SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
June 25, 2003
XEROX CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-4471 16-0468020
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
800 Long Ridge Road
P. O. Box 1600
Stamford, Connecticut 06904-1600
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:
(203) 968-3000
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
Registrant completed today a $3.6 billion recapitalization that includes
public offerings of common stock, 3-year mandatory convertible preferred stock
and 7-year and 10-year senior unsecured notes as well as a new $1 billion
credit facility.
The credit facility consists of a $700 million revolving facility and a $300
million term loan, both maturing in September 2008. Registrant does not
currently intend to draw the revolver on an ongoing basis.
Registrant used net proceeds from the public offerings and the new credit
facility as well as a portion of its current cash balance to prepay and
terminate, effective today, the $3.1 billion outstanding under its existing
bank facility.
The underwriters exercised their 15 percent over-allotment option on the
common stock and preferred stock offerings. As a result, Registrant raised
$472 million through the sale of 46 million shares of common stock at $10.25
per share and $920 million through the sale of 9.2 million shares of 3-year
mandatory convertible preferred stock at $100 per share. This preferred stock
has an annual dividend yield of $6.25 per share and a conversion price of up
to $12.30.
"The successful completion of this financing is evidence of investors'
confidence in Xerox's solid operations and effective strategy to grow the
business through the industry's broadest portfolio of services and systems,"
said Lawrence A. Zimmerman, Registrant's senior vice president and chief
financial officer. "Demand for the offerings exceeded initial expectations,
further strengthening Xerox's balance sheet and providing even more financial
and operating flexibility to build on Xerox's growth initiatives."
The recapitalization also included the sale of $700 million of 7-year senior
unsecured notes due 2010 and bearing interest at 7 1/8 percent as well as $550
million of 10-year senior unsecured notes due 2013 and bearing interest at
7 5/8 percent.
In addition, Registrant's agreement with Citigroup, Deutsche Bank, Goldman
Sachs, JPMorgan, Merrill Lynch and UBS for the new $1 billion credit facility
became effective today. Registrant noted that the covenants under the new
credit agreement reflect Registrant's improved financial position. For
example, there are no mandatory prepayments and the interest rate decreased
about 2 percentage points under the new credit facility. It now ranges from
1.75 percent to 3 percent over LIBOR with an initial rate of 2.75 percent over
LIBOR.
Registrant said it expects that its reduced interest expense will largely
offset the dilutive impact of the additional shares in the second half of this
year and in 2004.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K may contain certain statements that are not
historical fact and which are deemed to be forward-looking. These forward-
looking statements and other information are based on our beliefs as well as
assumptions made by us using information currently available.
The words "anticipate," "believe," "estimate," "expect," "intend," "will," and
similar expressions, as they relate to us, are intended to identify forward-
looking statements. Such statements reflect our current views with respect to
future events and are subject to certain risks, uncertainties and assumptions.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated, intended or
expected. We do not intend to update these forward-looking statements.
We are making investors aware that such forward-looking statements, because
they relate to future events, are by their very nature subject to many
important factors which could cause actual results to differ materially from
those contained in the forward-looking statements. Such events and factors
include, but are not limited to, those listed under "Forward Looking
Statements" in our Annual Report on Form 10-K for the year ended December 31,
2002, our Quarterly Report on Form 10-Q for the three months ended March 31,
2003, our Current Report on Form 8-K dated April 30, 2003 and under similarly
captioned sections in future filings that we make with the SEC under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly authorized this report to be signed on its behalf by the
undersigned duly authorized.
XEROX CORPORATION
/s/ Martin S. Wagner
___________________________
By: Martin S. Wagner
Dated: June 25, 2003 Assistant Secretary
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