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IKON OFFICE SOLUTIONS, INC.
FORM 10-K
September 30, 2000
As filed with the Securities and Exchange Commission on December 28, 2000
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X]Annual report pursuant in Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended September 30, 2000 or
[_]Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from to .
Commission file number 1-5964
IKON OFFICE SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
OHIO 23-0334400
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P.O. Box 834, Valley Forge, 19482
Pennsylvania (Zip Code)
(Address of principal executive
offices)
Registrant's telephone number, including area code: (610) 296-8000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of Class on which registered
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Common Stock, no par value New York Stock Exchange
(with Preferred Share Purchase Rights)
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 1, 2000, was approximately $127,617,883 based upon
the closing sales price on the New York Stock Exchange Composite Tape of
$2.9375 per common share on December 1, 2000. For purposes of the foregoing
sentence only, all directors and executive officers of the registrant were
assumed to be affiliates.
The number of shares of common stock, no par value, of the registrant
outstanding as of December 22, 2000 was 141,698,352.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II--Portions of the Registrant's Annual Report to Shareholders
for fiscal year ended September 30, 2000
Part III--Portions of the Registrant's Proxy Statement for the 2001 Annual
Meeting of Shareholders
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FORWARD-LOOKING INFORMATION
IKON Office Solutions, Inc. (the "Registrant," "IKON" or the "Company") may
from time to time provide information, whether verbally or in writing,
including certain statements included in or incorporated by reference in this
Form 10-K, which constitute "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995 ("Litigation Reform
Act"). These forward-looking statements include, but are not limited to,
statements regarding the following (and certain matters discussed in greater
detail herein): growth opportunities and increasing market share, productivity
and infrastructure initiatives; earnings, revenue, cash flow, margin, and
cost-savings projections; the effect of competitive pressures on equipment
sales; expected savings and lower fixed costs from the restructuring programs
and productivity and infrastructure initiatives; developing and expanding
strategic alliances and partnerships; the impact of e-commerce and e-
procurement initiatives; anticipated growth rates in the digital and color
equipment and outsourcing industries; the effect of foreign exchange risk; the
reorganization of the Company's business segments and the anticipated benefits
of operational synergies related thereto; and the Company's ability to finance
its current operations and its growth initiatives. Although IKON believes the
expectations contained in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove correct.
The words "anticipate," "believe," "estimate," "expect," "intend," "will,"
and similar expressions, as they relate to the Company or the Company's
management, are intended to identify forward-looking statements. Such
statements reflect the current views of the Registrant 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, expected or intended.
The Registrant does not intend to update these forward-looking statements.
In accordance with the provisions of the Litigation Reform Act, the Company
is 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. These uncertainties and risks
include, but are not limited to, the following (some of which are explained in
greater detail below): conducting operations in a competitive environment and
a changing industry (which includes technical services and products that are
relatively new to the industry and to the Company); delays, difficulties,
management transitions and employment issues associated with consolidations
and/or changes in business operations; managing the integration of acquired
businesses; existing and future vendor relationships; risks relating to
currency exchange; economic, legal and political issues associated with
international operations; the Company's ability to access capital and meet its
debt service requirements (including sensitivity to fluctuation in interest
rates); and general economic conditions.
Competition. The Registrant operates in a highly competitive environment,
in which technological advances and demands of customers change rapidly.
There are a number of competitors of the Company with significant financial
resources to provide similar products and services in each of the markets
served by the Registrant, some of whom operate on a global basis. The
Registrant's success in its future performance is largely dependent upon
its ability to compete successfully in its currently-served markets and to
expand into additional product and service segments. The intense
competition inherent in the Registrant's industry could also result in
additional pressure on pricing and the retention of customers which could
negatively affect the Registrant's results of operations.
Pricing. The Registrant's ability to succeed is dependent upon its ability
to obtain adequate pricing for its products and services. Depending on
competitive market factors, future prices the Registrant can obtain for its
products and services may vary from historical levels.
Transition to Digital. The analog segment of the office equipment market
continues to decline, as the market transitions to digital technology. Some
of the new digital products placed by the Registrant replace or compete
with the current analog products placed by the Registrant. Changes in the
mix of products from analog to digital, and the acceleration of that
change, as well as competitive developments, could cause actual results to
vary from those expected.
2
Vendor Relationships. The Registrant is not a manufacturer of any of the
equipment it sells. The cessation or deterioration of any significant
vendor relationship that may cause the Company to be unable to distribute
equipment, including digital products and high-volume or color equipment,
parts and supplies, would cause actual results to differ materially from
those expected.
Financing Business. A significant portion of the Registrant's profits are
derived from the financing of equipment provided to its customers. The
Registrant's ability to provide such financing at competitive rates and
realize profitable margins is highly dependent upon its own costs of
borrowing. Significant changes in credit ratings could reduce our access to
certain credit markets. The Registrant's credit ratings have declined in
recent years; however, the effects of such decline have been mitigated by
the Company's utilization of asset securitizations as a funding source.
Asset securitizations continue to be a viable funding source for the
Company, and our present credit ratings permit us ready access to the
credit markets. There is no assurance that these credit ratings can be
maintained and/or ready access to the credit markets can be assured.
Productivity Initiatives. The Registrant's ability to improve its profit
margins is largely dependent on its ability to maintain an efficient, cost-
effective operation. Under certain productivity initiatives (sometimes
referred to as the "Competitiveness and Productivity Project"), various
productivity improvements are being implemented. The Registrant's ability
to improve its profit margins through the implementation of these
productivity initiatives is dependent upon certain factors outside the
control of the Registrant and therefore could cause actual results to
differ materially from those anticipated.
International Operations. The Registrant's future revenue, cost and profit
results could be affected by a number of factors, including changes in
foreign currency exchange rates, changes in economic conditions from
country to country, changes in a country's political condition, trade
protection measures, licensing and other legal requirements and local tax
issues.
Restructuring. In the first and fourth quarters of fiscal 2000, the Company
announced certain restructuring charges totaling approximately $105
million. The restructuring charges are to consolidate or dispose of certain
underperforming and non-core locations and implement productivity
enhancements through consolidation/centralization of activities in
inventory management, purchasing, finance/accounting and other
administrative functions and consolidate or eliminate unproductive real
estate facilities. These efforts are aimed at improving our performance and
efficiency. The failure to execute these actions effectively would cause
actual results to differ materially from those anticipated.
New Product Offerings. The process of developing new high technology
products and solutions is inherently complex and uncertain. It requires
accurate anticipation of customers' changing needs and emerging
technological trends. The Registrant must make long-term investments and
commit significant resources before knowing whether these investments will
eventually result in products that achieve customer acceptance and generate
the revenues required to provide anticipated returns from these
investments.
Integration of Acquired Companies. The Company's success is dependent upon
its ability to integrate acquired companies and their operations which
include companies with technical services and products that are relatively
new to the Company and companies outside the United States that present
additional risks relating to international operations. There can be no
assurance the Company will be successful in managing the integration of
acquired companies and their operations.
3
PART I
Item 1. Business.
General
IKON Office Solutions, Inc. was incorporated in Ohio in 1952 and is the
successor to a business incorporated in 1928. References herein to "we," "us"
or "our" refers to IKON and consolidated subsidiaries unless the context
specifically requires otherwise. The address of the Company's principal
executive offices is 70 Valley Stream Parkway, Malvern, Pennsylvania 19355
(telephone number: (610) 296-8000).
IKON is a leading provider of products and services that help businesses
communicate. IKON provides customers with total business solutions for every
office, production and outsourcing need, including copiers and printers, color
solutions, distributed printing, facilities management, imaging and legal
outsourcing solutions, as well as network design and consulting, e-business
development, telecommunications services and technology training.
IKON operates approximately 900 locations in the United States, Canada,
Mexico, the United Kingdom, France, Germany, Ireland and Denmark. Our
locations in the United States, Canada and Mexico comprise the largest
independent distribution network of office equipment in North America.
IKON distributes the products of numerous manufacturers, including Canon,
Ricoh, Hewlett-Packard and Oce. IKON also distributes products from Microsoft,
IBM, Lotus, Compaq, Novell, Cisco and Citrix. Customers include large and
small businesses, professional firms and government agencies.
In fiscal 2000, IKON generated approximately $5.4 billion in revenues, and
generated net income of $29.1 million, or $.20 per share, including
restructuring charges and special gains. Excluding these charges and gains,
the Company generated net income of $93.1 million, or $.63 per share. (See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Notes 2, 6, 15 and 16 appended thereto).
Operating Segments
IKON has adopted Statement of Financial Accounting Standards ("SFAS") No.
131, "Disclosures About Segments Of An Enterprise And Related Information",
which requires segment data to be measured and analyzed on a basis that is
consistent with how business activities are reported internally to management.
Revenue and segment profit information about the Company's operating
segments in accordance with SFAS No. 131 is presented on page 34 of the 2000
Annual Report to Shareholders. Additional financial data and commentary on
recent financial results for operating segments are provided on pages 12
through 14 of that Report and in Note 14 to the consolidated financial
statements (included on pages 33 through 35 of the 2000 Annual Report to
Shareholders).
Operating businesses that are reported as segments under SFAS No. 131
include IKON North America and IKON Europe. The remaining businesses do not
meet the definition of a reportable segment and have been aggregated into
other operations. A summary description of each of the Company's operating
segments follows.
IKON NORTH AMERICA. IKON North America ("INA") provides copiers, printers,
distributed printing, and other office equipment and services, as well as
facilities management throughout North America. INA also includes our captive
finance subsidiaries in North America. To assure we can deliver and maintain
these capabilities to best meet customers' needs, we offer competitive
pricing, factory-certified technicians for all equipment, and through our
captive finance subsidiaries, flexible financing and lease programs.
Facilities management handles the outsourcing of our customers' mailrooms,
copy centers and general administrative facilities and document production and
overflow services. Document services focuses on distributed printing and
electronic file conversion.
4
IKON EUROPE. IKON Europe ("IE") provides customers with total office
solutions, including copiers and printer systems, computer networking,
distributed printing, facilities management, hardware and software product
interfaces and electronic file conversion throughout Europe. IE also includes
our captive finance subsidiaries in Europe. Facilities management services
handles the outsourcing of our customers' mailrooms, copy centers and general
administrative facilities and document production and overflow services.
OTHER. IKON's other businesses include Business Imaging Services ("BIS") and
Technology Services in North America. BIS focuses on electronic file
conversion. Technology Services provides design, planning and support services
for network platforms and IT integration projects, technology training,
telecommunications services and e-business development.
As a result of the dynamics of our business, we are reviewing our operating
structure which will result in adjustments to our segment discussion for
fiscal year 2001. We anticipate the following change: As of October 1, 2000,
Technology Services Network Integration (included in other in fiscal 2000)
will be included in INA. This is also a result of the restructuring programs
we announced during fiscal 2000 and reflects our efforts to provide total
integrated office solutions in North America as are already provided in
Europe.
Board Changes
During fiscal 2000, James J. Forese, President and Chief Executive Officer,
was elected to the additional post of Chairman of the Board of Directors.
Richard A. Jalkut, who had served as Non-Executive Chairman of the Board of
Directors, since July 1998, was named Lead Independent Director by the Board
of Directors. In addition, the Company's Board of Directors elected as its
additional members Kurt Landgraf, Chairman of Educational Testing Service, and
Marilyn Ware, Chairman of the Board of Directors of American Water Works
Company, Inc.
Transition to Digital Products
During fiscal 2000, we continued to experience a rapid transition from
analog to digital products (See "Management's Discussion and Analysis of
Financial Condition and Results of Operations"). We believe that the office
equipment market will continue to change with the increasing acceptance of
digital technology. Digital products have the ability to communicate with
other office equipment and often eliminate the distinction between traditional
photocopiers, facsimile equipment and printers. Digital multifunctional office
equipment can offer customers the ability to print, copy, scan and fax all
from one machine.
One of our goals is to convert our customer base to digital products. This
part of our strategy is important to our long-term success because conversion
provides the ongoing revenue benefit of our service relationship and permits
us to develop customer relationships through which we can sell additional
products and services.
Operations Integration
In fiscal 2000, IKON continued to integrate its business operations.
Business Document Services and Legal Document Services, both formerly part of
IKON Document Services, have been aligned with INA.
In addition, IKON has reallocated the capabilities within its Technology
Services group. As of October 1, 2000, IKON has merged the network integration
capabilities of its Technology Services group into INA. In addition, we have
established as separate units: E-business development, which provides leading-
edge Web-based applications for customers' e-business strategies and will
operate under the new name, Sysinct; Education, which will expand its
instructor-led training and develop innovative, Internet-based training; and
Telecommunications, which addresses clients' total telecommunications needs.
5
The integration supports INA's shift toward providing higher-end, networked
digital equipment and related services, and will promote the Company's ability
to deliver integrated solutions to meet the increasingly sophisticated
business communication needs of its extensive customer base.
By realigning these business divisions, we believe we can acquire a greater
understanding of our customers needs and are better positioned to design
customized solutions for their business challenges. This integration of
business divisions provides INA with a broad portfolio of products and
services, which permit it to provide solutions on-site and through outsourcing
to meet the needs of a range of customers, from the general office environment
to the high-volume demands of the production environment.
In addition to the integration of our businesses, in a further effort to
streamline our operations and increase our profitability, during the first
quarter and fourth quarter of fiscal 2000, the Company approved restructuring
charges totaling approximately $105 million. These efforts are aimed at
improving our performance and efficiency (See "Management's Discussion and
Analysis of Financial Condition and Results of Operations").
Marketing and Sales and Service Organizations
Our customer loyalty is built on our employees' ability to form strong
working relationships with the people they serve in the marketplace and our
employees' ability to deliver consistently superior service and support. In
the U.S. and Canada, our sales force uses a sales model that is intended to
align our sales professionals with opportunities in the market. The model uses
a three-tiered system for deploying sales teams, and assigns coverage for each
geographic territory, and for specific named and major accounts. Account
representatives acting as primary client contacts are supported by specialists
in color, high-volume, outsourcing, and technology applications. The coverage
plan works together with IKON's new sales compensation plan that was launched
during fiscal 2000. The new sales compensation plan provides incentives to
help ensure that efforts in the field are fully coordinated with corporate
goals. During fiscal 2000, we continued to expand our sales coverage by
providing our sales professionals with territory analysis and sales automation
tools, such as On-Target, to effectively manage sales territories. Sales
personnel turnover is common in the industry and the Company is making a
considerable effort to attract and retain qualified sales personnel.
We have a worldwide service force of approximately 10,000 employees. Our
service force is continually trained on our new products through our two
national training centers. We are able to provide a consistent level of
service nationwide and worldwide because we do not generally rely on
independent local dealers for service and our service force is not focused
exclusively on metropolitan areas.
During fiscal 2000, we continued to implement our coordinated branding
campaign. Our strategy includes television, radio, and print advertising;
public relations and trade show initiatives; and plans for a bolder presence
at our web site, IKON.com. Our strategy is to showcase the full range of
IKON's capabilities, the strength of our local teams of experts, and our
commitment to customer service. We believe we can expand the market's
understanding of what we do and heighten marketplace awareness of our ability
to address critical needs -- providing solutions that boost productivity and
help businesses communicate.
New Product and Service Offerings
We are in the midst of a rapidly changing competitive environment (See
"Transition to Digital Products" and "Competition" discussed herein). IKON
recognizes the shifts taking place in our industry and we have been
positioning IKON to compete in this dynamic environment. We continue to refine
our strategy by forming alliances with leading vendors to expand and enhance
our product and service portfolio. Our continued focus on the right product
and service offerings and strong customer relationships will set us apart from
others in the industry.
During fiscal 2000, IKON continued to implement its strategy of moving
toward higher-end solutions. IKON introduced the Ricoh 850, a segment 5
digital copier, and the Canon imageRUNNER 110, IKON's first segment 6 digital
copier/printer offering.
6
IKON also introduced higher-end page printers from Canon, Ricoh and Hewlett-
Packard into its extensive line of solutions offerings. The incorporation of
page printers into IKON's product portfolio is a key element in our drive to
deliver a greater variety of document management and production solutions to
our customers. The strength of this expanded offering lies in IKON's ability
to seamlessly blend traditional imaging devices, emerging technologies, e-
services and the largest network of digital production facilities into
customizable solutions that meet the document workflow requirements of any
customer, large or small.
We continued to broaden our service offerings with e-services such as
Digital Express(R) 2000, and Virtual File Room(TM); document delivery systems,
such as IKON's Kiosk with Adobe(R) Acrobat(R) Messenger(TM); equipment
configuration devices such as T/R Systems MicroPress; and color solutions,
including Velocity Balance and EDOX 2000.
Productivity Initiatives
During fiscal 2000, the Company successfully implemented several initiatives
commenced in connection with the review of our business we undertook last
fiscal year. The focus of this effort was not just to identify cost-cutting
initiatives, but also to discover areas of opportunity within our organization
that we could leverage to gain efficiencies, and invest the resulting savings
in areas that are critical to our long-term success.
This fiscal year we successfully implemented the following initiatives: (a)
Sales -- we have increased sales coverage and enhanced our sales model
providing our sales professionals with territory analysis and sales automation
tools, such as On-Target, our internally developed web database, to
effectively manage their territories; (b) Marketing -- the Company has
continued to build awareness for the IKON brand and launched IKON Online, our
e-business initiative that enables web-based customer interaction; (c) Human
Resources -- we have implemented a new organizational structure that supports
geographic territories across all business units; (d) Purchasing, Inventory
Management and Controllable Expenses -- we have developed a national supply
chain organization that is leveraging our buying power with vendors and
streamlining our distribution and inventory management processes to gain
efficiencies; and (e) Administration and Customer Service -- we have
centralized a variety of administrative services into two shared services
centers to improve our cycle billing, order entry processes and billing
accuracy.
Customers
No single customer accounted for more than 10% of IKON's net sales in fiscal
2000. IKON does, however, have certain major customers. The loss of, or major
reduction in business from, one or more of IKON's major customers could have a
negative effect on IKON's financial position or results of operations.
Suppliers and Inventory
The Company's business is dependent upon close relationships with its
vendors and its ability to purchase products from these vendors on competitive
terms. Products distributed by IKON are purchased from numerous domestic and
overseas suppliers, primarily Canon, Ricoh and Oce. The Company also relies on
its equipment vendors for parts and supplies. (See "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Transition
to Digital Products").
The Company conducts its business in reliance upon its continuing ability to
purchase equipment, supplies, and parts from its current manufacturers
pursuant to authorized retail dealer and wholesale agreements.
Many of the Company's operations carry inventory to meet rapid delivery
requirements of customers. At September 30, 2000, inventories accounted for
approximately 13% of IKON's current assets.
7
Proprietary Matters
The Company has a number of trademarks, trade names and service marks which
the Company uses in the conduct of its business. Other than the "IKON Office
Solutions" mark and its related marks, the Company does not believe that any
single name, trademark, trade name or service mark is material to its business
taken as a whole. Further, the Company has a policy of protecting its
proprietary rights. However, any of the Company's proprietary rights could be
challenged, invalidated, or circumvented or may not provide significant
competitive advantages.
Environmental Regulation
IKON presently is engaged in distribution and services businesses which do
not generate significant hazardous wastes. Some of IKON's distribution
facilities have tanks for storage of diesel fuel and other petroleum products
which are subject to laws regulating such storage tanks. Federal, state and
local provisions relating to the protection of the environment have not had
and are not expected to have a material adverse effect upon the Company's
capital expenditures, liquidity, earnings or competitive position.
The Company is involved in a number of environmental remediation actions to
investigate and clean up certain sites related to its discontinued operations
in accordance with applicable federal and state laws. Uncertainties about the
status of laws and regulations, technology and information related to
individual sites, including the magnitude of possible contamination, the
timing and extent of required corrective actions and proportionate liabilities
of other responsible parties, make it difficult to develop a meaningful
estimate of probable future remediation costs. While the actual costs of
remediation at these sites may vary from management's estimates because of
these uncertainties, the Company has established an accrual for known
environmental obligations based on management's best estimate of the aggregate
environmental remediation exposure on these sites. After consideration of the
defenses available to the Company, the accrual for such exposure and other
responsible parties, management does not believe that its obligations to
remediate these sites would have a material adverse effect on the Company's
consolidated financial statements.
Employees
At September 30, 2000, IKON had approximately 39,600 employees. IKON
believes its relations with its employees are good.
Competition
IKON operates in a highly competitive environment. There are a number of
companies worldwide with significant financial resources which compete with
IKON to provide similar products and services in each of the markets served by
IKON. We compete primarily on the basis of technology, performance, price,
quality, reliability, distribution and customer service and support. In order
to remain competitive, we must offer new products and services, periodically
enhance our existing products and services and compete effectively on the
basis of the factors listed above. IKON's success in its future performance is
largely dependent upon its ability to compete successfully in its currently-
served markets and to expand into additional product and services segments.
Foreign Operations
IKON has operations in Canada, Mexico, the United Kingdom, Germany, France,
Ireland and Denmark. Information concerning revenues and long lived assets of
the Company's foreign continuing operations for each of the three years in the
period ended September 30, 2000 set forth in note 14 to the consolidated
financial statements (included on pages 33 through 35 of the 2000 Annual
Report to Shareholders) is incorporated herein by reference. Revenues from
exports during the last three fiscal years were not significant.
Item 2. Properties.
At September 30, 2000, IKON owned or leased approximately 900 facilities in
50 states, ten Canadian provinces, Europe and Mexico, of which approximately
1% are owned and 99% are leased under lease agreements with various expiration
dates. These properties occupy a total of approximately 9 million square feet.
8
Item 3. Legal Proceedings.
Information set forth under Note 8 (Contingencies) on pages 28 through 29 of
the 2000 Annual Report to Shareholders is incorporated herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders.
(No response to this item is required.)
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EXECUTIVE OFFICERS OF IKON
The following is a list of the Company's executive officers, their ages and
their positions for at least the last five years. Unless otherwise indicated,
positions shown are with IKON or its subsidiaries.
----------------
Name Age Position and Years Served
---- --- -------------------------
James J. Forese......... 65 Chairman of the Board (2000-Present); President,
Chief Executive Officer and a director (1998-
Present); Executive Vice President and President,
International Operations (1996-1998); Chief
Operating Officer (1996) and a director (1994-
1996)
David M. Gadra.......... 52 Senior Vice President and Chief Information
Officer (1996-Present); Manager, General Electric
Corporation Corporate Information Services (1992-
1996)
Dennis P. LeStrange..... 46 Senior Vice President, IKON North America (1999-
Present); Senior Vice President of Marketing,
IKON Business Services (1998-1999); President and
Chief Executive Officer of IKON New England
(1994-1998)
Don H. Liu.............. 39 Senior Vice President, General Counsel and
Secretary (1999-Present); Vice President and
Deputy Chief Legal Officer, Aetna U.S.
Healthcare, including predecessor entity (1992-
1999)
Barbara A. Pellow....... 46 Senior Vice President, Marketing (1999-Present);
Industry Consultant and a director, CAP Ventures
(1996-1999); Vice President of Marketing, Indigo
(1995-1996)
Beth B. Sexton.......... 44 Senior Vice President, Human Resources (1999-
Present); Vice President Human Resources (1997-
1999); Regional Vice President (1996 to 1997);
Senior Management roles in Human Resources with
CH2M Hill and Norfolk South (1995)
Carlyle S. Singer....... 44 Controller (2000-Present); President, IKON France
(1998-2000); Chief Financial Officer, IKON France
(1995-2000)
William S. Urkiel....... 55 Senior Vice President and Chief Financial Officer
(1999-Present); Corporate Vice President and
Chief Financial Officer, AMP, Inc. (1997-1998);
Corporate Controller, AMP, Inc. (1995-1996)
9
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The New York Stock Exchange is the principal market on which the Company's
common stock is traded (ticker symbol IKN). As of December 22, 2000, there
were approximately 141,698,352 holders of record of IKON's common stock. The
information regarding the quarterly market price ranges of IKON's common stock
and dividend payments under "Quarterly Financial Summary" on page 37 of the
2000 Annual Report to Shareholders is incorporated herein by reference.
IKON anticipates that it will pay a quarterly dividend of $.04 per common
share in March 2001. The Company currently expects to continue its policy of
paying regular cash dividends, although there can be no assurance as to future
dividends because they are dependent upon future operating results, capital
requirements and financial condition and may be limited by covenants in
certain loan agreements.
Item 6. Selected Financial Data.
Information appearing under "Corporate Financial Summary" for fiscal 1996
through 2000 regarding revenues, income from continuing operations, income
from continuing operations per common share, total assets, total debt, and
cash dividends per common share on page 38 of the 2000 Annual Report to
Shareholders is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Information appearing under "Financial Review" on pages 10 through 17 of the
2000 Annual Report to Shareholders is incorporated herein by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Information appearing under "Market Risk" on pages 16 and 17 of the 2000
Annual Report to Shareholders is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The Consolidated Financial Statements of IKON and its subsidiaries on page 9
and pages 18 through 36 and the information appearing under "Quarterly
Financial Summary" for fiscal 2000 and 1999 on page 37 of the 2000 Annual
Report to Shareholders are incorporated herein by reference. The Report of
PricewaterhouseCoopers LLP for the Company's fiscal year ended September 30,
2000 is attached hereto as Exhibit 99.1, and the report of Ernst & Young, LLP
for the Company's fiscal years ended September 30, 1999 and September 30, 1998
is attached hereto as Exhibit 99.2.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
(No response to this item is required)
----------------
10
PART III
Item 10. Directors and Executive Officers of the Registrant.
Information regarding directors appearing in IKON's Notice of Annual Meeting
of Shareholders and Proxy Statement for the annual meeting of shareholders to
be held on February 21, 2001 (the "2001 Proxy Statement") is incorporated
herein by reference. Information regarding executive officers is set forth in
Part I of this report, and additional information regarding executive officers
appearing under "Executive Compensation" in the 2001 Proxy Statement is
incorporated herein by reference.
Item 11. Executive Compensation.
Information appearing under "Executive Compensation" in the 2001 Proxy
Statement is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Information regarding security ownership of certain beneficial owners and
management appearing under "Security Ownership" in the 2001 Proxy Statement is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
Information appearing under "Certain Transactions" in the 2001 Proxy
Statement is incorporated herein by reference.
----------------
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a)(1) and (2) List of Financial Statements and Financial Statement
Schedules.
The response to this portion of Item 14 is submitted on page 17 hereof as a
separate section of this report.
(a) (3) List of Exhibits.*
The following exhibits are filed as a part of this report (listed by numbers
corresponding to the Exhibit Table of Item 601 in Regulation S-K):
3.1 Amended and Restated Articles of Incorporation, filed as Exhibit 3.1
to IKON's 1997 Form 10-K is incorporated herein by reference.
3.2 Amendment to Amended and Restated Articles of Incorporation filed as
Exhibit 3.1 to IKON's 1998 Form 10-K is incorporated herein by
reference.
3.3 Code of Regulations of IKON, filed as Exhibit 3.2 to IKON's Form 10-
Q for the quarter ended March 31, 1996 is incorporated herein by
reference.
4.1 Credit Agreement, dated January 16, 1998, among IKON and various
institutional lenders, with CoreStates Bank, N.A., as Agent filed as
Exhibit 4.1 to IKON's 1998 Form 10-K is incorporated herein by
reference.
4.2 Credit Agreement among IKON, certain of its subsidiaries, various
banks and Deutsche Bank AG, New York Branch, as Agent, dated as of
August 30, 1996 and Amendment 1 to Credit Agreement, dated as of
April 1, 1997, ("DB Credit Agreement") filed as Exhibit 4.2 to
IKON's 1997 Form 10-K is incorporated herein by reference.
4.3 Extension to DB Credit Agreement dated August 30, 1999 filed as
Exhibit 4.3 to IKON's 1999 Form 10-K is incorporated herein by
reference.
4.4 Credit Agreement dated as of October 13, 1995 among IKON Office
Solutions, Inc., an Ontario corporation (formerly Alco Office
Systems Canada), Deutsche Bank Canada, Chemical Bank of Canada and
Royal Bank of Canada (the "1995 Credit Agreement"), filed as Exhibit
4.5 to IKON's 1998 Form 10-K is incorporated herein by reference.
11
4.5 Amendment Number 1 to Guarantee appended to the 1995 Credit
Agreement, filed as Exhibit 4.3 to IKON's 1998 Form 10-K is
incorporated herein by reference.
4.6 Note Purchase Agreement between IKON and various purchasers dated
July 15, 1995 for $55 million in 7.15% Notes due November 15, 2005,
filed as Exhibit 4.9 to IKON's 1995 Form 10-K is incorporated herein
by reference.
4.7 Extension to DB Credit Agreement dated February 28, 2000.
4.8 Extension to DB Credit Agreement dated August 15, 2000.
4.9 Pursuant to Regulation S-K item 601(b)(4)(iii), IKON agrees to
furnish to the Commission, upon request, a copy of other instruments
defining the rights of holders of long-term debt of IKON and its
subsidiaries.
10.1 Distribution Agreement between IKON and Unisource Worldwide, Inc.
("Unisource") dated as of November 20, 1996, filed as Exhibit 2.1 to
Unisource's Registration Statement on Form 10 (effective November
26, 1996) is incorporated herein by reference.
10.2 Tax Sharing and Indemnification Agreement between IKON and Unisource
dated as of November 20, 1996, filed as Exhibit 10.1 to Unisource's
Registration Statement on Form 10 (effective November 26, 1996) is
incorporated herein by reference.
10.3 Benefits Agreement between IKON and Unisource dated as of November
20, 1996, filed as Exhibit 10.5 to Unisource's Registration
Statement on Form 10 (effective November 26, 1996) is incorporated
herein by reference.
10.4 Support Agreement dated as of October 22, 1996 between IKON and IKON
Capital, Inc. (IKON's leasing subsidiary), filed as Exhibit 10.4 to
IOS Capital, Inc.'s Form 8-K dated October 22, 1996 is incorporated
herein by reference.
10.5 Amended and Restated Receivables Transfer Agreement dated as of
March 31, 1997 among IKON Funding, Inc., IOS Capital, Inc., Twin
Towers, Inc. and Deutsche Bank AG, New York Branch, filed as Exhibit
10.5 to IKON's 1997 Form 10-K is incorporated herein by reference.
10.6 First Tier Transfer Agreement, dated as of March 31, 1997, between
IOS Capital, Inc. and IKON Funding, Inc., filed as Exhibit 10.6 to
IKON's 1997 Form 10-K is incorporated herein by reference.
10.7 Receivables Transfer Agreement dated as of September 30, 1996 among
IKON Funding, Inc., IOS Capital, Inc., Old Line Funding Corp. and
Royal Bank of Canada, filed as Exhibit 10.5 to IKON's 1996 Form 10-K
is incorporated herein by reference.
10.8 Amendment Number 1 to Receivables Transfer Agreement dated as of
November 7, 1997 filed as Exhibit 10.7 to IKON's 1998 Form 10-K is
incorporated herein by reference.
10.9 Transfer Agreement dated as of September 30, 1996 between IOS
Capital, Inc. and IKON Funding, Inc., filed as Exhibit 10.6 to
IKON's 1997 Form 10-K is incorporated herein by reference.
10.10 Amendment Number 1 to Transfer Agreement dated September 30, 1996
filed as Exhibit 10.8 to IKON's 1998 Form 10-K is incorporated
herein by reference.
10.11 Receivables Transfer Agreement dated as of December 1, 1998 among
IOS Capital, Inc., IKON Funding-1, LLC, Market Street Funding
Corporation and PNC Bank, N.A., as Agent filed as Exhibit 10.9 to
IKON's 1998 Form 10-K is incorporated herein by reference.
10.12 Transfer Agreement dated as of December 1, 1998 between IKON
Funding-1, LLC and IOS Capital, Inc filed as Exhibit 10.10 to IKON's
1998 Form 10-K is incorporated herein by reference.
10.13 First Amendment dated September 10, 1999 to Transfer Agreement filed
as Exhibit 10.13 to IKON's 1999 Form 10-K is incorporated herein by
reference.
12
10.14 Master Concurrent Lease Agreement between IKON Office Solutions,
Inc., a Canadian corporation, IKON Capital, Inc., a Canadian
corporation, IKON Office Solutions, Inc., an Ohio corporation, Prime
Trust and TD Securities, Inc. filed as Exhibit 10.11 to IKON's 1998
Form 10-K is incorporated herein by reference.
10.15 Indenture dated as of December 11, 1995 between IKON and First Union
Bank, N.A., as Trustee, filed as Exhibit 4 to IKON's Registration
Statement No. 33-64177 is incorporated herein by reference.
10.16 Indenture dated as of July 1, 1995 between IOS Capital, Inc. and
Chase Manhattan Bank, N.A. (formerly Chemical Bank, N.A.), as
Trustee, filed as Exhibit 10.8 to IKON's 1996 Form 10-K is
incorporated herein by reference.
10.17 Indenture dated as of July 1, 1994 between IOS Capital, Inc. and
NationsBank, N.A., as Trustee, filed as Exhibit 4 to IKON Capital,
Inc.'s Registration Statement No. 33-53779 is incorporated herein by
reference.
10.18 Indenture dated as of April 1, 1986 between IKON and the Chase
Manhattan Bank, N.A., as Trustee, filed as Exhibit 4.1 to IKON's
Registration Statement No. 30-4829 is incorporated herein by
reference.
10.19 Distribution Agreement dated as of June 4, 1997 between IOS Capital,
Inc. and various distribution agents, filed as Exhibit 10.13 to
IKON's 1997 Form 10-K is incorporated herein by reference.
10.20 Distribution Agreement dated as of June 30, 1995 between IOS
Capital, Inc. and various distribution agents, filed as Exhibit
10.21 to IKON's 1995 Form 10-K is incorporated herein by reference.
10.21 Distribution Agreement dated July 1, 1994, filed as Exhibit 1 to IOS
Capital Inc.'s Form 10-Q for the quarter ended June 30, 1994 is
incorporated herein by reference.
10.22 Rights Agreement dated as of February 10, 1988 between IKON and
National City Bank, filed on February 11, 1988 as Exhibit 1 to
IKON's Registration Statement on Form 8-A is incorporated herein by
reference.
10.23 Amended and Restated Rights Agreement dated as of June 18, 1997,
filed as Exhibit 4.1 to IKON's Form 8-K dated June 18, 1997 and
filed as Exhibit 10.19 to IKON's 1998 Form 10-K is incorporated
herein by reference.**
10.24 Amended and Restated Long Term Incentive Compensation Plan, filed as
Exhibit 10.1 to IKON's Form 10-Q for the quarter ended March 31,
1996 is incorporated herein by reference.**
10.25 Amendment Number 1 to Amended and Restated Long Term Incentive
Compensation Plan, filed as 10.2 to IKON's 1998 Form 10-K, is
incorporated herein by reference.**
10.26 Annual Bonus Plan, filed as Exhibit 10.3 to IKON's 1994 Form 10-K,
is incorporated herein by reference.**
10.27 1986 Stock Option Plan, filed as Exhibit 10.6 to IKON's 1995 Form
10-K is incorporated herein by reference.**
10.28 Amendment to 1986 Stock Option Plan filed as Exhibit 10.22 to IKON's
1998 Form 10-K is incorporated herein by reference.**
10.29 1995 Stock Option Plan, filed as Exhibit 10.5 to IKON's Form 10-Q
for the quarter ended March 31, 1996 is incorporated herein by
reference.**
10.30 Amendment to 1995 Stock Option Plan filed as Exhibit 10.23 to IKON's
1998 Form 10-K is incorporated herein by reference.**
10.31 Non-Employee Directors Stock Option Plan, filed as Exhibit 10.31 to
IKON's 1997 Form 10-K is incorporated herein by reference.
13
10.32 2000 IKON Office Solutions, Inc. Non-Employee Directors Compensation
Plan, filed as Exhibit 99.1 to the Company's Registration Statement
on Form S-8 dated June 20, 2000 (Registration number 333-40108).**
10.33 2000 IKON Office Solutions, Inc. Executive Incentive Plan, filed as
Exhibit 99.2 to the Company's Registration Statement on Form S-8
dated June 20, 2000 (Registration number 333-40108).**
10.34 2000 IKON Office Solutions, Inc. Employee Stock Option Plan, filed
as Exhibit 99.3 to the Company's Registration Statement on Form S-8
dated June 20, 2000 (Registration number 333-40108).**
10.35 Change in Control Agreement for David M. Gadra, filed as Exhibit
10.26 to IKON's 1997 Form 10-K is incorporated herein by
reference.**
10.36 1980 Deferred Compensation Plan, filed as Exhibit 10.7 to IKON's
1992 Form 10-K is incorporated herein by reference.**
10.37 Amendment dated January 1, 1997 to the 1980 Deferred Compensation
Plan.**
10.38 Amendment dated November 6, 1997 to 1980 Deferred Compensation Plan
filed as Exhibit 10.28 to IKON's 1998 Form 10-K is incorporated
herein by reference.**
10.39 1985 Deferred Compensation Plan, filed as Exhibit 10.8 to IKON's
1992 Form 10-K is incorporated herein by reference.**
10.40 Amendment dated November 6, 1997 to 1985 Deferred Compensation Plan
filed as Exhibit 10.29 to IKON's 1998 Form 10-K is incorporated
herein by reference.**
10.41 Amendment dated January 1, 1997 to the 1985 Deferred Compensation
Plan.**
10.42 1991 Deferred Compensation Plan, filed as Exhibit 10.9 to IKON's
1992 Form 10-K is incorporated herein by reference.
10.43 Amendment dated November 6, 1997 to 1991 Deferred Compensation Plan
filed as Exhibit 10.30 to IKON's 1998 Form 10-K is incorporated
herein by reference.**
10.44 Amendment dated January 1, 1997 to the 1991 Deferred Compensation
Plan.**
10.45 Amended and Restated 1994 Deferred Compensation Plan.**
10.46 Amended and Restated Executive Deferred Compensation Plan.**
10.47 Concurrent Lease Agreement between IKON Office Solutions, Inc. et
al. And Care Trust dated September 14, 1999 filed as Exhibit 10.48
to IKON's 1999 Form 10-K is incorporated herein by reference.
10.48 Executive Employment Agreement for James J. Forese filed as Exhibit
10.33 to IKON's 1999 Form 10-K is incorporated herein by
reference.**
10.49 Executive Employment Contract for Don H. Liu.**
10.50 Executive Employment Contract for Barbara A. Pellow.**
10.51 Executive Employment Contract for William S. Urkiel.**
10.52 Executive Employment Contract for David M. Gadra.**
10.53 Executive Employment Contract for Dennis Lestrange.**
10.54 Receivables Transfer Agreement dated as of September 19, 2000 among
IOS Capital, Inc., IKON Funding-2, LLC, Park Avenue Receivables
Corporation, The Chase Manhattan Bank, as agent and the several
financial institutions party thereto from time to time.
10.55 Transfer Agreement dated as of September 19, 2000 between IKON
Funding-2, LLC and IOS Capital, Inc.
12.1 Ratio of Earnings to Fixed Charges.
14
12.2 Ratio of Earnings to Fixed Charges Excluding Captive Finance
Subsidiaries.
12.3 Ratio of Earnings to Fixed Charges and Preferred Stock Dividends.
12.4 Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Excluding Captive Finance Subsidiaries.
13 Financial Review of IKON's Annual Report to Shareholders for the
fiscal year ended September 30, 2000 (which, except for those
portions thereof expressly incorporated herein by reference, is
furnished for the information of the Commission and is not "filed"
as part of this report).
21 Subsidiaries of IKON.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Ernst & Young, LLP.
24 Powers of Attorney; certified resolution re: Powers of Attorney.
27 Financial Data Schedule.
99.1 Report of PricewaterhouseCoopers LLP
99.2 Report of Ernst & Young, LLP
- --------
* Copies of the exhibits will be furnished to any security holder of IKON
upon payment of the reasonable cost of reproduction.
** Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K.
On October 26, 2000, the Company filed a Current Report on Form 8-K to file,
under Item 5 of the Form, a press release concerning the Company's anticipated
results for the fourth quarter of fiscal year 2000.
On November 13, 2000, the Company filed a Current Report on Form 8-K to
file, under Item 5 of the Form, a press release concerning the Company's
earnings for the fourth quarter of fiscal year 2000 and the fiscal year ended
September 30, 2000.
(c) The response to this portion of Item 14 is contained in Item 14(a)(3)
above.
(d) The response to this portion of Item 14 is contained on page 16 of this
report.
15
IKON Office Solutions, Inc. and Subsidiaries
ANNUAL REPORT ON FORM 10-K
ITEMS 14(a)(1) and (2) and 14(d)
List of Financial Statements and
Financial Statement Schedules
Financial Statements: The following consolidated financial statements of
IKON Office Solutions, Inc. and its subsidiaries included in the 2000 Annual
Report to Shareholders are incorporated by reference in Item 8 of Part II of
this report:
Consolidated Statements of Operations
--Fiscal years ended September 30, 2000, September 30, 1999 and
September 30, 1998
Consolidated Balance Sheets
--September 30, 2000 and September 30, 1999
Consolidated Statements of Cash Flows
--Fiscal years ended September 30, 2000, September 30, 1999 and
September 30, 1998
Consolidated Statements of Changes in Shareholders' Equity
--Fiscal years ended September 30, 2000, September 30, 1999 and
September 30, 1998
Notes to Consolidated Financial Statements
Financial Statement Schedules: The following consolidated financial
statements schedule of IKON Office Solutions, Inc. and its subsidiaries is
submitted in response to Item 14(d).
Schedule II--Valuation and Qualifying Accounts.
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable and, therefore, have been
omitted.
16
IKON OFFICE SOLUTIONS, INC.
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Col. A Col. B Col. C Col. D Col. E
------ ------------ --------------------- ---------- -------
Balance
Balance at Charged to Charged to at End
Beginning of Costs and Other of
Description Period Expenses Accounts Deductions Period
----------- ------------ ---------- ---------- ---------- -------
Year Ended September 30,
2000
Allowance for doubtful
accounts............... $43,543 $21,631 $29,852(2) $35,322
Lease default reserve... 74,784 61,740 61,732(2) 74,792
Year Ended September 30,
1999
Allowance for doubtful
accounts............... $63,591 $31,765 $ 550(1) $52,363(2) $43,543
Lease default reserve... 83,507 62,790 (710)(3) 72,223(2) 74,784
Year Ended September 30,
1998
Allowance for doubtful
accounts............... $54,192 $47,052 $ 903(1) $38,556(2) $63,591
Lease default reserve... 76,767 94,768 14,014(3) 74,014(2) 83,507
- --------
(1) Represents beginning balances of acquired companies.
(2) Accounts written off during year, net of recoveries.
(3) Represents portion related to assets sold.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this report on Form 10-K for the Fiscal
Year ended September, 30, 2000 to be signed on its behalf by the undersigned,
thereunto duly authorized.
IKON OFFICE SOLUTIONS, INC.
Date: December 28, 2000
By /s/ William S. Urkiel
__________________________________
(William S. Urkiel)
Senior Vice President and Chief
Financial Officer
Signature Title
--------- -----
/s/ James J. Forese Chairman and Chief Executive Officer
____________________________________ (Principal Executive Officer)
(James J. Forese)
/s/ William S. Urkiel Senior Vice President, and Chief
____________________________________ Financial Officer (Principal Financial
(William S. Urkiel) Officer)
/s/ Carlyle S. Singer Controller (Principal Accounting
____________________________________ Officer)
(Carlyle S. Singer)
/s/ Judith M. Bell* Director
____________________________________
(Judith M. Bell)
/s/ James R. Birle* Director
____________________________________
(James R. Birle)
/s/ Philip E. Cushing* Director
____________________________________
(Philip E. Cushing)
/s/ Robert M. Furek* Director
____________________________________
(Robert M. Furek)
18
Signature Title
--------- -----
/s/ Thomas R. Gibson* Director
____________________________________
(Thomas R. Gibson)
/s/ Richard A. Jalkut* Director
____________________________________
(Richard A. Jalkut)
/s/ Arthur E. Johnson* Director
____________________________________
(Arthur E. Johnson)
/s/ Kurt Landgraf* Director
____________________________________
(Kurt Landgraf)
/s/ Marilyn Ware* Director
____________________________________
(Marilyn Ware)
*By his signature set forth below, Don H. Liu, pursuant to duly executed
Powers of Attorney duly filed with the Securities and Exchange Commission, has
signed this Form 10-K on behalf of the persons whose signatures are printed
above, in the capacities set forth opposite their respective names.
/s/ Don H. Liu December 28, 2000
____________________________________
Don H. Liu
19
Exhibit Index
The following exhibits are attached this report (listed by numbers
corresponding to the Exhibit Table of Item 601 in Regulation S-K):
4.7 Extension to DB Credit Agreement dated February 28, 2000.
4.8 Extension to DB Credit Agreement dated August 15, 2000.
10.38 Amendment dated January 1, 1997 to the 1985 Deferred Compensation
Plan
10.41 Amendment dated January 1, 1997 to the 1991 Deferred Compensation
Plan
10.42 Amended and Restated 1994 Deferred Compensation Plan
10.43 Amended and Restated Executive Deferred Compensation Plan
10.45 Executive Employment Contract for Don H. Liu.
10.46 Executive Employment Contract for Barbara A. Pellow.
10.47 Executive Employment Contract for William S. Urkiel.
10.48 Executive Employment Contract for David M. Gadra.
10.49 Executive Employment Contract for Dennis LeStrange.
10.50 Receivables Transfer Agreement dated as of September 19, 2000
among IOS Capital, Inc., IKON Funding-2, LLC, Park Avenue
Receivables Corporation, The Chase Manhattan Bank, as agent and
the several financial institutions party thereto from time to
time.
10.51 Transfer Agreement dated as of September 19, 2000 between IKON
Funding-2, LLC and IOS Capital, Inc.
12.1 Ratio of Earnings to Fixed Charges.
12.2 Ratio of Earnings to Fixed Charges Excluding Captive Finance
Subsidiaries.
12.3 Ratio of Earnings to Fixed Charges and Preferred Stock Dividends.
12.4 Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Excluding Captive Finance Subsidiaries.
13 Financial Review of IKON's Annual Report to Shareholders for the
fiscal year ended September 30, 2000 (which, except for those
portions thereof expressly incorporated herein by reference, is
furnished for the information of the Commission and is not
"filed" as part of this report).
21 Subsidiaries of IKON.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Ernst & Young, LLP.
24 Powers of Attorney; certified resolution re: Powers of Attorney.
27 Financial Data Schedule.
99.1 Report of PricewaterhouseCoopers LLP
99.2 Report of Ernst & Young, LLP