,319 7.956917
27,160,307 8.603987
27,192,122 9.481475
27,506,326 11.082058
27,643,047 11.577523
28,488,208 10.631119
28,923,301 11.894320
29,041,937 11.202250
29,195,255 10.964281
30,389,848 10.452765
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(6) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for plan benefits and
benefits paid to participants as reported in the financial statements to the
Form 5500 at December 31, 1998 and 1997 and November 30, 1997:
December 31,
1998
Net assets available for
plan benefits as reported
in the Plan financial
statements $ 3,378,236
Benefit claims payable
reported on line 31g of
Form 5500 ---
Net assets available for
plan benefits as reported
in the Plan Form 5500 $ 3,378,236
December 31,
1998
Benefits paid to
participants as reported
in the Plan financial
statements $ 172,847
Add: Amounts allocated
to withdrawing participants
at December 31, 1998 ---
Less: Amounts allocated
to withdrawing participants
at December 31, 1997 ---
Benefits paid to participants
as reported in the Form 5500 $ 172,847
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date. There were no benefits allocated
from the Plan for participants at December 31, 1998.
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
(6) Reconciliation of Financial Statements to Form 5500,
Continued
(In thousands)
December 31, November 30,
1997 1997
Net assets available for plan benefits as
reported in the Plan financial statements $ 2,628,979 2,554,123
Benefit claims payable reported on line 31g
of Form 5500 - (5,023)
Net assets available for plan benefits as
reported in the Plan Form 5500 $ 2,628,979 2,549,100
December 31, November 30,
1997 1997
Benefits paid to participants as reported in
the Plan financial statements $ 6,848 119,413
Add: Amounts allocated to withdrawing
participants at November 30 - 5,023
Less: Amounts allocated to withdrawing
participants at November 30, 1997 and
1996, respectively (5,023) (2,077)
Benefits paid to participants as reported in
the Form 5500 $ 1,825 122,359
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
November 30 but not yet paid as of that date.
(7) Stock Split
In 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
XEROX CORPORATION
PROFIT SHARING AND SAVINGS PLAN
Line 27a - Schedule of Assets Held for Investment Purposes
(In thousands)
December 31, 1998
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) $2,605,574 $3,256,343
*Investment in Participant Loans to Plan participants,
Notes Receivable maturity dates through
5/31/11, interest rates
from 8.0% to 11.5% -- 80,030
per annum
* Party-in-interest
(1) See note 3
Independent Auditors' Report
The Plan Administrator and Participants
Xerox Corporation Profit Sharing and Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of the Xerox Corporation Profit Sharing and Savings Plan (Plan) as of
December 31, 1998 and 1997, and the related statements of changes in net assets
available for plan benefits for the year ended December 31, 1998, the one month
period ended December 31, 1997 and the year ended November 30, 1997. 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 year ended December 31, 1998, the one month period ended
December 31, 1997 and the year ended November 30, 1997 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 at December 31, 1998 is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. 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 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 aspects 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
Accountants' Consent The Board of Directors Xerox Corporation We consent to incorporation by reference in the Registration Statements (No. 2- 86274 and No. 333-22059) on Form S-8 of Xerox Corporation of our report dated May 21, 1999, relating to the statements of net assets available for plan benefits of the Xerox Corporation Profit Sharing and Savings Plan as of December 31, 1998 and 1997, and the related statements of changes in net assets available for plan benefits for the year ended December 31, 1998, the one month period ended December 31, 1997 and for the year ended November 30, 1997 and the related schedule, which report appears in the December 31, 1998 Annual Report on Form 11-K of the Xerox Corporation Profit Sharing and Savings Plan. Rochester, New York June 29, 1999