Xerox Investor Handout Xerox Strategy Overview / Quarter 2 2014 Results

Forward-Looking Statements

This presentation contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act

of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as

they relate to us, are intended to identify forward-looking statements. These statements reflect management’s

current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results

to differ materially. These factors include but are not limited to: changes in economic conditions, political

conditions, trade protection measures, licensing requirements and tax matters in the United States and in the

foreign countries in which we do business; changes in foreign currency exchange rates; actions of competitors; our

ability to obtain adequate pricing for our products and services and to maintain and improve cost efficiency of

operations, including savings from restructuring actions and the relocation of our service delivery centers; the risk

that multi-year contracts with governmental entities could be terminated prior to the end of the contract term; the

risk in the hiring and retention of qualified personnel; the risk that unexpected costs will be incurred; the risk that

subcontractors, software vendors and utility and network providers will not perform in a timely, quality manner; our

ability to recover capital investments; the risk that our Services business could be adversely affected if we are

unsuccessful in managing the ramp-up of new contracts; development of new products and services; our ability to

protect our intellectual property rights; our ability to expand equipment placements; the risk that individually

identifiable information of customers, clients and employees could be inadvertently disclosed or disclosed as a

result of a breach of our security; service interruptions; interest rates, cost of borrowing and access to credit

markets; reliance on third parties, including subcontractors, for manufacturing of products and provision of

services; our ability to drive the expanded use of color in printing and copying; the outcome of litigation and

regulatory proceedings to which we may be a party; and other factors that are set forth in the “Risk Factors”

section, the “Legal Proceedings” section, the “Management’s Discussion and Analysis of Financial Condition and

Results of Operations” section and other sections of our Quarterly Report on Form 10-Q for the quarter ended

March 31, 2014 and our 2013 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

The Company assumes no obligation to update any forward-looking statements as a result of new information or

future events or developments, except as required by law.

2

Xerox Direction

Annuity 85% of Total Revenue

Services 57% of Total Revenue

• Grow revenue

• Generate profits in line with industry’s best

• Strengthen and differentiate the portfolio

• Support customers and our people

• Allocate capital to enhance shareholder

returns

3

Xerox Value Proposition

Mix to

Services

~2/3rds

of revenue

by 2017

Advantaged

Verticals

>$2B Healthcare

revenue

Margin

Opportunity

Services

Margin

Expansion

Sustainable

Shareholder

Value

>50% FCF return to

shareholders

4

Differentiate and Deliver

5

Differentiate: by investing in

areas of strength and opportunity

• Advantaged verticals

• International

• Innovation

Deliver: best-in-class across the Enterprise

• Improve cost structure and delivery

• Leverage partners where appropriate

IT Outsourcing

Commercial

BPO

Document Technology & Outsourcing

Customer Care

Healthcare

BPO

Government &

Transportation

BPO

Segment Business Models

2014

Revenue Growth Low-single digit

growth

Segment Margin 9.4% - 9.8%

(low-end)

• Broad and diverse BPO portfolio

– Two-thirds of BPO portfolio with margins ≥10%

– Currently experiencing pressure from student loan and

government healthcare businesses

• Long-term contracts with high renewal rates

– Target renewal rate 85 to 90%

• Solid signings trends despite no mega deals

• Relatively modest CAPEX, around 3% of revenue

– ITO and Transportation more capital intensive

Services (~56% of Total Revenue) Document Technology (~41% of Total Revenue)

Decline in B&W high-end ~8%

of Doc Tech Revenue

Migration to Services ~(2)% pts

impact on Tech Revenue

Growth in developing markets 2%

market CAGR ‘12 to ‘16

Offset to digital transition only 2%

of pages are done on digital

high-end printing devices

Moderate macro sensitivity especially on hardware

and unbundled supplies sales

Limited macro sensitivity given largely recurring

revenue and diversity of business

Note: Expect “Other” segment revenue decline of mid-single digits

2014 guidance as communicated during Q2 earnings on July 25, 2014

Portfolio Dynamics Secular Dynamics

2014

Revenue Growth Mid-single digit

decline

Segment Margin Above 9 – 11%

target range

6

2014 Guidance

2014

Revenue Growth @ CC Low-single digit decline

Services Low-single digit growth

Document Technology Mid-single digit decline

Adjusted EPS1 (incl restructuring) $1.09 - $1.13

GAAP EPS $0.92 - $0.96

Cash From Operations $1.8 - $2.0B

CAPEX $ 0.5B

Free Cash Flow $1.3 - $1.5B

Share Repurchase >$700M

Acquisitions <$500M

Dividend ~$300M

2014 guidance as communicated during Q2 earnings on July 25, 2014

Note: Revenue growth guidance excluding potential divestitures

1Adjusted for amortization of intangible assets

Constant Currency (CC), Adjusted EPS and Free Cash Flow: see non-GAAP measures

Revenue

• Document Technology trending as expected

• Services growth anticipated to show low-single

digits growth in second half

Earnings

• Expect FY EPS of $1.09 to $1.13

• Drivers

– Margin upside in Document Technology offsets

Services pressure

– FY Tax Rate of 24% to 26%

– Fewer shares

Cash flow guidance remains $1.8 - $2.0B

7

Services

Diversified Offerings with a Deep Vertical Focus

Health Care

~19% of revenue

$40B Market

8% CAGR

Transportation/

Government ~17% of revenue

$35B Market

4% CAGR

Commercial

~37% of revenue

$420B Market

5% CAGR

Document

Outsourcing ~27% of revenue

$35B Market

6% CAGR

• MMIS

• HIX

• Provider

• Payer

• Pharma

• Analytics

• Tolling and Fare

• Parking

• Photo

enforcement

• EBT/Debit Cards

• Child Support

• IT Services

• Student Loan

• Customer Care

• HR Services

• Financial Services

• C&MS

• ITO

• Student Loan

Market leader,

industry leading

portfolio of

offerings

$2B+ Business,

among largest

players in U.S.

Healthcare

Diverse set of

offerings,

market leader in

several areas

Market leader in

Transportation

and key Gov’t

BPO offerings

• Enterprise Print

Services

• Partner Print

Services

• Next Generation

MPS

Market data based on internal market analysis; CAGR is for years 2012-2016

Percent of revenue represents percent of total Services segment revenue 9

Services – Portfolio Dynamics

Note: The graphic above is a relative representation of the Services lines of business in 2014

1Graphic not to scale for Student Loan revenue which is expected to decline by approximately 40% in 2014

Revenue Growth

Opera

ting M

arg

in %

Document Outsourcing

Commercial ITO

Transportation

Healthcare Payer/Pharma

Gov’t Healthcare

Human Resources

State Gov’t

Customer Care CMS

Retail, Litigation Learning

Healthcare Provider

Financial Services

Federal Gov’t

Student Loan1

Commercial BPO/ITO

Healthcare BPO

Government & Transportation

Document Outsourcing

0%

10

Xerox Services – Five Plank Growth and Profit Strategy

11

Portfolio Management

Improve mix to drive higher growth and margins

Cost Transformation

Margin expansion through cost competitiveness

Operational Excellence

Foundational for leverage and scale, and delivering predictable, high-quality results

Global Growth

Enhanced focus on profitable growth outside the United States

Analytics

Use the power of our big data to extract and transfer value to our customers

$2B+ Healthcare Services Business

• ITO platforms, including Pharma

• Consulting Solutions for EMR and

Financial Systems, including Buck

• Healthcare Analytics for Care and

Quality Learning Management Solutions

Provider (incl ITO &

Consulting)

12

• Medicaid Administration

• Health Insurance Exchanges

• Pharmacy Benefit Management

• Health Information Exchanges

Payer

Govt

Health

• Business Process Outsourcing

• Business Communications Services

• Call Center and Cost Recovery

Solutions

~40%

%

Total

‘14

Growth

‘14

Margin Drivers

40% Above

average

Low, with

improvement

opportunity

New offerings,

contract ramp and

platform roll-out

pressures margin

36% Above

average

In-line with

BPO

average

Strong BPO

platform base, well

positioned to expand

offerings

24% Above

average

Above

average

Higher level of

software and

consulting drive

higher margin

Emerging Opportunity Employer • Private Exchange solutions

Healthcare is a catalyst for Services revenue growth and margin expansion

Healthcare Back-up

13

Healthcare Overview

Market leader in Medicaid – as new platform matures, profitability will improve - well positioned to retain and win new business

• Recently awarded New York

• Texas Medicaid to run-off : ~$40M quarterly revenue at lower margin

Successful in five of six Health Insurance Exchanges - providing services in support of exchanges – well positioned to grow

• Working with Nevada on transition plan onto the Federal Exchange

• Q2 GHS non-cash impairment associated with HIX platform

Market leader in both Payer and Provider - well positioned to help customers adapt to market shifts

• 100% of top 20 managed U.S. healthcare plans are clients

• 1,700 hospitals served globally

• Commercial Healthcare revenue up over 10% with margin over 10% in Q2

Differentiated offering in emerging private exchange market

* Excludes private exchange revenue which is included in Xerox’s Buck consulting results

Services Margin - GHS Impairment Impact

Q2 ‘14

Services Margin excl impairment 9.2%

GHS non-cash impairment (net)1 (0.6)%

Services Margin reported 8.6%

• Two thirds of GHS revenue has operating margin >10%

As a % of

(estimated FY 2014) Revenue Services Xerox Margin

Total Healthcare* $2.3B 19% 11%

Government (GHS) $0.9B 7% 4% Pressured

Commercial (Payer & Provider)

$1.4B 12% 7% >10%

1GHS non-cash impairment (net): see non-GAAP measures

Our Services Align to Healthcare Industry Priorities

14

Shift to Individual Consumer Model

Changing Payment and Risk Model

Increasing Care and Quality

Measurement

Xerox Solutions

• Midas+ analytics platform to measure quality of provider care

• Care Quality Services (CQS) for population management

• Healthcare Consulting covering EHR, ERP, Meaningful Use,

ICD-10, etc.

• Medicaid Management Information System (MMIS) platform to

support increased eligibility

• BPO platforms to support customer enrollments

• Public Healthcare Exchange (HIX) and Private Exchanges BPO

and technology solutions

• Communications services and platforms

• Managed Care payment consulting and performance

measurement

• Recovery services and fraud, waste and abuse analytics

• Provider credit balances

• BPO platforms to reduce operational cost

Xerox Next Generation MPS What We Do Client Value Xerox Capabilities

Automate

and

Simplify Productivity Insight

Workflow Automation

Content Management

Document Analytics

Digital Alternatives

Sustainability Savings

Assess

and

Optimize

Assessment Services and Tools

Xerox ConnectKeyTM

Transition Management

Business Intelligence

Secure

and

Integrate Security Mobility

Security and Compliance

Mobile and Cloud Solutions

Print Server Mgmt. Services

Help Desk Integration

Synergies

BPO

ITO

15

Gartner Magic Quadrant for MPS, Worldwide

16

Document Technology

An Advantaged Strategy

Market leader with new

technology such as

ConnectKey and our Next

Generation MPS offering

Drive innovation with new

Workflow Automation

software solutions that

generate higher value and

margins

Leverage BPO and ITO

synergies and increase

industry vertical capabilities

Continue to Lead in Managed Print Services

Industry leading offerings

such as Xerox Partner

Print Services

Continue to invest in indirect

channels

Provide greater value for

partners

Align coverage and offerings

to developing markets

Capture the SMB Opportunity

Lead Graphic Communications Transformation

Market leader with world

class capabilities in

productivity, digital

workflow and automation

Deliver new growth via inkjet

and next generation

technologies

Realize digital transition with

expanded workflow and

services for GC customers

18

Focus on Profitability and Cash Flow

Printing Market: Focus on Attractive Segments

non-MPS

Production/GC

Total Xerox print markets in slow contraction, down low single digits

CAGR (‘12-‘16) 8% 6% 13% 9%

Office

(non-DO) Total DO

B/W Color

19

2012 Market Size $55B $35B $2B $4B

Market data based on internal analysis

Digitizing Graphic Communications

Lead In Core

Market

Winning

Cut-Sheet

Capture New

Growth

Inkjet-driven

Applications

Enable

Digital

Transition

Workflow &

Services

Superior Customer Intimacy and Value Creation

Effective Operations to Serve Our Customers

We are and will continue to be the preeminent leader in the

graphic communications industry.

20

• Of 50 trillion worldwide Production Print pages, only 2% are digital

• Investment in Inkjet provides access, over time, to 10 trillion or more

of additional eligible pages (eg collaterals, direct mail, signage)

Additional Back-up

Cash Flow Dynamics

Focused on underlying Cash Flow

improvement

- Working Capital

Opportunistic Finance Receivable

(F/R) Sales in ‘12 and ‘13

- Attractive transaction economics

- Supported capital deployment

objectives

2014 guidance does not include

Finance Receivable sales

- Reflects evolving market; less

attractive economics

22

(in billions) 2011 2012 2013 2014 Est.

Operating Cash Flow (OCF) $2.0 $2.6 $2.4 $1.8 - $2.0

Adjustments:

Cash from F/R Sales $(0.6) ~$(0.6) -

Impact from prior F/R Sales - ~$0.3 ~$0.4

Underlying OCF* $2.0 $2.0 $2.1 $2.2 - $2.4

Operating Cash Flow Trend

*Underlying OCF is reported OCF adjusted for the impacts of Finance Receivable sales

$0

$1

$2

$3

2011 2012 2013 2014E

(in b

illio

ns)

OCF Underlying OCF

Capital Allocation

2013

Dividend Acquisitions

Share Repurchase

2014 balanced to deliver shareholder returns while maintaining investment grade leverage

• Dividend: ~$300M, ability to grow modestly in line with share reduction and cash flow

• Acquisitions: up to $500M, focused on Services

• Share Repurchase: at least $700M

• Debt Reduction: ~$200M, pre-funded in Dec ‘13 $200M of the $1.1B May ‘14 note

2014 Plan

Opportunistic

Acquisitions

Share Repurchase

Dividend

2012

$276M $255M

$1.1B

Acquisitions

Dividend

Debt

Reduction

Share

Repurchase

$696M

$272M

$468M

$155M

<$500M

>$700M

~$200M

~$300M

23

~$200M

Debt Reduction

0

100

200

300

400

500

600

2011 2012 2013 2014E

DB Cash Contribution DB Stock Contribution

0

100

200

300

400

2011 2012 2013 2014E

DB Cost DB Settlement Loss Defined Contribution Cost

Pension Expectations

Expense DB Pension Funding

• Shift to defined contribution plans will reduce

burden over time

• 2013 Estimate above 10-K forecast due to higher

Settlement Losses

$494M

• Local law / regulatory requirements

• 2012 U.S. legislation lowers near term requirements

• Low interest rate environment greatly impacted 2011 and 2012

• All major defined benefit (DB) pension plans frozen

~$250M $230M

$363M $363M

~$250M

$350M

$284M $300M

$267M

~$145M

$556M

24

Xerox Performance Based Incentive System (2014)

Short Term Stock Ownership Guidelines

Annual

Cash

Pay-out

25

Long Term – Annual / 3yr Cumulative Targets

Equity performance shares

3 year vesting from grant date

*Constant Currency (CC): see non-GAAP measures

Second-Quarter 2014 Earnings Presentation Ursula Burns

Chairman & CEO

Kathy Mikells

Chief Financial Officer

July 25, 2014

Xerox Direction

Annuity 85% of Total Revenue

Services 57% of Total Revenue

• Grow revenue

• Generate profits in line with industry’s best

• Strengthen and differentiate the portfolio

• Support customers and our people

• Allocate capital to enhance shareholder

returns

27

Second-Quarter Overview

Adjusted EPS1 of 27 cents, GAAP EPS2 of 22 cents Total revenue of $5.3B, down 2% or 2.5% CC1

Services revenue up 2% or 1% CC1; margin of 8.6% • Revenue growth improving, driven by BPO

• Margin increased sequentially excluding government healthcare non-cash impairment

Document Technology revenue down 6% or 7% CC1; margin of 14.4% • Revenue in-line with expectations; challenging compare from prior year ConnectKey launch

• Profit expansion driven by continued operational discipline

Operating margin1 of 9.7%, up 30 bps YOY Cash from operations of $325M in Q2, $611M for first half • Share repurchase of $204M in Q2, $479M for first half

• Acquisitions of $227M in Q2, $281M for first half

1Adjusted EPS, Constant Currency (CC) and Operating Margin: see non-GAAP measures

2GAAP EPS from Continuing Operations 28

Earnings (in millions, except per share data) Q2 2014 B/(W) Comments

Revenue $ 5,292 $ (99) Services up 2%, Document Technology down 6%

Gross Margin 30.8% (0.7) pts

RD&E $ 142 $ 7

SAG $ 972 $ 69

SAG % of Revenue 18.4% 0.9 pts

Adjusted Operating Income1 $ 514 $ 7 Growth in Operating Profit driven by Document

Technology Operating Income % of Revenue 9.7% 0.3 pts

Adjusted Other, net1 $ 112 $ (14) Restructuring $5M higher YOY and O(I)D $9M

higher YOY

Equity Income $ 33 $ (3)

Adjusted Tax Rate1 27.7% (3.6) pts Compares to prior year tax rate of 24.1%

Adjusted Net Income – Xerox1 $ 322 $ (23)

Adjusted EPS1 $ 0.27

Flat

High-end of 25 to 27 cents guidance

Amortization of intangible assets 0.05 (0.01)

GAAP EPS2 $ 0.22

$(0.01)

1Adjusted Operating Income, Adjusted Other, net, Adjusted Tax Rate, Adjusted Net Income – Xerox and Adjusted EPS: see non-GAAP

measures 2GAAP EPS from Continuing Operations 29

Services Segment R

Revenue continues to improve

Margin flat sequentially

• Includes 60 basis point negative impact from non-

cash HIX platform impairment

Five-Plank Strategy benefits ramp second half

Signings

• BPO/ITO renewal rate of 63%, below target due to

TX Medicaid loss

• New business signings2 improved sequentially,

down 4% YOY driven by ITO

• Total signings impacted by fewer renewal decisions

Q2 % B/(W) YOY

(in millions) 2014 Act Cur CC1

Total Revenue $2,992 2% 1%

Segment Profit $257 (15)%

Segment Margin 8.6% (1.6) pts

Segment Margin Trend

Revenue Growth Trend (CC1)

Signings (TCV) Q2

Business Process Outsourcing $2.0

Document Outsourcing $0.7

Information Technology

Outsourcing $0.1

Total $2.8B

YOY Growth (25)%

TTM Growth (14)%

30

1Constant currency (CC): see non-GAAP measures

2New Business Signings = ARR (Annual Recurring Revenue) + NRR (Non-Recurring Revenue)

Note: Historical data updated to reflect Truckload Management Services divestiture and reclassification to Discontinued Operations

9.4% 10.2% 10.0% 9.6%

8.6% 8.6%

5%

7%

9%

11%

Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14

4%

6%

3%

(2)% 0% 1%

(4)%

(2)%

0%

2%

4%

6%

8%

Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14

Document Technology Segment

Segment Margin Trend

Revenue Growth Trend (CC1)

Q2 % B/(W) YOY

(in millions) 2014 Act Cur CC1

Total Revenue $2,125 (6)% (7)%

Segment Profit $306 25%

Segment Margin 14.4% 3.6 pts

Strong segment profit growth and margin

• Driven by significant cost actions, favorable mix,

pension and currency

Revenue and activity impacted by challenging

compare

• Equipment revenue drove the higher Q2 decline,

annuity improved sequentially

• First half revenue down 5%, 6% CC1

Upcoming product launches across the

portfolio benefits second half activity

Entry Installs Q2

A4 Mono MFDs (38)%

A4 Color MFDs (18)%

Color Printers 5%

Mid-Range Installs

Mid-Range B&W MFDs (21)%

Mid-Range Color MFDs (2)%

High-End Installs

High-End B&W (16)%

High-End Color2 (28)%

31

1Constant currency (CC): see non-GAAP measures 2High-end color install growth impacted by high digital front end (DFE) sales to Fuji Xerox, High-end

down 16% in Q2 excluding DFE’s.

(9)%

(5)% (5)% (6)%

(5)%

(7)%

(10)%

(8)%

(6)%

(4)%

(2)%

0%Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14

8.8% 10.8%

12.1% 11.7% 12.2%

14.4%

5%

7%

9%

11%

13%

15%

Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14

Cash Flow

32

(in millions) Q2 2014 H1 2014

Net Income $ 272 $ 558

Depreciation and amortization 376 721

Restructuring and asset impairment charges 38 65

Restructuring payments (36) (72)

Contributions to defined benefit pension plans (68) (105)

Inventories (43) (103)

Accounts receivable and Billed portion of finance receivables1 (44) (163)

Accounts payable and Accrued compensation (96) (88)

Equipment on operating leases (66) (123)

Finance receivables1 39 96

Other (47) (175)

Cash from Operations

$ 325 $ 611

Cash from Investing

$ (326) $ (446)

Cash from Financing $ (561) $ (910)

Change in Cash and Cash Equivalents (560) (757)

Ending Cash and Cash Equivalents $ 1,007 $ 1,007

Cash From Ops $325M

• First half of $611M, up $165M YOY

• Underlying Cash from Ops2 $437M

in Q2, $846M for first half

First half working capital improves

• 2014 more balanced, with continued

progress on improving cash

conversion

CAPEX $123M

Acquisitions $227M

Share Repurchase of $204M and

$73M of Common Stock Dividends

1Accounts receivable includes collections of deferred proceeds from sales of receivables and finance

receivables includes collections on beneficial interest from sales of finance receivables

2See Underlying Cash Flow slide in Appendix

Capital Structure

Core debt level managed to

maintain investment grade

Over half of Xerox debt supports

finance assets

Retired $1.1B May note and

issued $700M in senior notes

• $400M at 2.8% due 2020 and

$300M at 3.8% due 2024

Continue to expect to end 2014

with ~$7.8B of debt

33

Financing and Leverage

• Xerox’s value proposition includes leasing of Xerox equipment

• Maintain 7:1 leverage ratio of debt to equity on these finance assets

Debt and Finance Asset Trend (in millions)

Q2 2014

(in billions) Fin. Assets Debt

Financing $5.0 $ 4.4

Core - $ 3.3

Total Xerox $ 5.0 $ 7.7

0

2,000

4,000

6,000

8,000

2011 2012 2013 Q1 2014 Q2 2014

Finance Debt Core Debt Finance Assets

Capital Allocation Enhances Shareholder Returns

Repurchased $479M shares in

first half

Continue to expect to do at

least $700M FY in share

repurchase

Quarterly common dividend at

6.25 cents per share2 following

April increase

Expect ~$300M in dividend

payments Full Year

34

Share Repurchase Program

Dividend Program

1Ending fully diluted: see non-GAAP measures

2Dividend increase effective for common dividend payable on April 30, 2014

Shares Repurchased ($M)

Shares Outstanding (ending fully diluted1, in millions)

$0.17 $0.17 $0.23

$0.25

$0.10

$0.20

$0.30

2011 2012 2013 2014

Dividend per share (annualized)

1,391

1,271 1,235 1,213 1,200

1,000

1,200

1,400

2011 2012 2013 Q1 2014 Q2 2014

$701

$1,052

$696

H1

FY: >$700

$0

$300

$600

$900

$1,200

2011 2012 2013 2014

Summary

Growing operating profit with strong cash flow

• Document Technology delivering strong profitability and in-line revenue

• Improving Services revenue and margin outside government healthcare

Executing on Services profitability and growth initiatives

• Driving cost efficiencies throughout business and making progress on resolving challenges

in government healthcare

• Improved level of acquisitions

Cash flow supports capital deployment objectives

EPS guidance

• Q3 Adjusted EPS1 $0.25 - $0.27, GAAP EPS2 $0.21 - $0.23

– Includes approximately 2 cents restructuring

• FY Adjusted EPS1 $1.09 - $1.13, GAAP EPS2 $0.92 - $0.96

35

1Guidance - Adjusted EPS: see non-GAAP measures

2GAAP EPS from Continuing Operations

Appendix

Healthcare Back-up

37

Healthcare Overview

Market leader in Medicaid – as new platform matures, profitability will improve - well positioned to retain and win new business

• Recently awarded New York

• Texas Medicaid to run-off : ~$40M quarterly revenue at lower margin

Successful in five of six Health Insurance Exchanges - providing services in support of exchanges – well positioned to grow

• Working with Nevada on transition plan onto the Federal Exchange

• Q2 GHS non-cash impairment associated with HIX platform

Market leader in both Payer and Provider - well positioned to help customers adapt to market shifts

• 100% of top 20 managed U.S. healthcare plans are clients

• 1,700 hospitals served globally

• Commercial Healthcare revenue up over 10% with margin over 10% in Q2

Differentiated offering in emerging private exchange market

* Excludes private exchange revenue which is included in Xerox’s Buck consulting results

Services Margin - GHS Impairment Impact

Q2 ‘14

Services Margin excl impairment 9.2%

GHS non-cash impairment (net)1 (0.6)%

Services Margin reported 8.6%

• Two thirds of GHS revenue has operating margin >10%

As a % of

(estimated FY 2014) Revenue Services Xerox Margin

Total Healthcare* $2.3B 19% 11%

Government (GHS) $0.9B 7% 4% Pressured

Commercial (Payer & Provider)

$1.4B 12% 7% >10%

1GHS non-cash impairment (net): see non-GAAP measures

2014 Guidance

2014

Revenue Growth @ CC Low-single digit decline

Services Low-single digit growth

Document Technology Mid-single digit decline

Adjusted EPS1 (incl restructuring) $1.09 - $1.13

GAAP EPS $0.92 - $0.96

Cash From Operations $1.8 - $2.0B

CAPEX $ 0.5B

Free Cash Flow $1.3 - $1.5B

Share Repurchase >$700M

Acquisitions <$500M

Dividend ~$300M

Note: Revenue growth guidance excluding potential divestitures

1Adjusted for amortization of intangible assets

Constant Currency (CC), Adjusted EPS and Free Cash Flow: see non-GAAP measures

Revenue

• Document Technology trending as expected

• Services growth anticipated to show low-single

digits growth in second half

Earnings

• Expect FY EPS of $1.09 to $1.13

• Drivers

– Margin upside in Document Technology offsets

Services pressure

– FY Tax Rate of 24% to 26%

– Fewer shares

Cash flow guidance remains $1.8 - $2.0B

38

Revenue Trend

(in millions) FY Q1 Q2 Q3 Q4 FY Q1 Q2 YTD

Total Revenue $21,693 $5,192 $5,391 $5,250 $5,557 $21,390 $5,110 $5,292 $10,402

Growth (1)% (2)% 1% Flat (3)% (1)% (2)% (2)% (2)%

CC1 Growth Flat (2)% 1% (1)% (4)% (2)% (2)% (3)% (2)%

Annuity $18,217 $ 4,468 $4,536 $4,439 $4,588 $18,031 $4,395 $4,511 $8,906

Growth 1% (1)% 1% Flat (3)% (1)% (2)% (1)% (1)%

CC1 Growth 2% (1)% 1% (1)% (3)% (1)% (2)% (1)% (2)%

Annuity % Revenue

84% 86% 84% 85% 83% 84% 86% 85% 86%

Equipment $3,476 $724 $855 $811 $969 $3,359 $715 $781 $1,496

Growth (10)% (11)% 1% 1% (4)% (3)% (1)% (9)% (5)%

CC1 Growth (8)% (11)% 1% Flat (5)% (4)% (2)% (9)% (6)%

2013 2012

39 1Constant currency: see non-GAAP measures

2014

Note: 2012, 2013 and Q1 2014 Services revenue are revised to remove the Truckload Management Services (TMS) business revenues

that were reclassified to discontinued operations

Segment Revenue Trend

(in millions) FY Q1 Q2 Q3 Q4 FY Q1 Q2 YTD

Services $11,484 $2,909 $2,946 $2,932 $3,027 $11,814 $2,912 $2,992 $5,904

Growth 6% 4% 5% 3% (1)% 3% Flat 2% 1%

CC1 Growth 7% 4% 6% 3% (2)% 3% Flat 1% 0%

Document Technology $9,462 $2,135 $2,263 $2,159 $2,351 $8,908 $2,045 $2,125 $4,170

Growth (8)% (9)% (5)% (4)% (6)% (6)% (4)% (6)% (5)%

CC1 Growth (6)% (9)% (5)% (5)% (6)% (6)% (5)% (7)% (6)%

Other $747 $148 $182 $159 $179 $668 $153 $175 $328

Growth (7)% (14)% (5)% (6)% (16)% (11)% 3% (4)% (1)%

CC1 Growth (6)% (14)% (5)% (8)% (17)% (11)% 3% (4)% (1)%

2013 2012

40

2014

1Constant currency: see non-GAAP measures

Note: 2012, 2013 and Q1 2014 Services revenue are revised to remove the Truckload Management Services (TMS) business revenues

that were reclassified to discontinued operations

Metrics Reference

Entry Installs H1

A4 Mono MFDs (23)%

A4 Color MFDs (1)%

Color Printers 3%

Mid-Range Installs

Mid-Range B&W MFDs (18)%

Mid-Range Color MFDs 2%

High-End Installs

High-End B&W (15)%

High-End Color1 (7)%

H1

Business Process Outsourcing $4.1

Document Outsourcing $1.3

Information Technology Outsourcing $0.3

Total $5.7B

Signings Growth YOY (22)%

Signings Growth TTM (14)%

H1

Digital MIF 2%

Color MIF 13%

Digital Pages (3)%

Color Pages 6%

Color Revenue (CC2) (1)%

H1

Renewal Rate (BPO and ITO) 74%

Signings and Renewal Rate Install, MIF and Page Growth

Installs, color revenue, pages and MIF include both the Document Technology and Services segments. Color revenue and color pages reflect

revenue and pages from color capable devices. 1High-end color install growth impacted by high digital front end (DFE) sales to Fuji Xerox, High-end up 7% YTD excluding DFE’s. 41 2Constant currency: see non-GAAP measures

Underlying Cash Flow

42

1Represents cash that would have been collected if we had not sold finance receivables. Net of collections on beneficial interest.

2Underlying OCF is reported OCF adjusted for the impacts of Finance Receivable sales: see non-GAAP measures

Estimated

(in millions) Q1 2014 Q2 2014 FY 2014 Q1 2013 Q2 2013 FY 2013

Operating Cash Flow (OCF) $286 $325 $611 $1.8 - $2.0B ($87) $533 $446 $2.4B

Adjustments:

Cash From F/R Sales - - - - - - - $(0.6)B

Impact from prior F/R Sales1 $123 $112 $235 $0.4B $89 $58 $147 $0.3B

Underlying OCF2$409 $437 $846 $2.2 - $2.4B $2 $591 $593 $2.1B

June YTD

2014

June YTD

2013

Discontinued Operations Summary

43

Note: 2013 Discontinued Operations includes the results related to our North American and

European Paper businesses which we sold in 2013. In addition, 2013 and 2014 Discontinued

Operations includes the results related to our Truckload Management Services business which

we sold in Q2 of 2014.

(in millions) 2014 2013 2014 2013

Revenues 7$ 144$ 17$ 308$

Income from operations -$ 2$ -$ 7$

Loss on disposal (2) (23) - (23)

Net loss before income taxes (2) (21) - (16)

Income tax expense 2 2 2 4

Loss from discontinued operations,

net of tax (4)$ (23)$ (2)$ (20)$

Diluted earnings per share from

discontinued operations -$ (0.02)$ -$ (0.02)$

Total diluted earnings per share,

inclusive of discontinued operations 0.22$ 0.21$ 0.45$ 0.44$

Three Months Ended Six Months Ended

June 30, June 30,

Discontinued Operations Restatement Summary

44

2013 2014

(in millions) Q1 Q2 Q3 Q4 FY Q1

Services Segment Revenue 2,909$ 2,946$ 2,932$ 3,027$ 11,814$ 2,912$

Total Performance Revenue 5,192$ 5,391$ 5,250$ 5,557$ 21,390$ 5,110$

Services Segment Profit 272$ 301$ 292$ 290$ 1,155$ 250$

Total Segment Profit 389$ 484$ 498$ 528$ 1,899$ 449$

Services Segment Margin 9.4% 10.2% 10.0% 9.6% 9.8% 8.6%

Total Segment Margin 7.5% 9.0% 9.5% 9.5% 8.9% 8.8%

Detailed above is the restatement for Services Segment and Total Segment results by quarter for 2014 and 2013

related to the sale of our Truckload Management Services (TMS) business in May 2014. The entire restated

income statement for these periods can be found in the financial model included on our website at

http://news.xerox.com/investors/materials.

Non-GAAP Measures

46

“Adjusted Earnings Measures”: To better understand the trends in our business, we believe it is necessary to adjust the following

amounts determined in accordance with GAAP to exclude the effects of certain items as well as their related income tax effects.

• Net income and Earnings per share (“EPS”)

• Effective tax rate

In 2014 and 2013, we adjusted for the amortization of intangible assets. The amortization of intangible assets is driven by our acquisition

activity which can vary in size, nature and timing as compared to other companies within our industry and from period to period.

Accordingly, due to the incomparability of acquisition activity among companies and from period to period, we believe exclusion of the

amortization associated with intangible assets acquired through our acquisitions allows investors to better compare and understand our

results. The use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future

period revenues as well. Amortization of intangible assets will recur in future periods.

We also calculate and utilize an Operating income and margin earnings measure by adjusting our pre-tax income and margin amounts to

exclude certain items. In addition to the amortization of intangible assets, operating income and margin also exclude Other expenses, net

as well as Restructuring and asset impairment charges. Other expenses, net is primarily comprised of non-financing interest expense and

also includes certain other non-operating costs and expenses. Restructuring and asset impairment charges consist of costs primarily

related to severance and benefits for employees pursuant to formal restructuring and workforce reduction plans. Such charges are

expected to yield future benefits and savings with respect to our operational performance. We exclude these amounts in order to evaluate

our current and past operating performance and to better understand the expected future trends in our business.

“Constant Currency”: To better understand trends in our business, we believe that it is helpful to adjust revenue to exclude the impact

of changes in the translation of foreign currencies into U.S. dollars. We refer to this adjusted revenue as “constant currency.” Currencies

for developing market countries (Latin America, Brazil, Middle East, India, Eurasia and Central-Eastern Europe) that we operate in are

reported at actual exchange rates for both actual and constant revenue growth rates because (1) these countries historically have had

volatile currency and inflationary environments and (2) our subsidiaries in these countries have historically taken pricing actions to mitigate

the impact of inflation and devaluation. Management believes the constant currency measure provides investors an additional perspective

on revenue trends. Currency impact can be determined as the difference between actual growth rates and constant currency growth

rates.

Non-GAAP Financial Measures

47

“Services Margin excluding impairment”: In the second quarter 2014, we present the Services segment margin excluding the negative

impact from the non-cash HIX platform impairment charge of 0.6%. The non-cash HIX platform impairment charge was a significant

discrete and unusual charge in the second quarter 2014 that was primarily related to a HIX contract cancellation in Nevada. We believe

exclusion of this item allows investors to better understand and analyze the Services segment results for the period as compared to prior

periods as well as the expected trends in this segment. A reconciliation of this non-GAAP financial measure and the most directly

comparable measure calculated and presented in accordance with GAAP is set forth in the slide entitled “Healthcare Back-up”.

“Free Cash Flow”: To better understand the trends in our business, we believe that it is helpful to adjust cash flows from operations to

exclude amounts for capital expenditures including internal use software. Management believes this measure gives investors an additional

perspective on cash flow from operating activities in excess of amounts required for reinvestment. It provides a measure of our ability to

fund acquisitions, dividends and share repurchase. It also is used to measure our yield on market capitalization. A reconciliation of this

non-GAAP financial measure and the most directly comparable measure calculated and presented in accordance with GAAP is set forth in

the slide entitled “2014 Guidance”.

“Underlying Cash Flow”: To better understand the trends in our business, we believe that it is helpful to adjust cash flows from

operations for the cash flow impacts from our sales of finance receivables. The sale of finance receivables has a significant impact on

operating cash flows in the period of sale as well as in subsequent periods due to the amounts sold as well as the long term nature of

these receivables. In addition to providing a better understanding of the underlying trends in cash flows from operations, management

believes this measure gives investors an additional perspective on comparing and analyzing the year-over-year changes in our cash flows

as well as the impacts of these sales on cash flows in the period. A reconciliation of this non-GAAP financial measure and the most directly

comparable measure calculated and presented in accordance with GAAP is set forth in the slide entitled “Underlying Cash Flows”.

Management believes that these non-GAAP financial measures provide an additional means of analyzing the current periods’ results

against the corresponding prior periods’ results. However, these non-GAAP financial measures should be viewed in addition to, and not

as a substitute for, the Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant

to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our

consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP

financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP

measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our

executives is based in part on the performance of our business based on these non-GAAP measures.

Unless otherwise noted, reconciliations of these non-GAAP financial measures and the most directly comparable measures calculated and

presented in accordance with GAAP are set forth on the following slides.

Non-GAAP Financial Measures

48

Q2 GAAP EPS to Adjusted EPS Track

(in millions; except per share amounts) Net Income EPS Net Income EPS

Reported(1)270$ 0.22$ 294$ 0.23$

Adjustments:

Amortization of intangible assets 52 0.05 51 0.04

Adjusted 322$ 0.27$ 345$ 0.27$

Weighted average shares for adjusted EPS(2)1,208 1,287

Fully diluted shares at end of period(3)1,200

__________

(1) Net Income and EPS from continuing operations attributable to Xerox.

(2) Average shares for the calculation of adjusted EPS include 27 million of shares associated with the Series A

convertib le preferred stock and therefore the related quarterly dividend was excluded.

(3) Represents common shares outstanding at June 30, 2014 as well as shares associated with our Series A

convertib le preferred stock plus dilutive potential common shares as used for the calculation of diluted earnings per

share in the second quarter 2014.

Three Months Ended Three Months Ended

June 30, 2014 June 30, 2013

49

GAAP EPS to Adjusted EPS Guidance Track

Q3 2014 FY 2014

GAAP EPS from Continuing Operations $0.21 - $0.23 $0.92 - $0.96

Adjustments:

Amortization of intangible assets 0.04 0.17

Adjusted EPS $0.25 - $0.27 $1.09 - $1.13

Note: GAAP and Adjusted EPS guidance includes anticipated restructuring

Earnings Per Share Guidance

50

Q2 Adjusted Operating Income/Margin

(in millions) Profit Revenue Margin Profit Revenue Margin

Reported pre-tax income(1) 324$ 5,292$ 6.1% 332$ 5,391$ 6.2%

Adjustments:

Amortization of intangible assets 84 83

Xerox restructuring charge 38 33

Other expenses, net 68 59

Adjusted Operating 514$ 5,292$ 9.7% 507$ 5,391$ 9.4%

_______________

(1) Profit and Revenue from continuing operations attributable to Xerox.

June 30, 2014 June 30, 2013

Three Months Ended Three Months Ended

51

Q2 Adjusted Other, net

Three Months Ended Three Months Ended

(in millions) June 30, 2014 June 30, 2013

Other expenses, net - Reported 68$ 59$

Adjustments:

Xerox restructuring charge 38 33

Net income attributable to noncontrolling interests 6 6

Other expenses, net - Adjusted 112$ 98$

52

Q2 Adjusted Effective Tax Rate

(in millions)

Pre-Tax

Income

Income

Tax

Expense

Effective

Tax

Rate

Pre-Tax

Income

Income

Tax

Expense

Effective

Tax

Rate

Reported(1) 324$ 81$ 25.0% 332$ 68$ 20.5%

Adjustments:

Amortization of intangible assets 84 32 83 32

Adjusted 408$ 113$ 27.7% 415$ 100$ 24.1%

__________

Three Months Ended Three Months Ended

June 30, 2014 June 30, 2013

(1) Pre-Tax Income and Income Tax Expense from continuing operations attributable to Xerox.

53

Q2 Services Revenue Breakdown

Note: 2013 Business Process Outsourcing (BPO) and Information Technology Outsourcing (ITO) revenues have

been revised to conform to the 2014 presentation of revenues.

(in millions) 2014 2013 % Change

Business Processing Outsourcing 1,791$ 1,773$ 1%

Document Outsourcing 860 832 3%

Information Technology Outsourcing 389 385 1%

Less: Intra-Segment Eliminations (48) (44) 9%

Total Revenue - Services 2,992$ 2,946$ 2%

Three Months Ended June 30,