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: November 30, 1994 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 1 SIGNATURES THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the persons who administer the plan have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Patricia M. Nazemetz Plan Administrator Stamford, Connecticut Dated May 26, 1995 2 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Financial Statements and Schedule November 30, 1994 and 1993 (With Independent Auditors' Report Thereon) 3 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Statement of Net Assets Available for Plan Benefits with Fund Information November 30, 1994
4Fund Information _________________________________________________________________________________________________________________ Small International Company Xerox Segregated Employee Stock U.S Stock Stock Balanced Income Stock Assets Loan Fund Fund Fund Fund Fund Fund Fund Fund Total (see note 4) Assets: Investment in employees' loans $ - - - - - - - 54,862,287 54,862,287 Investment in Master Trust 66,071,371 37,033,463 38,123,594 482,117,043 718,541,144 81,345,830 18,971,990 - 1,442,204,435 Total assets 66,071,371 37,033,463 38,123,594 482,117,043 718,541,144 81,345,830 18,971,990 54,862,287 1,497,066,722 Liabilities: Accrued expenses and other liabilities 71,626 35,147 44,911 649,589 497,558 54,250 - - 1,353,081 Due from (to) other funds (555,669) 73,020 809,692 (4,649,728) 748,137 2,432,972 - 1,141,576 - Net assets available for plan benefits $65,444,076 37,071,336 38,888,375 476,817,726 718,791,723 83,724,552 18,971,990 56,003,863 1,495,713,641 The accompanying notes are an integral part of the financial statements. XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Statement of Net Assets Available for Plan Benefits with Fund Information November 30, 1993
5Fund Information _________________________________________________________________________________________________________________ Small International Company Xerox Segregated Employee Stock U.S Stock Stock Balanced Income Stock Assets Loan Fund Fund Fund Fund Fund Fund Fund Fund Total (see note 4) Assets: Investment in employees' loans $ - - - - - - - 51,993,706 51,993,706 Investment in Master Trust 20,798,765 17,984,805 14,224,843 480,999,823 727,165,214 58,172,843 44,944,784 - 1,364,291,077 Other - - - - 45,622 - - - 45,622 Total assets 20,798,765 17,984,805 14,224,843 480,999,823 727,210,836 58,172,843 44,944,784 51,993,706 1,416,330,405 Liabilities: Accrued expenses and other liabilities 9,594 6,572 7,315 950,324 - 1,714 - - 975,519 Due from (to) other funds 9,293,674 7,234,043 6,585,777 (3,529,681) (19,050,712) (1,978,863) - 1,445,762 - Net assets available for plan benefits $30,082,845 25,212,276 20,803,305 476,519,818 708,160,124 56,192,266 44,944,784 53,439,468 1,415,354,886 The accompanying notes are an integral part of the financial statements. XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Statement of Changes in Net Assets Available for Plan Benefits with Fund Information Year ended November 30, 1994
6Fund Information _________________________________________________________________________________________________________________ Small International Company Xerox Segregated Employee Stock U.S Stock Stock Balanced Income Stock Assets Loan Fund Fund Fund Fund Fund Fund Fund Fund Total (see note 4) Contributions: Employees' - - voluntary $ 8,973,711 6,559,876 5,581,555 46,447,521 46,155,430 6,703,338 - - 120,421,431 Net income (loss) from Master Trust investments, net of administrative expenses 928,278 (305,396) 1,559,894 9,710,699 46,884,189 11,869,615 - - 70,647,279 Interest income on employees' loans - - - - - - - 3,985,617 3,985,617 9,901,989 6,254,480 7,141,449 56,158,220 93,039,619 18,572,953 - 3,985,617 195,054,327 Benefit payments (3,202,169) (1,386,953) (1,414,772) (34,596,847) (69,558,291) (4,536,540) - - (114,695,572) Transfers among funds 28,661,411 6,991,533 12,358,393 (21,263,465) (12,849,729) 13,495,873 (25,972,794) (1,421,222) - Net increase (decrease) in net assets available for plan benefits 35,361,231 11,859,060 18,085,070 297,908 10,631,599 27,532,286 (25,972,794) 2,564,395 80,358,755 Net assets available for plan benefits: Beginning of year 30,082,845 25,212,276 20,803,305 476,519,818 708,160,124 56,192,266 44,944,784 53,439,468 1,415,354,886 End of year $65,444,076 37,071,336 38,888,375 476,817,726 718,791,723 83,724,552 18,971,990 56,003,863 1,495,713,641 The accompanying notes are an integral part of the financial statements. XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Statement of Changes in Net Assets Available for Plan Benefits with Fund Information Year ended November 30, 1993
7Fund Information _________________________________________________________________________________________________________________ Small International Company Xerox Segregated Employee Stock U.S Stock Stock Balanced Income Stock Assets Loan Fund Fund Fund Fund Fund Fund Fund Fund Total (see note 4) Contributions: Employees' - - voluntary $ 817,052 840,616 615,082 43,969,274 53,731,579 6,703,572 - - 106,677,175 Net income (loss) from Master Trust investments, net of administrative expenses (871,282) (295,959) (189,517) 56,681,511 53,283,721 4,330,034 - - 112,938,508 Interest income on employees' loans - - - - - - - 3,935,568 3,935,568 (54,230) 544,657 425,565 100,650,785 107,015,300 11,033,606 - 3,935,568 223,551,251 Benefit payments (1,625) (5,430) (2,014) (12,753,487) (32,557,064) (2,805,803) - - (48,125,423) Transfers among funds 30,138,700 24,673,049 20,379,754 (7,995,564) (63,090,814) (8,182,101) - 4,076,976 - Transfer to The Profit Sharing Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U, A.F.L.-C.I.O. - - - 2,026 - (2,766) - - (740) Transfer to Xerox Retirement Income Guarantee Plan and Retirement Income Guarantee Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U, A.F.L.-C.I.O. segregated assets funds - - - - - - (2,791,354) - (2,791,354) Net increase (decrease) in net assets available for plan benefits 30,082,845 25,212,276 20,803,305 79,903,760 11,367,422 42,936 (2,791,354) 8,012,544 172,633,734 Net assets available for plan benefits: Beginning of year - - - 396,616,058 696,792,702 56,149,330 47,736,138 45,426,924 1,242,721,152 End of year $30,082,845 25,212,276 20,803,305 476,519,818 708,160,124 56,192,266 44,944,784 53,439,468 1,415,354,886 The accompanying notes are an integral part of the financial statements. XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements November 30, 1994 and 1993 (1) 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 Plan document for a more complete description of the Plan's provisions. 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 Plan after completing one year of service. Payment 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 by an annuity payable from a legal reserve life insurance company. Benefits payable to participants, from net assets available for plan benefits, at November 30, 1994 and 1993 were $4,975,553 and $2,883,120, respectively. 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 any combination of before-tax and after-tax payroll deductions. (The maximum before-tax contribution for the 1994 calendar year is $9,240.) Employees are immediately vested in their savings contributions. Xerox Optional Profit Sharing Contributions Eligible employees may receive an optional profit sharing contribution from the Sponsor. The contribution ranges from zero to 10% of pay and is based upon the return on assets (ROA) of the Xerox Document Processing industry segment as defined in the Plan document. ROA is determined as of the Sponsor's calendar year-end, which differs from the November 30 Plan year-end. An employee may receive the contribution in cash or Xerox Corporation common stock, or may elect to invest all or part of the contribution on a tax deferred basis, subject to limits imposed by the Internal Revenue Code, through the Plan's investment funds. Employees are immediately vested in optional profit sharing contributions. 8 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (1) Description of Plan (continued) For the calendar year ended December 31, 1994, the Sponsor's ROA was 16% which will result in an optional profit sharing contribution for the plan year ending November 30, 1995 for all eligible active employees at December 31, 1994 equal to 9.1% of pay or $50,842,848. For the Sponsor's year ended December 31, 1993, ROA targets (as defined in the Plan document) requiring the sponsor to make optional profit sharing contributions were not achieved. Accordingly, no optional profit sharing contributions were made in the Plan year ended November 30, 1994. Investment Funds As further described in note 3, the investment funds are part of the Xerox Trust Agreement to Fund Retirement Plans (Master Trust). Employees can direct their plan accounts to one or more of the following six investment funds: International Stock Fund -- Invests primarily in stocks of companies based outside of the United States. As further described in note 3, the Plan, through its Master Trust, also enters into forward-foreign exchange contracts as a hedge against the adverse impacts of foreign currency fluctuations of foreign investments. 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 normally those representing the smallest 20% of the broad stock market. Balanced Fund -- Invests in a variety of stocks, bonds, convertible securities and money market instruments, emphasizing the common stock of many different companies. Other investments also include real estate and private placements. Income Fund -- Invests in investment contracts with insurance companies and banks, government and corporate bonds, mortgage-backed securities and money market instruments. Xerox Stock Fund -- Invests exclusively in Xerox Corporation common stock and some short-term cash equivalents. 9 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (1) Description of Plan (continued) Segregated Assets Fund This fund was established on April 1, 1991 and represents participant investments in certain guaranteed investment contracts which are segregated and frozen. See note 4 to the financial statements for further discussion. Employee Loan Fund Participants are permitted to borrow from their profit sharing savings accounts subject to certain limitations. The loans are payable over terms up to 14.5 years and bear interest at the quarterly Citibank commercial prime rate in effect at the time of loan issuance plus 1%. Principal and interest payments on the loans are redeposited into the participants' accounts based on their current investment allocation elections. Loans are issued at market value. At November 30, 1994, market value on loans approximates fair value. (2) Federal Income Taxes The Plan obtained its latest determination letter from the Internal Revenue Service on January 22, 1990, covering Plan amendments through August 12, 1988, indicating that the Plan, as designed, was in compliance with the applicable requirements of the Internal Revenue Code. Since receiving the determination letter, the Plan has been fully amended to conform qualification requirements enacted by the Tax Reform Act of 1986 and Omnibus Budget Reconciliation Act of 1993. The Plan, as amended, has been recently submitted to the IRS for a new determination letter. The Plan administrator and the 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. 10 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (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 November 30, 1994: The Profit Sharing Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U., A.F.L.-C.I.O.; Xerox Corporation Retirement Income Guarantee Plan; Retirement Income Guarantee Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U., A.F.L.-C.I.O.; and XDS Investment Plan. Effective September 30, 1993, the Master Trust (and the Plan) was amended to permit the General Fund to be split into four investment pools: International Stock Pool, U.S. Stock Pool, Small Company Stock Pool and All Other Pool. The Balanced Fund (formerly the General Fund) participates in each of the four investment pools. The Master Trust currently has six investment accounts -- the International Stock Pool, U.S. Stock Pool, Small Company Stock Pool, All Other Pool, Income Fund, and the Xerox Stock Fund. Participants direct their accounts into investment funds, as described in note 1, which are formed from the aforementioned investment accounts. Each of the plans has an ownership interest in one or more of these investment accounts and shares in the investment results of the account(s) in accordance with that interest as determined by participant fund elections. In addition, there is a Segregated Assets Fund which is discussed in note 4. The following financial information is presented for the Master Trust and each of the Master Trust investment accounts: 11 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (3) Master Trust (continued) Statement of Net Assets of the Master Trust as of November 30, 1994:
12Small International Company Xerox Segregated Stock U.S Stock Stock All Other Income Stock Assets Pool Pool Pool Pool Fund Fund Fund Total Assets (see note 4) Receivables: Accrued dividends $ 739,927 902,683 384,005 962,589 - 647,774 - 3,636,978 Accrued interest 31,634 467,698 246,978 11,408,094 6,385,420 6,679 - 18,546,503 Due from brokers 50,810,131 15,106,943 32,916,635 62,027,865 - - - 160,861,574 Total receivables 51,581,692 16,477,324 33,547,618 74,398,548 6,385,420 654,453 - 183,045,055 Investments at fair value: At market value: Short-term investments 5,796,344 42,326,949 56,522,639 235,949,816 50,879,699 973,372 - 392,448,819 Fixed income investments 753,429 20,082,445 - 718,869,624 168,599,692 - - 908,305,190 Equity securities: Xerox common stock - - - - - 84,858,427 - 84,858,427 Other 672,108,462 847,486,121 581,854,946 513,658,546 - - - 2,615,108,075 Investment contracts with insurance companies and banks - - - - 825,795,446 - 27,686,390 853,481,836 At estimated fair value: Real estate trust interests - - - 165,630,637 - - - 165,630,637 Other investments - - - 91,304,131 - - - 91,304,131 Total investments 678,658,235 909,895,515 638,377,585 1,725,412,754 1,045,274,837 85,831,799 27,686,390 5,111,137,115 Total assets 730,239,927 926,372,839 671,925,203 1,799,811,302 1,051,660,257 86,486,252 27,686,390 5,294,182,170 Due to brokers 13,937,155 15,992,660 11,442,462 48,988,924 - - - 90,361,201 Net assets $716,302,772 910,380,179 660,482,741 1,750,822,378 1,051,660,257 86,486,252 27,686,390 5,203,820,969 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (3) Master Trust (continued) The allocation of Master Trust investments by investment pool and fund as of November 30, 1994 is as follows:
13Small International Company Xerox Segregated Stock U.S Stock Stock Balanced Income Stock Assets Fund Fund Fund Fund Fund Fund Fund Total (see note 4) International Stock Pool $ 69,638,452 - - 646,664,320 - - - 716,302,772 U.S. Stock Pool - 38,368,076 - 872,012,103 - - - 910,380,179 Small Company Stock Pool - - 39,472,492 621,010,249 - - - 660,482,741 All Other Pool - - - 1,750,822,378 - - - 1,750,822,378 Income Fund - - - - 1,051,660,257 - - 1,051,660,257 Xerox Stock Fund - - - - - 86,486,252 - 86,486,252 Segregated Assets Fund - - - - - - 27,686,390 27,686,390 Total $ 69,638,452 38,368,076 39,472,492 3,890,509,050 1,051,660,257 86,486,252 27,686,390 5,203,820,969 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (3) Master Trust (continued) Investments in the Master Trust for all participating plans as of November 30, 1994 are as follows:
14Small International Company Xerox Segregated Stock U.S Stock Stock Balanced Income Stock Assets Fund Fund Fund Fund Fund Fund Fund Total (see note 4) Xerox Corporation Profit Sharing and Savings Plan $ 66,071,371 37,033,463 38,123,594 482,117,043 718,541,144 81,345,830 18,971,990 1,442,204,435 The Profit Sharing Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U., A.F.L.-C.I.O. 3,567,081 1,334,613 1,348,898 30,593,699 90,862,095 5,140,422 1,874,205 134,721,013 Xerox Corporation Retirement Income Guarantee Plan - - - 3,000,228,425 209,683,564 - 5,989,417 3,215,901,406 Retirement Income Guarantee Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U., A.F.L.-C.I.O. - - - 377,207,391 32,573,454 - 850,778 410,631,623 XDS Investment Plan - - - 362,492 - - - 362,492 Total $ 69,638,452 38,368,076 39,472,492 3,890,509,050 1,051,660,257 86,486,252 27,686,390 5,203,820,969 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (3) Master Trust (continued) Statement of Net Assets of the Master Trust as of November 30, 1993:
15Small International Company Xerox Segregated Stock U.S Stock Stock All Other Income Stock Assets Pool Pool Pool Pool Fund Fund Fund Total Assets (see note 4) Cash $ 2,593,192 - 95,584 815,448 128,934 - - 3,633,158 Receivables: Accrued dividends 714,324 939,466 268,499 787,008 - 554,763 - 3,264,060 Accrued interest 26,842 243,097 14,548 9,726,271 6,198,319 3,527 - 16,212,604 Due from brokers 2,211,143 7,408,678 14,432,665 31,329,385 - - - 55,381,871 Total receivables 2,952,309 8,591,241 14,715,712 41,842,664 6,198,319 558,290 - 74,858,535 Investments at fair value: At market value: Short-term investments 6,488,514 1,235,327 3,216,896 140,137,734 14,223,772 5,265 9,849,886 175,157,394 Fixed income investments 442,629 13,522,108 - 686,691,430 - - - 700,656,167 Equity securities: Xerox common stock - - - - - 60,931,469 - 60,931,469 Other 598,832,889 922,726,187 533,641,645 793,381,072 - - - 2,848,581,793 Investment contracts with insurance companies and banks - - - - 1,018,550,495 - 55,739,277 1,074,289,772 At estimated fair value: Real estate trust interests - - - 180,197,637 - - - 180,197,637 Other investments - - - 82,772,373 - - - 82,772,373 Total investments 605,764,032 937,483,622 536,858,541 1,883,180,246 1,032,774,267 60,936,734 65,589,163 5,122,586,605 Total assets 611,309,533 946,074,863 551,669,837 1,925,838,358 1,039,101,520 61,495,024 65,589,163 5,201,078,298 Due to brokers 3,641,328 5,113,927 5,110,783 18,224,486 - 44,810 - 32,135,334 Net assets $607,668,205 940,960,936 546,559,054 1,907,613,872 1,039,101,520 61,450,214 65,589,163 5,168,942,964 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (3) Master Trust (continued) The allocation of Master Trust investments by investment pool and fund as of November 30, 1993 is as follows:
16Small International Company Xerox Segregated Stock U.S Stock Stock Balanced Income Stock Assets Fund Fund Fund Fund Fund Fund Fund Total (see note 4) International Stock Pool $ 21,280,470 - - 586,387,735 - - - 607,668,205 U.S. Stock Pool - 18,523,209 - 922,437,727 - - - 940,960,936 Small Company Stock Pool - - 14,478,144 532,080,910 - - - 546,559,054 All Other Pool - - - 1,907,613,872 - - - 1,907,613,872 Income Fund - - - - 1,039,101,520 - - 1,039,101,520 Xerox Stock Fund - - - - - 61,450,214 - 61,450,214 Segregated Assets Fund - - - - - - 65,589,163 65,589,163 Total $ 21,280,470 18,523,209 14,478,144 3,948,520,244 1,039,101,520 61,450,214 65,589,163 5,168,942,964 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (3) Master Trust (continued) Investments in the Master Trust for all participating plans as of November 30, 1993 are as follows:
17Small International Company Xerox Segregated Stock U.S Stock Stock Balanced Income Stock Assets Fund Fund Fund Fund Fund Fund Fund Total (see note 4) Xerox Corporation Profit Sharing and Savings Plan $20,798,765 17,984,805 14,224,843 480,999,823 727,165,214 58,172,843 44,944,784 1,364,291,077 The Profit Sharing Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U., A.F.L.-C.I.O. 481,705 538,404 253,301 27,969,266 86,314,196 3,277,371 4,439,982 123,274,225 Xerox Corporation Retirement Income Guarantee Plan - - - 3,047,753,638 193,419,666 - 14,188,905 3,255,362,209 Retirement Income Guarantee Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U., A.F.L.-C.I.O. - - - 391,394,955 32,202,444 - 2,015,492 425,612,891 XDS Investment Plan - - - 402,562 - - - 402,562 Total $21,280,470 18,523,209 14,478,144 3,948,520,244 1,039,101,520 61,450,214 65,589,163 5,168,942,964 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (3) Master Trust (continued) Statement of Changes in Net Assets of the Master Trust for the year ended November 30, 1994:
18Small International Company Xerox Segregated Stock U.S Stock Stock All Other Income Stock Assets Pool Pool Pool Pool Fund Fund Fund Total (see note 4) Additions: Transfers in $11,103,229 7,858,350 6,695,143 126,932,929 71,994,664 8,904,234 - 233,488,549 Investment earnings: Interest 9,403 1,787,764 867,612 66,936,509 72,848,224 46,636 - 142,496,148 Dividends 9,041,094 36,298,979 11,232,148 27,199,478 - 2,269,628 - 86,041,327 Net App(Dep) 39,332,070 (33,194,137) 29,005,444 (80,651,679) (2,811,275) 10,312,638 - (38,006,939) Other (490,147) 31,654 47,866 82,536 256,087 - - (72,004) Total 47,892,420 4,924,260 41,153,070 13,566,844 70,293,036 12,628,902 - 190,458,532 Total Additions 58,995,649 12,782,610 47,848,213 140,499,773 142,287,700 21,533,136 - 423,947,081 Deductions: Administrative Exp 3,757,485 3,619,773 3,684,933 15,744,129 1,613,751 40,968 - 28,461,039 Transfer out 4,648,473 2,178,149 2,153,359 215,151,406 129,516,572 6,960,078 - 360,608,037 Total deductions 8,405,958 5,797,922 5,838,292 230,895,535 131,130,323 7,001,046 - 389,069,076 Transfers between funds/pools 58,044,876 (37,565,445) 71,913,766 (66,395,732) 1,401,360 10,503,948 (37,902,773) - Net assets: Beginning of year 607,668,205 940,960,936 546,559,054 1,907,613,872 1,039,101,520 61,450,214 65,589,163 5,168,942,964 End of year $716,302,772 910,380,179 660,482,741 1,750,822,378 1,051,660,257 86,486,252 27,686,390 5,203,820,969 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (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, 1994:
19Small International Company Xerox Stock U.S Stock Stock Balanced Income Stock Fund Fund Fund Fund Fund Fund Total International Stock Pool $1,008,818 - - 43,126,117 - - 44,134,935 U.S. Stock Pool - (292,005) - 1,596,492 - - 1,304,487 Small Company Stock Pool - - 1,630,870 35,837,267 - - 37,468,137 All Other Pool - - - (2,177,285) - - (2,177,285) Income Fund - - - - 68,679,285 - 68,679,285 Xerox Stock Fund - - - - - 12,587,934 12,587,934 Total $1,008,818 (292,005) 1,630,870 78,382,591 68,679,285 12,587,934 161,997,493 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (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, 1994:
20Small International Company Xerox Stock U.S Stock Stock Balanced Income Stock Fund Fund Fund Fund Fund Fund Total Xerox Corporation Profit Sharing and Savings Plan $990,310 (276,821) 1,597,490 9,409,964 47,427,369 11,922,151 71,070,463 The Profit Sharing Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U., A.F.L.-C.I.O. 18,508 (15,184) 33,380 522,951 5,764,599 665,783 6,990,037 Xerox Corporation Retirement Income Guarantee Plan - - - 60,518,330 13,354,463 - 73,872,793 Retirement Income Guarantee Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U., A.F.L.-C.I.O. - - - 7,930,526 2,132,854 - 10,063,380 XDS Investment Plan - - - 820 - - 820 Master Trust investment income, net of administrative expenses $1,008,818 (292,005) 1,630,870 78,382,591 68,679,285 12,587,934 161,997,493 * The above allocation of investment results, net of administrative expenses, is at the Master Trust level. This allocation differs from the amounts reported in the statement of changes in net assets available for plan benefits due to the impact of investment manager expenses accrued at the Plan level. XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (3) Master Trust (continued) Statement of Changes in Net Assets of the Master Trust for the year ended November 30, 1994:
21Small International Company Xerox Segregated Stock U.S Stock Stock All Other General Income Stock Assets Pool Pool Pool Pool Fund Fund Fund Fund Total (see note 4) Additions: Transfers in $996,544 1,014,485 738,673 13,949,222 116,904,684 92,605,953 10,940,210 - 237,149,771 Investment earnings: Interest 43,316 188,274 24,999 9,750,852 39,557,055 76,048,560 26,136 - 125,639,192 Dividends 1,079,947 7,203,304 1,160,345 3,017,227 66,822,399 - 2,274,604 - 81,557,826 Net Appreciation (Depreciation)15,307,074 (13,414,175) (1,994,961) 930,172 353,884,402 - 2,314,022 - 357,026,534 Other (132,280) 50,162 1,326 (1,087,454) 16,335,538 94 691 - 15,168,077 Total 16,298,057 (5,972,435) (808,291) 12,610,797 476,599,394 76,048,654 4,615,453 - 579,391,629 Total Additions 17,294,601 (4,957,950) (69,618) 26,560,019 593,504,078 168,654,607 15,555,663 - 816,541,400 Deductions: Administrative Exp 10,247 - - 4,141,993 9,752,862 986,831 72,658 - 14,964,591 Transfer out 6,724 17,815 13,877 18,705,579 97,254,002 83,310,985 5,380,649 - 204,689,631 Total deductions 16,971 17,815 13,877 22,847,572 107,006,864 84,297,816 5,453,307 - 219,654,222 Transfers between funds/pools 590,390,575 945,936,701 546,642,549 1,903,901,425 (3,960,270,052) (20,846,390) (5,754,808) - - Transfers from the XES, Inc. Employee Retirement Plan - - - - 20,527,433 - - - 20,527,433 Net assets: Beginning of year - - - - 3,453,245,405 975,591,119 57,102,666 65,589,163 4,551,528,353 End of year 607,668,205 940,960,936 546,559,054 1,907,613,872 - 1,039,101,520 61,450,214 65,589,163 5,168,942,964 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (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, 1993:
22Small International Company Xerox Stock U.S Stock Stock Balanced Income Stock Fund Fund Fund Fund Fund Fund Total International Stock Pool $(881,145) - - 17,168,955 - - 16,287,810 U.S. Stock Pool - (297,983) - (5,674,452) - - (5,972,435) Small Company Stock Pool - - (185,362) (622,929) - - (808,291) All Other Pool - - - 8,468,804 - - 8,468,804 General Fund - - - 466,846,532 - - 466,846,532 Income Fund - - - - 75,061,823 - 75,061,823 Xerox Stock Fund - - - - - 4,542,795 4,542,795 Total $(881,145) (297,983) (185,362) 486,186,910 75,061,823 4,542,795 564,427,038 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (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, 1993:
23Small International Company Xerox Stock U.S Stock Stock Balanced Income Stock Fund Fund Fund Fund Fund Fund Total Xerox Corporation Profit Sharing and Savings Plan $(871,282) (295,959) (189,517) 56,681,511 53,283,721 4,330,034 112,938,508 The Profit Sharing Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U., A.F.L.-C.I.O. (9,863) (2,024) 4,155 3,442,203 5,942,630 212,761 9,589,862 Xerox Corporation Retirement Income Guarantee Plan - - - 377,822,758 13,617,520 - 391,440,278 Retirement Income Guarantee Plan of Xerox Corporation and The Xerographic Division, A.C.T.W.U., A.F.L.-C.I.O. - - - 48,190,847 2,217,952 - 50,408,799 XDS Investment Plan - - - 49,591 - - 49,591 Master Trust investment income, net of administrative expenses $(881,145) (297,983) (185,362) 486,186,910 75,061,823 4,542,795 564,427,038 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (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 five 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. Securities and trust funds that are not readily marketable are valued based on comparisons to yields of issues of similar quality and maturities. The value of the investment contracts with insurance companies and banks is at contract value. In connection with the fully benefit-responsive investment contracts, the following information is presented: (i) The average investment yields for the years ended November 30, 1994 and 1993 were 6.7% and 7.5% respectively. (ii) The crediting interest rates at November 30, 1994 and 1993 ranged from 4.2% to 10.2% and from 5.2% to 9.7%, respectively. (iii) The fair value, as determined by discounting future cash flows and the market value of underlying investments, at November 30, 1994 and 1993 was approximately $811,978,057 and $1,049,000,000 respectively. The Master Trust invests in real estate group trusts. These trusts provide pension and profit sharing plans with a medium for pooling their funds for investment in income producing real estate. The group trusts value real estate holdings at estimated market value based upon independent appraisals, and considering 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. Derivative financial instruments are used by the Master Trust's 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. 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 derivative 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. Including the foreign exchange forward contracts, less than 5% of the Master Trust's assets are invested in non-exchange traded derivatives at November 30, 1994. The use of derivative instruments is not believed to materially increase the credit or market risk of the Master Trust's investments. 24 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (3) Master Trust (continued) The net appreciation (depreciation) of investments for the year ended November 30, 1994 is as follows:
U.S. Small International Stock Company All Other Income Xerox Stock Pool Pool Stock Pool Pool Fund Stock Fund Total Investments at fair value: Short-term and fixed income investments $ (126,020) (776,284) - (72,906,554) (2,811,275) - (76,620,133) Xerox common stock - - - - - 10,312,638 10,312,638 Other equity investments 39,458,090 (32,417,853) 29,005,444 (11,170,424) - - 24,875,257 Investments at estimated fair value: Real estate trust interests - - - (3,774,706) - - (3,774,706) Other investments - - - 7,200,005 - - 7,200,005 Total $ 39,332,070 (33,194,137) 29,005,444 (80,651,679) (2,811,275) 10,312,638 (38,006,939) The net appreciation (depreciation) of investments for the year ended November 30, 1993 is as follows:
25U.S. Small International Stock Company All Other General Xerox Stock Pool Pool Stock Pool Pool Fund Stock Fund Total Investments at fair value: Short-term and fixed income investments $ 194,404 (4,352,570) - 269,111 41,255,331 - 37,366,276 Xerox common stock - - - - - 2,314,022 2,314,022 Other equity investments 15,112,670 (9,061,605) (1,994,961) 701,790 320,197,504 - 324,955,398 Investments at estimated fair value: Real estate trust interests - - - (46,941) (8,722,829) - (8,769,770) Other investments - - - 6,212 1,154,396 - 1,160,608 Total $ 15,307,074 (13,414,175) (1,994,961) 930,172 353,884,402 2,314,022 357,026,534 There are no investments in the Plan that represent 5% or more of Master Trust net assets. XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (4) Segregated Assets Fund - Investment Contracts with Executive Life Insurance Company On April 11, 1991, the California Department of Insurance (CDI) took over Executive Life Insurance Company (ELIC) citing a "serious danger of insolvency" and temporarily suspended all payments on Guaranteed Investment Contracts (GICs) issued by ELIC. Effective April 1, 1991, in order to treat all participants fairly, the affected assets were transferred into a Segregated Assets Fund which will not be available for loans, transfers, withdrawals or distributions until the situation has been resolved. Based on documents filed in the court by the California Commissioner of Insurance, Xerox estimates that a substantial amount of the ELIC investment in the Segregated Assets Fund balance should be recovered. The Xerox retirement and savings plans have received $37.9 million in payments related to the ELIC investments through November 30, 1994. Additional payments are payable through 1998. (5) Unit Values The interests of Plan participants in each of the funds is expressed in terms of units, representing undivided interests in the net assets of the fund. Unit value is calculated monthly by dividing the total value of net assets of each fund (reduced by employer contributions receivable not yet received by the Master Trust and by unaccrued benefit payments) by units outstanding at the valuation date. 26 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (5) Unit Values (continued) The total number of units and net asset value per unit outstanding at month-end during the year ended November 30, 1994 was as follows:
27International Fund U.S Stock Fund Small Co. Fund Balanced Fund Income Fund Xerox Stock Fund Units Unit Units Unit Units Unit Units Unit Units Unit Units Unit Outstanding Value Outstanding Value Outstanding Value Outstanding Value Outstanding Value Outstanding Value December 31: 29,650,170 $1.128051 25,640,192 $1.020155 20,997,238 $1.047018 51,675,323 $9.567722 133,143,140 $5.312541 15,999,351 $3.836510 January 31: 36,851,934 1.200937 28,424,934 1.056300 24,434,016 1.092702 52,170,707 9.919163 131,364,750 5.345800 15,844,882 4.206652 February 28: 42,667,207 1.151156 30,254,067 1.027632 26,883,671 1.089830 52,606,036 9.723347 130,204,457 5.377490 15,666,419 4.193499 March 31: 51,172,198 1.091995 31,253,596 0.981430 29,297,625 1.035358 52,818,282 9.349340 127,209,798 5.410319 15,380,055 4.131032 April 30: 57,343,692 1.119416 32,515,538 0.991031 32,198,094 1.044826 53,658,192 9.388670 127,867,116 5.443035 15,510,833 4.274473 May 31: 58,676,106 1.122803 33,336,553 1.006992 33,694,298 1.037543 53,616,863 9.438358 131,169,340 5.478523 15,507,304 4.377705 June 30: 59,287,381 1.083635 34,180,296 0.973525 34,564,353 1.006952 53,386,210 9.228455 130,688,663 5.506822 15,911,241 4.261137 July 31: 60,932,030 1.126868 35,829,007 1.001848 35,461,113 1.030408 53,467,999 9.449647 130,813,058 5.540161 16,577,238 4.454264 August 31: 60,431,068 1.161954 36,012,798 1.041306 35,182,859 1.089944 53,072,719 9.740418 130,607,925 5.572710 17,059,290 4.696045 September 30: 60,483,570 1.124887 36,357,693 1.019799 35,160,139 1.089271 52,616,452 9.608760 130,933,162 5.598163 17,819,718 4.681576 October 31: 60,411,609 1.141573 36,863,237 1.037421 35,238,115 1.101845 51,768,310 9.696911 129,298,227 5.629306 18,147,966 4.492321 November 30: 60,379,615 1.098006 37,212,480 0.994977 35,647,051 1.070708 51,220,254 9.450125 128,609,197 5.646585 18,825,472 4.336586 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements (5) Unit Values (continued) The Segregated Assets Fund had 56,486,401.727 units outstanding and a net asset value of $18,971,990 at November 30, 1994. The total number of units and net asset value per unit outstanding at month-end during the year ended November 30, 1993 was as follows:
29International Fund U.S Stock Fund Small Co. Fund Balanced Fund Income Fund Xerox Stock Fund Units Unit Units Unit Units Unit Units Unit Units Unit Units Unit utstanding Value Outstanding Value Outstanding Value Outstanding Value Outstanding Value Outstanding Value December 31: N/A N/A N/A N/A N/A N/A 47,251,405 $8.263373 139,590,837 $4.939860 16,576,889 $3.288506 January 31: N/A N/A N/A N/A N/A N/A 47,487,203 8.400025 140,293,607 4.970864 16,822,231 3.552823 February 28: N/A N/A N/A N/A N/A N/A 47,819,751 8.396903 140,454,157 5.000866 17,088,631 3.432812 March 31: N/A N/A N/A N/A N/A N/A 50,152,465 8.633104 143,071,498 5.033350 17,777,525 3.485547 April 30: N/A N/A N/A N/A N/A N/A 50,445,205 8.557225 143,863,885 5.062922 17,740,528 3.226614 May 31: N/A N/A N/A N/A N/A N/A 50,818,376 8.770408 144,132,072 5.095388 17,577,681 3.198325 June 30: N/A N/A N/A N/A N/A N/A 51,116,214 8.850279 144,426,920 5.124256 17,368,618 3.369427 July 31: N/A N/A N/A N/A N/A N/A 51,572,155 8.894992 144,677,454 5.159230 17,371,939 3.077099 August 31: N/A N/A N/A N/A N/A N/A 51,892,658 9.198010 144,188,690 5.191105 17,211,143 3.127929 September 30: 235,156 $1.000000 245,314 $1.000000 177,846 $1.000000 52,113,863 9.208018 144,381,979 5.220284 17,098,791 3.111230 October 31: 19,975,038 1.068233 17,687,342 1.014335 13,940,266 1.016238 51,552,754 9.403094 137,172,172 5.251874 16,284,875 3.371969 November 30: 29,344,927 1.023990 25,311,385 0.997592 20,763,969 1.002640 51,415,177 9.257618 133,666,560 5.281596 15,883,410 3.539666 The Segregated Assets Fund had 134,362,127 units outstanding and a net asset value of $44,944,784 at November 30, 1993. Schedule 1 XEROX CORPORATION PROFIT SHARING AND SAVINGS PLAN Item 27a - Schedule of Assets Held for Investment Purposes November 30, 1994
30Description of investment including Identity of issuer, borrower, maturity date, rate of interest, Historical Cost Current Value lessor, or similar party collateral, par or maturity value Investment in Master Trust (1) $1,330,674,637 $1,442,204,435 Investment in Employees' Loans Loans to Plan participants, maturity dates through 5/31/08, interest rates from 7.5% to 11.5% per annum. - 54,862,287 (1) See note 3. INDEPENDENT AUDITORS' REPORT The Plan Administrator and Participants of 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 November 30, 1994 and 1993, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of November 30, 1994 and 1993, and the changes in those net assets available for Plan benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes is presented for 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. 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 respects in relation to the basic financial statements taken as a whole. KPMG PEAT MARWICK LLP Rochester, New York May 15, 1995 32 EXHIBIT INDEX Electronic Submission Exhibit Document (b)(1) Accountants' Consent 2
ACCOUNTANTS' CONSENT The Board of Directors Xerox Corporation: We consent to incorporation by reference in the Registration Statement (No. 2-86274) on Form S-8 of Xerox Corporation of our report dated May 15, 1995, relating to the statements of net assets available for plan benefits of the Xerox Corporation Profit Sharing and Savings Plan as of November 30, 1994 and 1993, and the related statements of changes in net assets available for plan benefits for the years then ended, which report appears in the November 30, 1994 Annual Report on Form 11-K of the Xerox Corporation Profit Sharing and Savings Plan. KPMG PEAT MARWICK LLP Rochester, New York May 15, 1995