Xerox pulled more than $3 billion forward to hide a decline.
From 1997 to 2000 Xerox accelerated more than $3 billion in equipment revenue. The restatement showed revenue had fallen from about $19.6 billion to $18.7 billion. Report a decline early.
Transcript
More than $3 billion. That is how much equipment revenue Xerox pulled forward to hide a fading copier business.
Xerox leased its machines, so it could choose how much of a multi-year lease to book today. From 1997 through 2000, it booked too much, too soon, and overstated pretax earnings by roughly $1.5 billion.
The restatement showed it. Xerox's revenue had fallen, from about $19.6 billion in 1999 to $18.7 billion in 2000.
On April 11, 2002, Xerox settled with the SEC: a $10 million penalty and four years of restated financials.
The alternative was to show investors a copier business in retreat, and fund a second act. If your core is shrinking, report it early. Time spent hiding a decline is time not spent fixing it.
The records behind this video
Every figure in the video comes from this Decision Record, each with its sources.
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