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, 2000
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
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the person who administer the plan have duly caused this actual report
to be signed on its behalf by the undersigned who thereunto duly authorized.
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.
Lawrence Becker
Plan Administrator
Stamford, Connecticut
Dated June 28, 2001
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, 2000 and 1999
(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
December 31, 2000 and 1999
(In thousands)
2000 1999
Assets:
Investment in Master Trust $ 214,941 252,168
Participant notes receivable 14,697 17,337
Net Assets available for
plan benefits $ 229,638 269,505
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
Years ended December 31, 2000 and 1999
(In thousands)
2000 1999
Contributions:
Employer $ 1,973 2,348
Employees' - voluntary 13,085 14,342
Rollovers from external plans 1,258 740
Rollovers from internal plans 22,205 10,659
Total contributions 38,521 28,089
Net loss from Master Trust investments,
net of administrative expenses (31,583) (12,561)
Interest Income on participant notes
receivable 1,342 1,180
Total 8,280 16,708
Benefit Payments (32,102) (20,682)
Transfers among plans (16,045) --
Net decrease in net assets
available for plan benefits (39,867) (3,974)
Net Assets available for plan benefits:
Beginning of year 269,505 273,479
End of year 229,638 269,505
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 the Financial Statements
December 31, 2000 and 1999
(1) Description of Plan and Summary of Significant Accounting Policies
The following description of the Profit Sharing and Savings Plan of Xerox
Corporation and The Xeroxgraphic Division, Union of Needletrades, Industrial
and Textile Employees, AFL - C.I.O - C.L.C (Plan) provides only general
information. Participants should refer to the summary plan description and
the Plan document for a more complete description of the Plan's provisions.
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 are
eligible to participate in the Plan immediately upon hire.
Payments of Benefits
Upon termination of service, a participant may elect to receive either a lump
sum amount equal to the value of his or her account, or may purchase an annuity
payable from a life insurance company. There were no benefits allocated from
the Plan for participants at December 31, 2000 and 1999.
Employee Savings Contributions
Subject to limits imposed by the Internal Revenue Code, eligible employees may
contribute up to 18% of pay (as defined in the Plan) through a combination of
before-tax and after-tax payroll deductions. Employees are immediately vested
in their savings contributions.
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 2000 contribution recorded on March 15, 2000 was
$1,973,000.
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, 2000 and 1999
Xerox Profit Sharing Contribution
A profit sharing payout has three components. They are as follows: (i) 50% of
the payout will come in the form of cash which can be deferred into the
savings plan, (ii) 25% of the payout is automatically deferred to the Xerox
Stock Fund and (iii) 25% of the payment is provided in the form of stock
options which are not a component of this Plan. Employees are immediately
vested in profit sharing contributions.
The maximum profit sharing payout will be 15%. In any given year, the payout
bears a one-to-one relationship to earnings per share (EPS) growth up to 15%.
However, if EPS growth is below 5%, there is no payment.
For the calendar years ended December 31, 2000 and 1999, the sponsor's EPS
growth was below 5%. In accordance with the plan document, there was no Xerox
Profit Sharing contribution for 2000 and 1999.
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 ten investment funds:
International Stock Fund - Invests primarily in stocks of companies outside
the U.S.
U.S. Stock Fund - Invests primarily in stocks of medium to large U.S.
companies.
Small Company Stock Fund - Invests primarily in stocks of smaller U.S.
companies.
Balanced Fund - Fifty/Fifty- Usually invests approximately 50% in stocks and
50% in bonds; some private placements and cash. The mix may shift with the
market outlook.
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, 2000 and 1999
Balanced Fund - More Bonds - Usually invests 30% in stocks, most of the rest in
bonds, some private placements and cash. The mix may shift with market
outlook.
Balanced Fund - More Stocks - Usually invests approximately 70% in stocks, most
of the rest in bonds, some private placements and cash. The mix may shift with
market outlook.
Enhanced Bond Fund - Invests in bonds with an average intermediate duration;
approximately 70% high quality bonds, and 30% high-yield lower quality bonds.
Income Fund - Invests in short to intermediate duration, high quality bonds.
Xerox Stock Fund - Invests in Xerox Corporation common stock and some cash for
administrative purposes.
Marketplace Window- Offers access to no-load mutual funds outside of Xerox
funds.
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 re-deposited into the participants' accounts based on their
current investment allocation elections. At December 31, 2000 and 1999,
market value of loans approximates fair value.
Summary of Significant Accounting Policies
a. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets, liabilities and changes therein, and disclosure of contingent
assets and liabilities. Actual results could differ from those estimates.
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, 2000 and 1999
b. If available, quoted market prices are used to value investments. Non-
readily marketable investments are carried at estimated fair value.
c. Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividend income is recorded
on the ex-dividend date. Derivative investments are marked to market on a
daily basis which is reported as margin variation on futures contracts in the
statement of changes in net assets of the Master Trust.
(2) Federal Income Taxes
The Plan obtained its latest determination letter from the Internal Revenue
Service (IRS) on October 25, 1999, covering Plan amendments through
December 31, 1997, indicating that the Plan, as designed, was in compliance
with the applicable requirements of the Internal Revenue Code. The Plan
administrator and Plan's internal tax counsel believe that the Plan, as
currently designed and operated, is in compliance with the applicable
requirements of the Internal Revenue Code. Accordingly, they believe that the
Plan was qualified and the related trust was tax-exempt as of the financial
statement date.
As long as the Plan continues to be qualified under present Federal income tax
laws and regulations, participants will not be taxed on company contributions
or on investment earnings on such contributions at the time such contributions
and investment earnings are received by the trustee under the Plan, but may be
subject to tax thereon at such time as they receive distributions under the
Plan.
(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, 2000:
Xerox Corporation Profit Sharing and Savings Plan;
Xerox Corporation Retirement Income Guarantee Plan; and
Retirement Income Guarantee Plan of Xerox Corporation and The Xerographic
Division, Union of Needletrades, Industrial and Textile Employees, A.F.L. -
C.I.O. - C.L.C.
THE 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, 2000 and 1999
At December 31, 2000, the Master Trust has eight investment pools - The
International Stock Pool, U.S. Stock Pool, Small Company Stock Pool, Other
Equity Pool, Bond Pool, Income Fund, Xerox Stock Fund, and Marketplace Window.
Participants direct their accounts into investment funds, as described in note
1, which participate in the aforementioned investment pools. Each of the plans
has an ownership interest in one or more of these investment pools in
accordance with that interest as determined by participant fund elections.
The Expense Pool represents net accrued, plan specific administrative expenses
that are attributable to the other equity Pool and the Bond Pool, which
comprise the Balanced Fund. It is not an investment pool.
In September 2000, there was a pool restructure. Assets of the Other Fixed
Pool were transferred to the Bond Pool.
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, 2000 and 1999
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, 2000 is as
follows (in thousands):
Small
International Company
Stock U.S. Stock Stock Income
Assets Pool Pool Pool Fund
Cash (overdraft) $ 13,229 1,840 (1,067) 188
Receivables:
Dividends 1,496 1,672 511 --
Interest 261 352 199 6,357
Due from brokers 900,520 8,791 6,470 2,011
Other 163 -- 5 --
Total receivables 902,440 10,815 7,185 8,368
Investments at fair value:
At quoted market value:
Short-term investments 66,459 52,627 46,281 114,524
Fixed income investments 1,979 -- 1,905 740,552
Equity securities:
Xerox common stock -- -- -- --
Other 1,093,609 2,643,203 752,361 11,808
At estimated fair value:
Interest in real estate
trusts -- -- -- --
Other investments -- -- -- --
Total investments 1,162,047 2,695,830 800,547 866,884
Total assets 2,077,716 2,708,485 806,665 875,440
Liabilities
Due to brokers (901,827) (13,039) (5,036) (161,882)
Other (2,047) (1,604) (855) (337)
Net assets $ 1,173,842 2,693,842 800,774 713,221
Xerox Other
Stock Equity Marketplace Bond
Fund Pool Window Pool Total
-- (1,216) -- (3,342) 9,632
1,329 60 -- 146 5,214
25 833 -- 26,772 34,799
-- 1,217 4,737 115,164 1,038,910
-- -- -- -- 168
1,354 2,110 4,737 142,082 1,079,091
3,853 95,384 -- 117,185 496,313
-- -- -- 2,388,431 3,132,867
133,329 -- -- -- 133,329
-- 121,815 270,330 119,561 5,012,687
-- 2,336 -- -- 2,336
-- 467,956 -- -- 467,956
137,182 687,491 270,330 2,625,177 9,245,488
138,536 688,385 275,067 2,763,917 10,334,211
(21) -- (3,962) (462,159) (1,547,926)
(208) (201) -- (1,560) (6,812)
138,307 688,184 271,105 2,300,198 8,779,473
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, 2000 and 1999
The following 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, 1999 is as
follows (in thousands):
Small
International Company
Stock U.S. Stock Stock Income
Assets Pool Pool Pool Fund
Cash (overdraft) $ (230) 2 2 (68)
Receivables:
Dividends 1,316 1,645 255 --
Interest 220 574 338 7,653
Due from brokers 2,231 261 4,171 10,115
Other 80 -- -- --
Total receivables 3,847 2,480 4,764 17,768
Investments at fair value:
At quoted market value:
Short-term investments 67,026 115,890 146,755 106,070
Fixed income investments 2,102 -- -- 774,937
Equity securities:
Xerox common stock -- -- -- --
Other 1,379,984 2,990,177 683,719 3,852
At estimated fair value:
Interest in real estate
trusts -- -- -- --
Other investments -- -- -- --
Total investments 1,449,112 3,106,067 830,474 884,859
Total assets 1,452,729 3,108,549 835,240 902,559
Liabilities
Due to brokers (11,121) (2,311) (4,159) (128,244)
Other (1,970) (1,662) (702) (468)
Net assets $ 1,439,638 3,104,576 830,379 773,847
Xerox Other Other
Stock Equity Fixed Marketplace Bond
Fund Pool Pool Window Pool Total
-- -- -- -- 38,086 37,792
3,697 -- -- -- -- 6,913
38 674 216 -- 20,876 30,589
-- -- -- 1,891 52,405 71,074
-- -- -- -- -- 80
3,735 674 216 1,891 73,281 108,656
8,059 166,235 52,809 -- 147,207 810,051
-- -- -- -- 1,875,604 2,652,643
427,828 -- -- -- -- 427,828
-- 145,046 -- 161,843 70,755 5,435,376
-- 3,505 -- -- -- 3,505
-- 340,264 -- -- -- 340,264
435,887 655,050 52,809 161,843 2,093,566 9,669,667
439,622 655,724 53,025 163,734 2,204,933 9,816,115
-- (133) -- (1,649) (220,434) (368,051)
(43) (297) (167) -- (1,463) (6,772)
439,579 655,294 52,858 162,085 1,983,036 9,441,292
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, 2000 and 1999
Investment in Master Trust for all participating plans as of December 31, 2000
and 1999 is as follows (in thousands):
2000 1999
Xerox Corporation Profit Sharing and Savings Plan $ 3,281,373 3,468,763
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. 214,941 252,168
Xerox Corporation Retirement Income Guarantee Plan 4,802,628 5,159,922
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. 480,531 560,439
Total $ 8,779,473 9,441,292
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, 2000 and 1999
Statement of Changes in Net Assets of the Master Trust for the year ended
December 31, 2000 is as follows (in thousands):
Small
International Company
Stock U.S. Stock Stock Income
Pool Pool Pool Fund
Additions:
Transfers in $ 50,975 106,581 88,053 235,391
Investment earnings:
Interest 2,637 5,844 2,895 46,488
Dividends 17,089 22,238 3,184 571
Net appreciation
(depreciation) (222,049) (251,994) 23,849 8,678
Margin variation on
futures contracts (238) (2,743) (971) (319)
Other (13,498) 836 753 (103)
Total investment
Earnings (216,059) (225,819) 29,710 55,315
Total additions (165,084) (119,238) 117,763 290,706
Deductions:
Administrative expenses (10,024) (9,039) (4,345) (1,856)
Transfers out (73,130) (159,457) (64,123) (349,746)
Total deductions (83,154) (168,496) (68,468) (351,332)
Transfer between fund/pool (17,558) (123,000) (78,900) --
Net assets:
Beginning of year 1,439,638 3,104,576 830,379 773,847
End of year $ 1,173,842 2,693,842 800,774 713,221
Xerox Other Other
Stock Equity Fixed Marketplace Bond Expense
Fund Pool Pool Window Pool Pool Total
174,473 -- -- 239,382 18,165 -- 913,020
453 2,612 2,283 -- 109,564 -- 172,776
13,499 9,635 -- 19,935 3,854 -- 90,005
(406,949) 410,854 868 (66,301) 50,032 -- (453,012)
-- (4,669) 403 -- (2,414) -- (10,951)
(12) 12,109 -- 15 2,628 -- 2,728
(393,009) 430,541 3,554 (46,351) 163,664 -- (198,454)
(218,536) 430,541 3,554 193,031 181,829 -- 714,566
(447) (2,529) 55 (263) (7,798) (1,785) (38,031)
(82,289) (367,465) (91,553) (83,748) (68,898) 1,785 (1,338,354)
(82,736) (369,994) (91,498) (84,011) (76,696) -- (1,376,385)
-- (27,657) 35,086 -- 212,029 -- --
439,579 655,294 52,858 162,085 1,983,036 -- 9,441,292
138,307 688,184 -- 271,105 2,300,198 -- 8,779,473
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, 2000 and 1999
Statement of Changes in Net Assets of the Master Trust for the year ended
December 31, 1999 is as follows (in thousands):
Small
International Company
Stock U.S. Stock Stock Income
Pool Pool Pool Fund
Additions:
Transfers in $ 90,431 155,074 46,723 154,653
Investment earnings:
Interest 1,625 6,862 2,424 51,889
Dividends 19,430 27,271 3,499 168
Net appreciation
(depreciation) 336,067 544,823 203,930 (22,348)
Margin variation on
futures contracts (385) (6,508) (2,146) 633
Other 1,296 823 376 889
Total investment
Earnings 358,033 573,271 208,083 31,231
Total additions 448,464 728,345 254,806 185,884
Deductions:
Administrative expenses (8,744) (8,684) (3,333) (2,323)
Transfers out (95,513) (125,724) (71,348) (346,863)
Total deductions (104,257) (134,408) (74,681) (349,186)
Transfer between fund/pool 13,952 (495,000) (31,000) --
Net assets:
Beginning of year 1,081,479 3,005,639 681,254 937,149
End of year $ 1,439,638 3,104,576 830,379 773,847
Xerox Other Other
Stock Equity Fixed Marketplace Bond Expense
Fund Pool Pool Window Pool Pool Total
418,469 794 12,398 150,408 36,210 -- 1,065,160
610 7,461 8,786 -- 76,242 -- 155,899
10,769 3,682 -- 5,519 2,045 -- 72,383
(456,299) 210,313 (20,000) 25,002 (52,983) -- 768,505
-- (15,280) (1,719) -- 261 -- (25,144)
(10) 26,733 3 -- 1,699 -- 31,809
(444,930) 232,909 (12,930) 30,521 27,264 -- 1,003,452
(26,461) 233,703 (532) 180,929 63,474 -- 2,068,612
(660) (1,482) (798) (48) (6,442) (1,813) (34,327)
(177,059) (563,105) (782) (38,592) (33,879) -- (1,452,865)
(177,719) (546,587) (1,580) (38,640) (40,321) (1,813) (1,487,192)
-- 291,588 (105,500) -- 325,000 1,885 925
643,759 694,590 160,470 19,796 1,634,883 (72) 8,858,947
439,579 655,294 52,858 162,085 1,983,036 -- 9,441,292
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, 2000 and 1999
Net income(loss) from Master Trust investments, net of administrative
expenses, for all participating plans for the years ended December 31, 2000
and 1999 is as follows (in thousands):
2000 1999
Xerox Corporation Profit Sharing and Savings Plan $ (401,216) 49,785
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. (31,583) (12,561)
Xerox Corporation Retirement Income Guarantee Plan 176,557 840,877
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. 19,757 91,024
Total . $ (236,485) 969,125
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, 2000 and 1999
With respect to the Plan, the Joint Administration Board (JAB) is responsible
for establishing investment objectives and policies, reviewing the investment
decisions and reviewing investment results. The JAB consists of four 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 upon the cost of the investments, developments
concerning the portfolio investments of the private placements, and other
factors as the managing general partners of these investments may deem
relevant. Private placement investments are valued by the investment manager
general partner on a periodic basis and these values are reflected in the
Plans as they are received by the trustee. The valuations do not necessarily
represent amounts which might ultimately be realized from the investments.
At December 31, 2000 and 1999, the Master Trust held no investment contracts
with insurance companies or banks.
The Master Trust invests in real estate group trusts. These trusts provide
pension and profit sharing plans with a medium for pooling their funds for
investment in income producing real estate. The investment trusts value real
estate holdings at estimated market value based upon independent appraisals,
consideration of significant changes in economic circumstances, and capital
additions made to properties after the appraisal date. Such market value
estimates necessarily involve subjective judgments. Accordingly, the actual
market price of the real estate can only be determined by negotiation between
independent third parties in a sales transaction.
Purchases and sales of securities are recorded on a trade date basis. Dividend
income is record on the ex-dividend date. Interest income is recorded as
earned. Margin variation represents market fluctuations on futures investments.
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, 2000 and 1999
Derivative financial instruments are used by the Master Trust's equity and
balanced portfolio investment managers primarily to alter 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 swap agreements and exchange
traded futures and options as substitutes for certain types of fixed income
securities. Leveraging of the Master Trust's assets and speculation are
prohibited. Currency hedge positions are not permitted to exceed the level of
exposure in the related Master Trust's assets.
The derivatives most commonly used by the investment managers are highly liquid
exchange traded equity and fixed income futures and over-the-counter foreign
exchange forward contracts. The use of derivative instruments is not believed
to materially increase the credit or market risk of the Master Trust's
investment.
The carrying amount and estimated fair value of derivative financial
instruments at December 31, 2000 and 1999 is $1,193,850,000 and
$1,192,720,000, respectively.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133).
SFAS No. 133 requires that an entity recognize all derivatives and measure
those instruments at fair value.
SFAS No. 133 is effective for fiscal years beginning after June 15, 2000.
Pursuant to SFAS No. 137, the Plan is required to adopt SFAS No. 133 effective
January 1, 2001. Management will determine the impact of SFAS No. 133 on the
Plan financial statements for 2001.
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, 2000 and 1999
The net appreciation (depreciation) of investments for the year ending December
31, 2000 is as follows (in thousands):
Small
International Company
Stock U.S. Stock Stock Income
Pool Pool Pool Fund
Investments at quoted
market value:
Short-term and fixed
income investments $ (314) -- -- 8,678
Xerox common stock -- -- -- --
Other equity investments (221,735) (251,994) 23,849 --
Investments at estimated
fair value:
Interest in real estate
trusts -- -- -- --
Other investments -- -- -- --
Total $ (222,049) (251,994) 23,849 8,678
Xerox Other Other
Stock Equity Fixed Marketplace Bond
Fund Pool Pool Window Pool Total
-- -- 868 -- 51,506 60,738
(406,949) -- -- -- -- (406,949)
-- 48,974 -- (66,301) (1,474) (468,681)
-- (1,169) -- -- -- (1,169)
-- 363,049 -- -- -- 363,049
(406,949) 410,854 858 (66,301) 50,032 (453,012)
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, 2000 and 1999
The net appreciation (depreciation) of investments for the year ending December
31, 1999 is as follows (in thousands):
Small
International Company
Stock U.S. Stock Stock Income
Pool Pool Pool Fund
Investments at quoted
market value:
Short-term and fixed
income investments $ 309 -- -- (22,348)
Xerox common stock -- -- -- --
Other equity investments 335,758 544,823 203,930 --
Investments at estimated
fair value:
Interest in real estate
trusts -- -- -- --
Other investments -- -- -- --
Total $ 336,067 544,823 203,930 (22,348)
Xerox Other Other
Stock Equity Fixed Marketplace Bond
Fund Pool Pool Window Pool Total
-- -- (20,000) -- (54,921) (96,960)
(456,299) -- -- -- -- (456,299)
-- 24,014 -- 25,002 1,938 1,135,465
-- (8,926) -- -- -- (8,926)
-- 195,225 -- -- -- 195,225
(456,299) 210,313 (20,000) 25,002 (52,983) 768,505
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.
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
(In thousands)
Description of investment
including maturity
Identity of issue, date, rate of
borrower, interest, collateral, Current
lessor,or similar party par or maturity value Cost value
Investment in Master (1) $ -- $ 214,941
Trust
*Investment in Participant Loans to Plan participants,
notes Receivable maturity dates through
5/31/12, interest rates
from 8.0% to 11.5% per annum -- $ 14,697
* Party-in-interest
(1) See note 1
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, 2000 and 1999, 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 auditing standards generally
accepted in the United States of America. 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, 2000 and 1999, and the changes in net assets available for
plan benefits for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes at December 31, 2000 is presented for the purpose
of additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
June 5, 2001
Accountants' Consent
The Board of Directors
Xerox Corporation:
We consent to incorporation by reference in the Registration Statements (No. 2-
86275 and No. 333-22037) on form S-8 of Xerox Corporation of our report dated
June 5, 2001, relating to the statement 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. as of December 31, 2000 and 1999, and the related statements
of changes in net assets available for plan benefits for the years then ended
and related schedule, which report appears in the December 31, 2000 Annual
Report on Form 11-K 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.
Rochester, New York
June 28, 2001