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, 1996 OR [] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from ______________ to _______________ Commission File Number 1-4471 A. Full title of the plan and address of the plan, if different from that of the issuer named below: THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Xerox Corporation P.O. Box 1600 Stamford, Connecticut 06904-1600 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. THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Patricia M. Nazemetz Stamford, Connecticut Dated June 26, 1997 2 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Financial Statements and Schedule December 31, 1996 and 1995 (With Independent Auditors' Report Thereon) THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Statement of Net Assets Available for Plan Benefits with Fund Information December 31, 1996
Fund Information ----------------------------------------------------------------------------------------------------------- Small Company Xerox Segregated Employee International U.S Stock Stock Balanced Income Stock Assets Loan Stock Fund Fund Fund Fund Fund Fund Fund Total Fund (see note 4 ) Assets: Employer contributions receivable $ 256,046 280,792 411,977 1,038,178 556,804 533,368 - - 3,077,165 Investment in employees' loans - - - - - - - 11,350,450 11,350,450 Investment in Master Trust 7,864,634 7,055,404 7,380,655 48,959,548 84,907,703 16,083,001 - - 172,250,945 Total assets 8,120,680 7,336,196 7,792,632 49,997,726 85,464,507 16,616,369 - 11,350,450 186,678,560 Liabilities: Accrued expenses and other liabilities 8,973 1,348 4,948 26,563 15,378 (1,782) - - 55,428 Due from (to) other funds 104,649 30,316 34,663 95,409 (264,241) (232,839) - 232,043 - Net assets available for plan benefits $ 8,216,356 7,365,164 7,822,347 50,066,572 85,184,888 16,385,312 - 11,582,493 186,623,132 The accompanying notes are an integral part of the financial statements. THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Statement of Net Assets Available for Plan Benefits with Fund Information December 31, 1995
Fund Information ----------------------------------------------------------------------------------------------------------- Small Company Xerox Segregated Employee International U.S Stock Stock Balanced Income Stock Assets Loan Stock Fund Fund Fund Fund Fund Fund Fund Total Fund (see note 4 ) Assets: Employer contributions receivable $ 211,193 250,898 174,965 1,043,908 843,985 397,075 - - 2,922,024 Investment in employees' loans - - - - - - - 10,139,531 10,139,531 Investment in Master Trust 4,104,338 3,313,901 3,371,172 39,083,944 94,522,635 8,762,055 85,695 - 153,243,740 Total assets 4,315,531 3,564,799 3,546,137 40,127,852 95,366,620 9,159,130 85,695 10,139,531 166,305,295 Liabilities: Accrued expenses and other liabilities 248 2,625 1,371 39,194 18,647 (248) - - 61,837 Due from (to) other funds 30,673 139,839 96,345 68,885 (1,011,209) 374,189 - 301,278 - Net assets available for plan benefits $ 4,345,956 3,702,013 3,641,111 40,157,543 94,336,764 9,533,567 85,695 10,440,809 166,243,458 The accompanying notes are an integral part of the financial statements. THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Statement of Changes in Net Assets Available for Plan Benefits with Fund Information Year ended December 31, 1996
Fund Information ---------------------------------------------------------------------------------------------------------------- Small Company Xerox Segregated Employee International U.S Stock Stock Balanced Income Stock Assets Loan Stock Fund Fund Fund Fund Fund Fund Fund Total Fund (see note 4 ) Contributions: Employees- voluntary 635,693 730,553 664,705 3,678,924 6,179,199 1,094,794 - - 12,983,868 Employer $ 333,754 371,494 488,810 1,521,349 1,772,340 675,052 - - 5,162,799 Total Contributions 969,447 1,102,047 1,153,515 5,200,273 7,951,539 1,769,846 - - 18,146,667 Net income from Master Trust investments, net of administrative expenses 1,231,660 1,088,917 1,215,520 7,863,559 5,292,502 2,105,714 135,231 - 18,933,103 Interest income on employees' loans - - - - - - - 851,082 851,082 Total 2,201,107 2,190,964 2,369,035 13,063,832 13,244,041 3,875,560 135,231 851,082 37,930,852 Benefit payments (452,950) (172,350) (239,220) (4,184,856) (12,100,391) (401,411) - - (17,551,178) Transfers among funds 2,122,243 1,644,537 2,051,421 1,030,053 (10,295,526) 3,377,596 (220,926) 290,602 - Net increase (decrease) in net assets available for plan benefits 3,870,400 3,663,151 4,181,236 9,909,029 (9,151,876) 6,851,745 (85,695) 1,141,684 20,379,674 Net assets available for plan benefits: Beginning of year 4,345,956 3,702,013 3,641,111 40,157,543 94,336,764 9,533,567 85,695 10,440,809 166,243,458 End of year 8,216,356 7,365,164 7,822,347 50,066,572 85,184,888 16,385,312 - 11,582,493 186,623,132 The accompanying notes are an integral part of the financial statements. THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Statement of Changes in Net Assets Available for Plan Benefits with Fund Information Year ended December 31, 1995
7Fund Information ---------------------------------------------------------------------------------------------------------------- Small Company Xerox Segregated Employee International U.S Stock Stock Balanced Income Stock Assets Loan Stock Fund Fund Fund Fund Fund Fund Fund Total Fund (see note 4 ) Contributions: Employees- voluntary 419,960 360,707 315,241 3,809,861 7,862,875 774,063 - - 13,542,707 Employer $ 285,946 297,649 217,513 1,045,428 2,049,923 511,263 - - 4,407,722 705,906 658,356 532,754 4,855,289 9,912,798 1,285,326 - - 17,950,429 Net income from Master Trust investments, net of administrative expenses 522,799 575,275 413,561 7,238,985 7,184,733 2,406,168 - - 18,341,521 Interest income on employees' loans - - - - - - - 656,459 656,459 Total 1,228,705 1,233,631 946,315 12,094,274 17,097,531 3,691,494 - 656,459 36,948,409 Benefit payments (176,424) (91,092) (101,305) (3,367,878) (13,502,814) (785,210) - - (18,024,723) Transfers among funds (86,611) 1,219,379 1,347,650 (286,580) (2,087,659) 1,098,599 (1,788,510) 583,732 - Transfer from AMTX, Inc. - - - - 104,799 - - - 104,799 Transfer to Retirement Income Guarantee Plan of the Xerox Corporation and the Xerographic Division, Union of Needletrades, Industrial and Textile Employees, A.F.L. - C.I.O. - C.L.C. - - - - (1,202) - - - (1,202) Net increase (decrease) in net assets available for plan benefits 965,670 2,361,918 2,192,660 8,439,816 1,610,655 4,004,883 (1,788,510) 1,240,191 19,027,283 Net assets available for plan benefits: Beginning of year 3,380,286 1,340,095 1,448,451 31,717,727 92,726,109 5,528,684 1,874,205 9,200,618 147,216,175 End of year 4,345,956 3,702,013 3,641,111 40,157,543 94,336,764 9,533,567 85,695 10,440,809 166,243,458 The accompanying notes are an integral part of the financial statements. THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements December 31, 1996 and 1995 (1) Description of Plan The following description of the Profit Sharing and Savings Plan of Xerox Corporation and The Xerographic Division, Union of Needletrades, Industrial and Textile Employees, A.F.L - C.I.O. - C.L.C. (Plan) provides only general information. Participants should refer to the summary plan description or plan document for a more complete description of the Plan's provisions. General The Plan is a defined contribution plan covering substantially all domestic full and part-time Union of Needletrades, Industrial and Textile Employees, A.F.L. - C.I.O. - C.L.C. employees of Xerox Corporation (sponsor). Employees hired on or before the first working day in July are eligible to participate in the Plan immediately. Otherwise, employees are eligible to participate beginning on the next January 1. 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. Amounts allocated to participants who have elected to withdraw from the Plan but have not been paid are $122,742 and $1,875,933 at December 31, 1996 and 1995 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 a combination of before-tax and after-tax payroll deductions. (The maximum before-tax contribution for the 1996 calendar year is $9,500.) Employees are immediately vested in their savings contributions. Xerox Corporation matches 35% of employee savings contributions, up to a maximum match equaling 4% of annual pay. These contributions are made annually to eligible participants of record on the last day of February following the Plan year-end. The 1996 contribution will be recorded in the 1997 financial statements. 8 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (1) Description of Plan (continued) 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 and the participant's length of service. 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. During 1996, the sponsor's ROA was 17.8%, which resulted in an optional profit sharing contribution for all eligible active employees at December 31, 1996 equal to 10.0% of pay or $20,644,353. Participants elected to invest $3,077,165 into the Plan at December 31, 1996. During 1995, the sponsor's ROA was 18.5%, which resulted in an optional profit sharing contribution for all eligible active employees at December 31, 1995 equal to 10.0% of pay or $21,672,430. Participants elected to invest $2,922,024 into the Plan at December 31, 1995. 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. U.S. Stock Fund -- Invests primarily in stocks of medium to large U.S. companies. 9 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (1) Description of Plan (continued) Small Company Stock Fund -- Invests primarily in stocks of smaller U.S. companies that fund managers believe have greater value than indicated by the current market price, or above average prospects for long-term growth. Balanced Fund -- Under normal market conditions, invests approximately 70% in stocks; most of the remainder in bonds; some real estate, private placements, and cash. The mix may shift with market outlook. Income Fund -- Invests in contracts with insurance companies and banks; short to intermediate duration, high-quality bonds. Xerox Stock Fund -- Invests in Xerox Corporation common stock and cash for administrative purposes. Segregated Assets Fund This fund was established on April 1, 1991 and represented participant investments in certain guaranteed investment contracts which were 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. At December 31, 1996, market value on loans approximates fair value. Loan issuances net of principal repayments on outstanding loans are reflected as a transfer among funds in the statement of changes of net assets available for benefits. (2) Federal Income Taxes The Plan obtained its latest determination letter from the Internal Revenue Service (IRS) on September 8, 1995, covering Plan amendments through December 31, 1994, indicating that the Plan, as designed, was in compliance 10 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (2) Federal Income Taxes (continued) with the applicable requirements of the Internal Revenue Code. 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. (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, 1996: Xerox Corporation Profit Sharing and Savings Plan; 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.; and XDS Investment Plan. The Master Trust has six investment pools -- 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 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 addition, prior to December 31, 1996, there was a Segregated Assets Fund which is discussed in note 4. 11 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (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, 1996
12Small Company Xerox International U.S Stock Stock All Other Income Stock Stock Pool Pool Pool Fund Fund Total Assets Pool Cash (overdraft) $505,732 (39,735) (399) 79,265 3,912,873 - 4,457,736 Receivables: Dividends 1,176,755 1,921,373 271,522 227,806 3 1,166,031 4,763,490 Interest 219,206 241,570 466,842 12,726,913 7,817,415 3,570 21,475,516 Due from brokers 16,297,932 5,998,581 2,839,181 13,834,640 - - 38,970,334 Total receivables 17,693,893 8,161,524 3,577,545 26,789,359 7,817,418 1,169,601 65,209,340 Investments at fair value: At quoted market value: Short-term investments 30,587,252 55,085,204 105,175,194 286,264,166 69,131,134 1,025,621 547,268,571 Fixed income investments 9,584,433 - - 1,120,334,856 349,887,222 - 1,479,806,511 Equity securities: Xerox common stock - - - - - 212,199,630 212,199,630 Other 913,174,980 1,761,958,805 686,169,575 278,281,301 3,012,359 - 3,642,597,020 At estimated fair value Interest in estate trusts - - - 119,317,087 - - 119,317,087 Other investments - - - 152,511,242 - - 152,511,242 Investments at contract value: Investment contracts with insurance companies and banks - - - - 580,604,526 - 580,604,526 Total investments 953,346,665 1,817,044,009 791,344,769 1,956,708,652 1,002,635,241 213,225,251 6,734,304,587 Total assets 971,546,290 1,825,165,798 794,921,915 1,983,577,276 1,014,365,532 214,394,852 6,803,971,663 Due to brokers 5,247,237 4,318,387 2,815,356 39,957,068 16,658,058 608,287 69,604,393 Net assets $ 966,299,053 1,820,847,411 792,106,559 1,943,620,208 997,707,474 213,786,565 6,734,367,270 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) The allocation of Master Trust investments by investment pool and fund as of December 31, 1996 is as follows:
13Small Company Xerox International U.S Stock Stock Balanced Income Stock Stock Fund Fund Fund Fund Fund Total Fund International Stock Pool $ 146,849,493 - - 819,449,560 - - 966,299,053 U.S. Stock Pool - 145,682,101 - 1,675,165,310 - - 1,820,847,411 Small Company Stock Pool - - 143,641,654 648,464,905 - - 792,106,559 All Other Pool - - - 1,943,620,208 - - 1,943,620,208 Income Fund - - - - 997,707,474 - 997,707,474 Xerox Stock Fund - - - - - 213,786,565 213,786,565 Total $ 146,849,493 145,682,101 143,641,654 5,086,699,983 997,707,474 213,786,565 6,734,367,270 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) Investments in the Master Trust for all participating plans as of December 31, 1996 are as follows:
11Small Company Xerox International U.S Stock Stock Balanced Income Stock Stock Fund Fund Fund Fund Fund Total Fund Xerox Corporation Profit Sharing and Savings Plan $ 138,984,859 138,626,697 136,260,999 756,247,022 685,279,435 197,703,564 2,053,102,576 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. 7,864,634 7,055,404 7,380,655 48,959,548 84,907,703 16,083,001 172,250,945 Xerox Corporation Retirement Income Guarantee Plan - - - 3,841,835,378 198,560,653 - 4,040,396,031 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. - - - 439,135,151 28,959,683 - 468,094,834 XDS Investment Plan - - - 522,884 - - 522,884 Total $ 146,849,493 145,682,101 143,641,654 5,086,699,983 997,707,474 213,786,565 6,734,367,270 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (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, 1995:
12Small Company Xerox Segregated International U.S Stock Stock All Other Income Stock Assets Stock Pool Pool Pool Fund Fund Fund Total Assets Pool (see note 4) Cash (overdraft) $ 112 (50) (11) 11,111 - - 11,162 Receivables: Accrued dividends 1,588,368 926,468 198,054 1,094,896 - 754,349 - 4,562,135 Accrued interest 86,628 438,421 187,760 11,002,442 7,929,389 3,435 - 19,648,075 Due from brokers 7,721,360 81,205,650 2,438,355 17,443,810 - - - 108,809,175 Total receivables 9,396,356 82,570,539 2,824,169 29,541,148 7,929,389 757,784 - 133,019,385 Investments at fair value: At market value: Short-term investments 9,268,743 44,489,749 49,274,613 197,009,116 44,703,298 789,372 - 345,534,891 Fixed income investments 9,589,491 10,226,338 - 833,168,785 290,096,610 - - 1,143,081,224 Equity securities: Xerox common stock - - - - - 142,246,963 - 142,246,963 Other 752,790,518 1,305,238,786 540,752,355 715,008,555 - - - 3,313,790,214 Investments at contract value: Investment contracts with insurance companies and banks - - - - 755,604,296 - 1,269,049 756,873,345 Investment in real estate trusts - - - 135,536,235 - - - 135,536,235 Other investments - - - 119,926,428 - - - 119,926,428 Total investments 771,648,752 1,359,954,873 590,026,968 2,000,649,119 1,090,404,204 143,036,335 1,269,049 5,956,989,300 Total assets 781,045,220 1,442,525,362 592,851,126 2,030,201,378 1,098,333,593 143,794,119 1,269,049 6,090,019,847 Due to brokers 3,768,819 82,671,588 4,181,722 83,214,374 - 2,736,487 - 176,572,990 Net assets $ 777,276,401 1,359,853,774 588,669,404 1,946,987,004 1,098,333,593 141,057,632 1,269,049 5,913,446,857 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) The allocation of Master Trust investments by investment pool and fund as of December 31, 1995 is as follows:
13Small Company Xerox Segregated International U.S Stock Stock Balanced Income Stock Assets Stock Fund Fund Fund Fund Fund Fund Total Fund (see note 4) International Stock Pool $ 81,173,622 - - 696,102,779 - - - 777,276,401 U.S. Stock Pool - 83,817,175 - 1,276,036,599 - - - 1,359,853,774 Small Company Stock Pool - - 77,790,975 510,878,429 - - - 588,669,404 All Other Pool - - - 1,946,987,004 - - - 1,946,987,004 Income Fund - - - - 1,098,333,593 - - 1,098,333,593 Xerox Stock Fund - - - - - 141,057,632 - 141,057,632 Segregated Assets Fund - - - - - - 1,269,049 1,269,049 Total $ 81,173,622 83,817,175 77,790,975 4,430,004,811 1,098,333,593 141,057,632 1,269,049 5,913,446,857 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) Investments in the Master Trust for all participating plans as of December 31, 1995 are as follows:
17Small Company Xerox Segregated International U.S Stock Stock Balanced Income Stock Assets Stock Fund Fund Fund Fund Fund Fund Total Fund (see note 4) Xerox Corporation Profit Sharing and Savings Plan $ 77,069,284 80,503,274 74,419,803 602,798,747 761,171,723 132,295,577 864,596 1,729,123,004 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. 4,104,338 3,313,901 3,371,172 39,083,944 94,522,635 8,762,055 85,695 153,243,740 Xerox Corporation Retirement Income Guarantee Plan - - - 3,380,714,262 212,647,377 - 279,767 3,593,641,406 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. - - - 406,958,302 29,991,858 - 38,991 436,989,151 XDS Investment Plan - - - 449,556 - - - 449,556 Total $ 81,173,622 83,817,175 77,790,975 4,430,004,811 1,098,333,593 141,057,632 1,269,049 5,913,446,857 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) Statement of Changes in Net Assets of the Master Trust for the year ended December 31, 1996
18Small Company Xerox Segregated International U.S Stock Stock All Other Income Stock Assets Stock Pool Pool Pool Fund Fund Fund Total Pool (see note 4) Additions: Transfers in $ 17,970,853 23,688,458 18,160,218 161,002,215 60,018,213 25,611,224 - 306,451,181 Investment earnings: Interest 1,849,864 7,457,727 5,679,022 79,669,309 70,300,811 57,074 1,615,842 166,629,649 Dividends 11,016,178 62,560,466 3,265,515 26,621,520 3 4,326,332 - 107,790,014 Net appreciation 174,079,634 206,545,174 149,114,478 185,387,318 (5,232,588) 27,564,968 - 737,458,984 Margin variation on futures contracts (54,411) 16,271,835 8,279,360 (588,118) (169,870) - - 23,738,796 Other 552,365 101,265 254,250 2,267,517 92,595 10,768 - 3,278,760 Total investment earnings 187,443,630 292,936,467 166,592,625 293,357,546 64,990,951 31,959,142 1,615,842 1,038,896,203 Total additions 205,414,483 316,624,925 184,752,843 454,359,761 125,009,164 57,570,366 1,615,842 1,345,347,384 Deductions: Administrative expenses 6,365,164 2,184,620 3,132,546 13,641,792 2,095,064 144,976 - 27,564,162 Transfers out 7,506,744 6,729,045 6,077,292 325,510,912 139,266,050 11,772,766 - 496,862,809 Total deductions 13,871,908 8,913,665 9,209,838 339,152,704 141,361,114 11,917,742 - 524,426,971 Transfers between funds/pools (2,519,923) 153,282,377 27,894,150 (118,573,853) (84,274,169) 27,076,309 (2,884,891) - Net assets: Beginning of year $777,276,401 1,359,853,774 588,669,404 1,946,987,004 1,098,333,593 141,057,632 1,269,049 5,913,446,857 End of year $966,299,053 1,820,847,411 792,106,559 1,943,620,208 997,707,474 213,786,565 - 6,734,367,270 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) The allocation of net income from Master Trust investments, net of administrative expenses, by investment pool and fund for the year ended December 31, 1996
19Small Company Xerox Segregated International U.S Stock Stock Balanced Income Stock Assets Stock Fund Fund Fund Fund Fund Fund Total Fund (see note 4) International Stock Pool $24,023,484 - - 157,054,982 - - - 181,078,466 U.S. Stock Pool - 23,621,893 - 267,129,954 - - - 290,751,847 Small Company Stock Pool - - 25,610,108 137,849,971 - - - 163,460,079 All Other Pool - - - 279,715,754 - - - 279,715,754 Income Fund - - - - 62,895,887 - 1,615,842 64,511,729 Xerox Stock Fund - - - - - 31,814,166 - 31,814,166 Total $24,023,484 23,621,893 25,610,108 841,750,661 62,895,887 31,814,166 1,615,842 1,011,332,041 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) Net income from Master Trust investments, net of administrative expenses, for all participating plans for the year ended December 31, 1996
17Small Company Xerox Segregated International U.S Stock Stock Balanced Income Stock Assets Stock Fund Fund Fund Fund Fund Fund Total Fund (see note 4) Xerox Corporation Profit Sharing and Savings Plan $22,791,824 22,532,976 24,394,588 123,085,243 43,834,849 29,708,452 1,124,757 267,472,689 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.* 1,231,660 1,088,917 1,215,520 7,863,559 5,157,271 2,105,714 135,231 18,797,872 Xerox Corporation Retirement Income Guarantee Plan - - - 637,283,175 12,226,058 - 330,112 649,839,345 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. - - - 73,427,145 1,677,709 - 25,742 75,130,596 XDS Investment Plan - - - 91,539 - - 91,539 Total $24,023,484 23,621,893 25,610,108 841,750,661 62,895,887 31,814,166 1,615,842 1,011,332,041 *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. THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) Statement of Changes in Net Assets of the Master Trust for the year ended December 31, 1995:
18Small Company Xerox Segregated International U.S Stock Stock All Other Income Stock Assets Stock Pool Pool Pool Fund Fund Fund Total Pool (see note 4) Additions: Transfers in $ 10,919,316 10,753,389 9,981,002 84,925,835 82,263,870 17,720,205 - 216,563,617 Investment earnings: Interest 797,053 3,551,707 2,697,288 76,515,170 75,080,721 68,860 - 158,710,799 Dividends 11,086,858 40,508,183 9,230,997 27,300,325 - 2,953,710 - 91,080,073 Netappreciation 103,304,225 291,258,259 100,229,056 242,818,178 10,799,345 36,855,487 - 785,264,550 Margin variation on futures contracts 955,499 242,881 - 25,280,953 (177,409) - - 26,301,924 Other 188,292 30,830 167,806 841,022 34,575 2,866 - 1,265,391 Total investment earnings 116,331,927 335,591,860 112,325,147 372,755,648 85,737,232 39,880,923 - 1,062,622,737 Total additions 127,251,243 346,345,249 122,306,149 457,681,483 168,001,102 57,601,128 - 1,279,186,354 Deductions: Administrative expenses 5,373,025 4,088,595 3,284,523 12,857,817 2,012,683 94,743 - 27,711,386 Transfers out 4,455,977 3,632,277 3,303,774 327,339,211 160,481,105 10,231,722 - 509,444,066 Total deductions 9,829,002 7,720,872 6,588,297 340,197,028 162,493,788 10,326,465 - 537,155,452 Transfers between funds/pools (3,439,292) 101,919,449 (118,152,078) 6,613,550 37,327,292 2,148,420 (26,417,341) - Net assets: Beginning of year $663,293,452 919,309,948 591,103,630 1,822,888,999 1,055,498,987 91,634,549 27,686,390 5,171,415,955 End of year $777,276,401 1,359,853,774 588,669,404 1,946,987,004 1,098,333,593 141,057,632 1,269,049 5,913,446,857 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) The allocation of net income from Master Trust investments, net of administrative expenses, by investment pool and fund for the year ended December 31, 1995:
19Small Company Xerox International U.S Stock Stock Balanced Income Stock Stock Fund Fund Fund Fund Fund Total Fund International Stock Pool $10,942,675 - - 100,016,227 - - 110,958,902 U.S. Stock Pool - 16,469,124 - 315,034,141 - - 331,503,265 Small Company Stock Pool - - 11,827,943 97,212,681 - - 109,040,624 All Other Pool - - - 359,897,831 - - 359,897,831 Income Fund - - - - 83,724,549 - 83,724,549 Xerox Stock Fund - - - - - 39,786,180 39,786,180 Segregated Assets Fund - - - - - - - Total $10,942,675 16,469,124 11,827,943 872,160,880 83,724,549 39,786,180 1,034,911,351 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) Net income from Master Trust investments, net of administrative expenses, for all participating plans for the year ended December 31, 1995:
23Small Company Xerox International U.S Stock Stock Balanced Income Stock Stock Fund Fund Fund Fund Fund Total Fund Xerox Corporation Profit Sharing and Savings Plan $10,423,107 15,892,723 11,414,088 113,729,773 57,960,411 37,379,321 246,799,423 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.* 519,568 576,401 413,855 7,245,759 7,181,696 2,406,859 18,344,138 Xerox Corporation Retirement Income Guarantee Plan - - - 669,131,478 16,272,638 - 685,404,116 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. - - - 81,984,094 2,309,804 - 84,293,898 XDS Investment Plan - - - 69,776 - - 69,776 Total $10,942,675 16,469,124 11,827,943 872,160,880 83,724,549 39,786,180 1,011,332,041 *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. THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) With respect to the Plan, the Joint Administrative Board (JAB) is responsible for establishing investment guidelines, reviewing the investment decisions and reviewing investment results. The JAB consists at present of five Xerox Corporation representatives and five union representatives. Marketable securities are valued at the last reported sales price on the last business day of the year. Quotations are obtained from national securities exchanges or, in instances where securities are not listed on any of the exchanges, quotations are obtained from brokerage firms. Non-readily marketable investments, which include private placements, are carried at fair value, based on the cost of the investments, developments concerning the portfolio investments of the private placements, and such 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: (i) The average investment yields for the years ended December 31, 1996 and 1995 were 7.3% and 6.9%, respectively. (ii) The crediting interest rates at December 31, 1996 and 1995 ranged from 5.0% to 9.3%. (iii) The fair value, as determined by discounting estimated future cash flows for traditional GIC's and the market value of underlying investments and the associated wrapper for synthetic GIC'S, at December 31, 1996 and 1995 was $588,280,797 and $772,781,602, respectively. Contract values were $580,604,526 and $756,873,345 at December 31,1996 and 1995, respectively. The Master Trust invests in real estate group trusts. These trusts provide pension and profit sharing plans with a medium for pooling their funds for investment in income producing real estate. The investment trusts value real estate holdings at estimated market value based upon independent appraisals, consideration of significant changes in economic circumstances, and capital additions made to properties after the appraisal date. Such market value estimates necessarily involve subjective judgments. Accordingly, the actual market price of the real estate can only be determined by negotiation between independent third parties in a sales transaction. 24 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued) 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 investments. The net appreciation (depreciation) of investments for the year ended December 31, 1996 is as follows:
THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (3) Master Trust (continued)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 $ (1,209,445) 24,423 - 30,370,038 (5,232,588) - 23,952,428 Xerox common stock - - - - - 27,564,968 27,564,968 Other equity investments 175,289,079 206,520,751 149,114,478 92,988,950 - - 623,913,258 Investments at estimated fair value: Real estate - - - 869,897 - - 869,897 Other investments - - - 61,158,433 - - 61,158,433 Total $174,079,634 206,545,174 149,114,478 185,387,318 (5,232,588) 27,564,968 737,458,984 The net appreciation (depreciation) of investments for the year ended December 31, 1995 is as follows:
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, $66 million in affected assets were transferred into a Segregated Assets Fund. Through December 31, 1996, the Xerox retirement and savings plans have received $66 million in payments related to the ELIC investments. These payments represent the recovery of 100% of each participant's original investment plus $1.6 million in interest. Should Xerox receive additional payments from ELIC for unrecognized interest income associated with the original GIC's, the proceeds will be allocated to those participants originally invested in ELIC based upon their percent interest on April 11, 1991. All proceeds will be recorded through the income fund and transferred to other funds based on a participants allocation elections at the time of receipt. 26U.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 $ (455,516) 1,871,329 - 63,009,046 10,799,345 - 75,224,204 Xerox common stock - - - - - 36,855,487 36,855,487 Other equity investments 103,759,741 289,386,930 100,229,056 168,529,561 - - 661,905,288 Investments at estimated fair value: Interest in real estate trusts - - - (5,348,896) - - (5,348,896) Other investments - - - 16,628,467 - - 16,628,467 Total $103,304,225 291,258,259 100,229,056 242,818,178 10,799,345 36,855,487 785,264,550 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) Segregated Assets Fund - Investment Contracts With Executive Life Insurance Company THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (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 and other reconciling items) by units outstanding at the valuation date. The total number of units and net asset value per unit outstanding during the year ended December 31, 1996 were 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 January 31: 3,334,551 $1.298843 2.607.160 $1.384328 2.591.438 $1.345363 3,408,036 $11.594012 15.254.214 $6.131268 1.576.864 $5.289206 February 28: 3,419,705 1.311633 2,843,695 1.398277 2,630,400 1.402304 3,397,928 11.698504 14,836,899 6.149365 1,800,655 5.597323 March 31: 3,593,568 1.351739 3,327,284 1.410611 2,722,728 1.453844 3,436,271 11.902984 14,416,534 6.168735 1,809,693 5.383233 April 30: 3,902,332 1.387228 3,808,249 1.426560 2,922,666 1.551849 3,552,393 12.138867 14,294,019 6.193430 1,833,208 6.293252 May 31: 4,305,499 1.395861 3,918,755 1.458338 3,344,836 1.611155 3,600,918 12.333157 14,020,252 6.222871 1,851,268 6.767969 June 30: 4,540,941 1.411045 3,997,087 1.459900 3,693,333 1.551550 3,614,207 12.360292 13,740,468 6.262955 1,933,288 6.941962 July 31: 4,709,658 1.352980 4,100,890 1.386290 3,995,570 1.434285 3,630,066 11.918603 13,594,380 6.295800 2,075,992 6.539139 August 31: 4,760,960 1.383398 4,090,626 1.420414 4,082,210 1.529633 3,636,415 12.212231 13,554,689 6.330015 2,130,580 7.120918 September 30: 4,713,973 1.427807 4,139,591 1.506957 4,019,906 1.608958 3,598,317 12.747171 13,422,642 6.375039 2,238,745 7.001655 October 31: 5,076,899 1.443572 4,150,550 1.542665 4,066,685 1.609340 3,583,903 12.938311 13,408,169 6.425139 2,247,888 6.053273 November 30: 5,189,617 1.518698 4,190,843 1.662408 4,165,680 1.685160 3,596,567 13.604205 13,273,695 6.464303 2,298,425 6.388306 December 31: 5,093,127 1.542035 4,318,074 1.631667 4,293,189 1.716124 3,589,255 13.614407 13,077,944 6.487638 2,330,563 6.899738 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (5) Unit Values (continued) The total number of units and net asset value per unit outstanding during the year ended December 31, 1995 was as follows:
28International 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 January 31: 3,169,561 $1.018130 1,329,325 $1.029036 1,327,320 $1.077083 3,351,130 $9.144290 16,155,691 $5.679131 1,328,658 $4.546439 February 28: 3,035,577 1.019070 1,334,593 1.067032 1,322,355 1.112642 3,274,368 9.386685 15,933,421 5.716524 1,326,524 4.643632 March 31: 2,983,408 1.041911 1,344,743 1.092511 1,384,677 1.148665 3,269,526 9.589252 16,121,091 5.750308 1,350,992 4.925474 April 30: 2,949,175 1.078100 1,464,590 1.117114 1,455,388 1.169514 3,359,641 9.801530 16,633,841 5.786225 1,445,398 5.170663 May 31: 2,879,621 1.101337 1,494,621 1.157223 1,495,823 1.186400 3,332,583 10.072054 16,592,006 5.835838 1,493,408 4.787161 June 30: 2,908,216 1.107386 1,568,770 1.183467 1,601,530 1.245101 3,324,768 10.274284 16,534,575 5.869781 1,527,128 4.944176 July 31: 2,960,759 1.181317 1,645,662 1.220654 1,666,186 1.317888 3,349,135 10.631160 16,470,584 5.901137 1,520,771 5.034070 August 31: 3,003,841 1.171576 1,857,052 1.226346 1,716,908 1.341249 3,368,695 10.696712 16,402,231 5.938466 1,487,881 5.129378 September 30: 3,058,124 1.199565 2,071,657 1.268495 1,867,106 1.372466 3,399,521 10.943127 16,156,115 5.969829 1,472,763 5.695305 October 31: 3,211,091 1.186678 2,146,919 1.256804 2,118,264 1.304997 3,428,208 10.821345 16,065,770 6.010552 1,484,990 5.499589 November 30: 3,239,333 1.205377 2,258,750 1.310500 2,260,207 1.344355 3,408,629 11.113660 15,798,607 6.051636 1,494,729 5.846293 December 31: 3,280,879 1.253083 2,472,696 1.341163 2,490,481 1.354599 3,436,181 11.362424 15,636,291 6.094389 1,505,177 5.846807 The Segregated Assets Fund had 257,331 units outstanding and a net asset value of $85,695 at December 31, 1995. THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (6) Reconciliation of Financial Statements to Form 5500 The following is a reconciliation of net assets available for plan benefits per the financial statements to the Form 5500: December 31 1996 1995
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. 29Net assets available for plan benefits as reported in the Plan financial statements $186,623,132 $166,243,458 Benefit claims payable reported on line 31g of Form 5500 (122,742) (1,875,933) Net assets available for plan benefits as reported in the Plan Form 5500 186,500,390 164,367,525 The following is a reconciliation of benefits paid per the financial statements to the Form 5500: December 31 1996 1995 Benefits paid to participants as reported in the Plan financial statements $17,551,178 18,024,723 Add: Amounts allocated to withdrawing participants at December 31 122,742 1,875,933 Less: Amounts allocated to withdrawing participants at December 31, 1996 and 1995, respectively (1,875,933) (884,395) Benefits paid to participants as reported in the Form 5500 15,797,987 19,016,261 THE PROFIT SHARING PLAN OF XEROX CORPORATION AND THE XEROGRAPHIC DIVISION, UNION OF NEEDLETRADES, INDUSTRIAL AND TEXTILE EMPLOYEES, A.F.L. - C.I.O. - C.L.C. Notes to Financial Statements (7) AMTX, Inc. AMTX, Inc. is a wholly-owned subsidiary of Xerox Corporation. Effective January 1, 1995, the AMTX, Inc. Employee's Retirement Plan was terminated, and employees' balances were transferred into 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. These employees are now participants in that Plan. 8) Stock Split In May 1996, the shareholders approved a three-for-one stock split of the Company's common stock. The stock split does not impact participants' interest in the Xerox Stock Fund. 30 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. Item 27a - Schedule of Assets Held for Investment Purposes December 31, 1996
31Description 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) $ 149,383,456 172,250,945 Investment in Participant Loans Receivable * Loans to Plan participants, maturity dates through 5/31/09, interest rates from 7.0% to 11.5% per annum. - 11,350,450 * Party-in-interest (1) See note 3. INDEPENDENT AUDITORS' REPORT The Plan Administrator and Participants The Profit Sharing Plan of Xerox Corporation and The Xerographic Division, Union of Needletrades, Industrial and Textile Employees, A.F.L.-C.I.O.-C.L.C. We have audited the accompanying statements of net assets available for plan benefits of the Profit Sharing Plan of Xerox Corporation and The Xerographic Division, Union of Needletrades, Industrial and Textile Employees, A.F.L.- C.I.O.-C.L.C. (Plan) as of December 31, 1996 and 1995, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 1996 and 1995, 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 performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes is presented for 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 statement of changes in the 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 April 30, 1997 30 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. 2-86275 and No. 333-22067) on Form S-8 of Xerox Corporation of our report dated April 30, 1997, relating to the statements of net assets available for plan benefits of the Profit Sharing Plan of Xerox Corporation and The Xerographic Division, Union of Needletrades, Industrial and Textile Employees, A.F.L - C.I.O. - C.L.C. (Plan) as of December 31, 1996 and 1995, and the related statements of changes in net assets available for plan benefits for the years then ended, which report appears in the December 31, 1996 Annual Report on Form 11-K of the Xerox Corporation Profit Sharing Plan. KPMG PEAT MARWICK Rochester, New York June 26, 1997