2012 Report on Global Citizenship

CEO Letter

Dear Stakeholders:

It's my privilege to introduce you to the 2012 Xerox Global Citizenship Report. This year's edition has a new look and feel, designed to make it easier for you to find the information you're seeking and to take a deep dive into areas of special interest to you. You also get to decide how much of the report you'd like to print – if any. In fact, we've printed zero copies ourselves, leaving that entirely up to you and reducing paper waste in the process.

Come to think of it, this report is a metaphor of our broader approach to business, which can be summarized in two synergistic concepts - simplification and sustainability. They are at the heart of just about everything we do and they have very long and strong roots in our company and culture. The man who invented the first plain-paper copying process - which came to be known as xerography - had a very clear goal in mind: "to make office work a little more productive and a little less tedious." That simple aspiration led to the founding of Xerox and the creation of an entirely new industry.

The man was Chester Carlson and his genius was to make the complex simple. Under the hood of every copier was an amazingly intricate process that involved sophisticated electrical, photographic, printing and paper handling technologies. The customer was shielded from all that – just step up to the copier, put the original in, select the number of copies desired and push a button. Simple.

We have never strayed from that notion, which has led us on a fascinating journey constantly seeking ways to help our customers simplify the way they do business and contribute to a more sustainable world. Far from the copier company of old, Xerox now provides the world-class document technology you would expect, but also a deep and broad array of business process and IT outsourcing services you might not expect.

We are now a major player in designing and managing a diverse portfolio of services that includes cloud-based IT solutions, automated highway toll systems, management of electronic medical records, web and phone-based customer call centers, e-discovery for law firms and much more. Today's Xerox is the world's leading enterprise for business process and document management. In fact, more than half of our annual revenue of close to $23 billion comes from services.

Yet, as the saying goes, the more things change, the more they remain the same. Our half-century journey from the introduction of the first plain-paper copier to the Xerox of today has been guided by one overriding passion - to help our customers be more successful. Here is what we tell our customers today: you do what you're really good at, like making the best smartphone in the world or providing the best banking experience possible and we will take care of the "stuff" that goes on behind the scenes to make your enterprise run smoothly.

That philosophy has led us to an intriguing discovery – by focusing on simplicity you are also improving sustainability. Simplicity is not about scaling back or dumbing down. It's about taking the "excess" out of the process, stripping down the non-value steps that creep in and applying technology and innovation smartly and strategically. When you do that, you save not only time and money, you save precious resources and eliminate waste. Sustainability.

Let's face it, if you're focused on creating and marketing the best prescription drugs in the world, your accounts receivable and printing operations are not your first priorities. You need them to operate efficiently, but it's not where you want to expend your energy. We do. And because we provide back-office services for thousands of clients around the world, we take what we learn from one and apply it to many. That cycle of continuous improvement and innovation creates value for our customers and sustainability for their enterprises.

Take Lima, Peru. They have a population of 9 million in a city of small and narrow streets. Theirs is one of the most chaotic traffic flows in the world. But that's changing. We've helped them build a series of bus routes with dedicated traffic lanes and a smartcard ticketing system that keeps buses and passengers moving. That cuts down on commuting times by as much as two-thirds, reducing fuel consumption and carbon emissions. Lima is the beneficiary of what we've learned in doing similar work in other places from Los Angeles to Norway. And what we've learned in Lima will now be applied in other cities – maybe even yours. Other examples abound:

• We're the world's leader in managed print services, which routinely cuts the cost of printing in companies and governments by 30 percent. It also significantly reduces the use of paper and energy.
• When one of the largest telecommunications providers needed bilingual customer care support in a hurry, it turned to Xerox. We used one of our existing centers in Mexico, ramped new hiring and were up and running in 39 days, avoiding the negative sustainability impacts that would come with building a new center. And, by the way, we exceeded quality targets.
• The last thing you would want firefighters engaged in is paper work. It's a necessary distraction from their real work. So we created a cloud-based software solution that's being used in 1,400 firehouses across the country to make administrative work simpler and cut down on paper use as well.

You get the point. We bring innovation to our clients management and more often than not also contribute to their sustainability efforts as well. It's what we do really well so that our customers can focus on what they do really well.

That may well be the single most important thing we do to be a responsible citizen of our world, but it's hardly the only thing. In this report, in addition to a section on Sustaining Business, you will find four other content areas:

• In Evolving the Workplace, you will learn about our continuing efforts to be recognized as one of the most diverse workforces, top to bottom, in the world, and why we are also viewed as one of the best places to work, to grow and to contribute. One example: Xerox achieved a 100 percent rating on the 2011 Corporate Equality Index and Best Places to Work survey administered by the Human Rights Campaign Foundation.
• In Serving Customers, you will find information regarding our passion for customers and how we engage with them in our research and innovation in ways that help them better serve their clients and our society. One example: working with hospitals to help them mine patient data in real time – vital signs, medications, lab reports and so on – to improve care, reduce infections and avoid problems.
• In Caring for Communities, you will get an overview of how we invest money and talent in a wide variety of organizations to strengthen the communities in which we work and live. One example: Eleven Xerox employees received full-paid leaves of absence in 2011 to volunteer for non-profit agencies in their local communities, bringing their business insights and, often, their Xerox Lean Six Sigma training to improve the efficiency and effectiveness of the organizations they serve.
• In Preserving the Planet, you will see why we have developed a reputation as a company determined to minimize our impact on the environment through more creative ways to reuse, reduce and recycle what we make. One example: For the fifth consecutive year, Xerox has retained its position on the FTSE4Good rating scheme by meeting the criteria for environmental actions, corporate responsibility, social and stakeholder engagement and human rights.

We are proud of the progress we have made and the reputation we have earned – proud but hardly complacent. There is so much more that we can do to be better. We don't shrink from these challenges; we welcome them. All of us at Xerox are determined to build not just a bigger company but a better company that serves all its stakeholders in equal measure – the shareholders who invest in us; the customers who trust us to make them successful; the employees who personify our belief that good financial results and good citizenship are synergistic; the communities in which we live and work that deserve our engagement; and, ultimately, the planet for which we all have an obligation to preserve and sustain.

I'd welcome your thoughts – on what we're doing right, on what we can improve and how we can work together.

Ursula M. Burns
Chairman and Chief Executive Officer