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» Xerox Q2 2010 Earnings Call Transcript
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» Xerox Corporation Q4 2009 Earnings Call Transcript
Larry retires at the top of his game after helping us create a financially strong and growing global enterprise with a sustainable and successful future. In building this solid foundation, he's paved the way for his successor. For that, we are grateful and we are fortunate.Next month, Larry hands the CFO role to Luca Maestri. Luca brings to Xerox two decades of international experience and a successful track record of leading large finance operations. Through his most recent position of CFO of Nokia Siemens Network and his 20 years in financial and operational leadership roles with General Motors, Luca's experience extends across several geographies and sales channels, and his expertise reflects the balance between disciplined financial management and business expansion. They are skills that complement the strength of our leadership team and the experience our company can benefit from in this transformative time. So while Larry will stay with us as Vice Chairman through April 1, and he knows I'll be counting on his counsel during that time, this is his last official earnings release. Luca is here with us today to observe, but he doesn't officially join the company until February 16. And while the CFO is changing, certain things always remain the same. First and foremost, delivering value for our shareholders through consistent revenue growth, disciplined cost controls and strong operating cash. We'd adjust that in Q4. So let's move on to our results. You'll hear from Larry in a bit to cover our financials, and then Larry and I will both take your questions. We'll get started on Slide 3. We closed the year strong with steady revenue growth and excellent cash generation, reflecting the strength of our business model and the benefits of our expanded technology and service offerings. For this quarter, we're still reporting not only GAAP earnings but also adjusted EPS. We're also reporting on a pro forma basis, which assumes that ACS was in our 2009 results.
Our fourth quarter pro forma revenue was up 2% or 3% in constant currency. We delivered Q4 adjusted EPS of $0.29, on track with our guidance and bringing us to $0.94 for the full year. On a GAAP basis, earnings were $0.12 per share. This includes restructuring and intangibles. We took a restructuring charge of $273 million in the quarter, a bit more than we initially planned. And as we shared with you last quarter, the restructuring gives us more flexibility in our business so we can continue improving operating margins while maintaining investments to drive growth. So where there was restructuring opportunity in Q4, we pursued it.Cash from operations was $1.3 billion, contributing to a very strong $2.7 billion in full year operating cash and free cash flow of $2.2 billion. With that, we also reduced debt by $1.9 billion from the time of the ACS acquisitions last February. Cost and expense management continues to be an operational strength of ours, leading to a Q4 operating margin of 10.4%, a year-over-year improvement of one point. So a good quarter and a solid way to end the year. And let's turn to Slide 4. As you see here, our revenue remains almost equally split between Technology and Services. This gives us a steady mix of annuity that comes from both segments. It's always worth repeating that in Technology, we generate recurring revenue through service and supplies, and multiyear outsourcing contracts are the source of strong annuity from our Services business. Total revenue of nearly $6 billion was up 42%. On a pro forma basis, it was up 3% in constant currency. Annuity revenue on a pro forma basis was up 3%. Equipment sales were up 6%, a growth rate that is more in line with normalized levels considering that the economy began slowly improving in the fourth quarter of last year. Read the rest of this transcript for free on seekingalpha.com