FORM 10-K FOR IKON OFFICE SOLUTIONS

As filed with the Securities and Exchange Commission on December 21, 2001

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended September 30, 2001 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, Pennsylvania		19482
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (610) 296-8000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Name of each exchange on which registered
Common Stock, no par value (with Preferred Share Purchase Rights)		New York Stock Exchange

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. x

The aggregate market value of the voting common stock held by non-affiliates of the registrant as of December 1, 2001, was approximately $1,517,113,738 based upon the closing sales price on the New York Stock Exchange Composite Tape of $10.72 per common share on December 1, 2001. 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 18, 2001 was 141,865,667.

DOCUMENTS INCORPORATED BY REFERENCE

Parts I and II—Portions of the Registrant’s Annual Report to Shareholders

for fiscal year ended September 30, 2001

Part III—Portions of the Registrant’s Proxy Statement for the 2002 Annual Meeting of Shareholders

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 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; the implementation of the Oracle e-business suite; anticipated growth rates in the digital and color equipment and outsourcing industries; the effect of foreign currency 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 herein): 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 foreign 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 fluctuations in interest rates); and general economic conditions.

Competition. The Registrant operates in a highly competitive environment. There are a number of companies worldwide with significant financial resources which compete with the Registrant to provide similar products and services, such as Canon, Ricoh, Océ, Xerox and Danka. Competition is based largely upon technology, performance, pricing, quality, reliability, distribution, customer service and support. In addition, the financial pressures faced by some of the Registrant’s competitors may cause them to engage in uneconomic pricing practices, which may cause the prices that the Registrant is able to charge in the future for its products and services to be less than the Registrant has historically charged. The Registrant’s future success is based in large part upon its ability to successfully compete in its current markets and expand into additional products and services offerings. The intense competition inherent in the Registrant’s industry could also result in additional pressure in 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 office equipment industry transitions to digital technology. This transition represents a significant technological change in the Registrant’s industry with ramifications that cannot be fully foreseen. Some of the digital products placed by the Registrant replace or compete with the analog products placed by the Registrant. If the Company does not adapt successfully to these changes, our actual results may differ materially from those expected.

Vendor Relationships. The Registrant’s access to equipment, parts and supplies is dependent upon close relationships with its vendors and its ability to purchase products from these vendors on competitive terms. The cessation or deterioration in relationships with, or the financial condition of, significant vendors may cause the Company to be unable to distribute equipment, including digital products and high-volume or color equipment, parts and supplies, and 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 the Company’s access to certain credit markets. The Registrant’s credit ratings have declined in recent years; however, the effects of such declines 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 the Company’s present credit ratings permit the Registrant access to the credit markets. There is no assurance that these credit ratings can be maintained and/or the credit markets can be readily accessed.

Productivity Initiatives. The Registrant’s ability to improve its profit margins is largely dependent on its ability to maintain an efficient, cost-effective operation. The Registrant continues to invest in new market opportunities and to streamline its infrastructure. These investments are aimed at making the Company more profitable and competitive in the long-term, and include initiatives such as centralized credit and purchasing, shared services and the implementation of the Oracle e-business suite, a comprehensive, multi-year initiative designed to web-enable our information technology infrastructure. 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 fourth quarter of fiscal 2001, the Company announced the acceleration of certain cost cutting and infrastructure improvements and recorded a pre-tax restructuring and asset impairment charge of $60.0 million and reserve adjustments related primarily to the exit of the Company’s telephony operations of $5.3 million. This resulted in a charge of $65.3 million ($49.2 million after-tax, or $0.34 per share on a diluted basis). These actions address the exit from the Company’s telephony operations in the United States and Europe, the closing of a number of non-strategic digital print centers and further downsizing of operational infrastructures throughout the organization as the Company leverages and intensifies prior standardization and centralization initiatives. These actions include the ongoing centralization and consolidation of many selling and administrative functions, including marketplace consolidation, supply chain, finance, customer service, sales support and the realignment of sales coverage against our long-term growth objectives. Additionally, the Company recorded an asset impairment charge of $3.6 million ($3.3 million after-tax, or $0.02 per share on a diluted basis) related to the exit of the Company’s technology education operations. Therefore, the aggregate charge recorded in fiscal 2001 (the “Fiscal 2001 Charge”) was $68.9 million ($52.5 million after-tax, or $0.36 per share on a diluted basis).

In the first and fourth quarters of fiscal 2000, the Company announced certain restructuring charges totaling approximately $105.2 million (the “Fiscal 2000 Charge”). 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 the Company’s performance and efficiency.

The failure to execute the actions described above concerning the Fiscal 2001 Charge or Fiscal 2000 Charge 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.

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” refer 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 one of the world’s leading providers 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 document solutions, as well as network design and consulting and e-business development.

IKON has locations worldwide, including 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 Océ. IKON also distributes products from Microsoft, IBM, T/R Systems and Electronics for Imaging. Customers include large and small businesses, professional firms and government agencies.

IKON’s vision is to be a leader in providing innovative solutions and services that enable its customers to communicate business information more effectively. IKON seeks to grow its revenues by increasing its market share, expanding market opportunities, and strengthening operating margins by improving productivity and lowering fixed costs.

IKON will continue to execute on the following key strategies to leverage IKON’s strengths and position IKON for long-term success:

Invest in long-term growth opportunities;

Generate long-term structural benefits; and

Build financial strength.

In fiscal 2001, IKON generated approximately $5.3 billion in revenues, and generated net income of $15.2 million, or $0.11 per diluted common share. (See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 11 and 15 appended thereto).

Operating Segments

Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosures About Segments Of An Enterprise And Related Information,” 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 46 of the 2001 Annual Report to Shareholders. Additional financial data and commentary on recent financial results for operating segments are provided on pages 19, 20 and 22 of that Report and in Note 14 to the consolidated financial statements (included on pages 46 through 47 of the 2001 Annual Report to Shareholders).

Operating businesses that are reported as segments include IKON North America (“INA”) and IKON Europe (“IE”). The INA and IE segments provide copiers, printers, color solutions, distributed printing, facilities management, legal document solutions and other office equipment and services, as well as design, planning and support services for network platforms and IT integration projects. These segments also include our captive finance subsidiaries in North America and Europe, respectively.

Other includes our North American business imaging services, education, Sysinct ^SM and telephony businesses. Business imaging services focuses on electronic file conversion; education offers technology training; Sysinct specializes in e-business development; and telephony provides telecommunications services. In the fourth quarter of fiscal 2001, the Company made a decision to exit the telephony business in the United States and Europe and our technology education business.

As a result of our ongoing infrastructure improvement programs and the changing dynamics of our business, during fiscal 2001, network integration (included in Other in fiscal 2000) is included in INA. Prior year results have been reclassified to conform with the current year presentation.

Board Changes

During fiscal 2001, James Birle, who has served as a director of the Company since 1996, and Robert M. Furek, who has served as a director of the Company since 1999, and acted as Chairman of the Company’s Human Resources Committee, declined to stand for re-election to the Company’s Board. The Company would like to thank Mr. Birle and Mr. Furek for their significant contributions to IKON’s Board of Directors and the Company.

Transition to Digital Products

During fiscal 2001, 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 device.

One of our goals is to leverage the analog-to-digital conversion our industry is experiencing. This part of our strategy is important because it provides IKON the opportunity to expand the ongoing revenue benefit of our service relationship with our existing customer base, as well as an opportunity to convert our base of analog customers to digital equipment. Increasing our digital equipment base creates new opportunities for expanding customer relationships by selling additional products and services.

Operations Integration

In fiscal 2001, IKON continued to integrate its business operations merging the network integration capabilities of its technology services group into INA. 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.

In addition, we have established as separate operating units, business imaging services and Sysinct. Our business imaging service focuses on electronic file conversion and Sysinct specializes in e-business development. In the fourth quarter of fiscal 2001, the Company made a decision to exit the telephony business in the United States and Europe and our technology education business.

In the fourth quarter of fiscal 2001, the Company announced the acceleration of certain cost cutting and infrastructure improvements and recorded a pre-tax restructuring and asset impairment charge of $60.0 million and reserve adjustments related primarily to the exit of the Company’s telephony operations of $5.3 million. This resulted in a charge of $65.3 million ($49.2 million after-tax, or $0.34 per share on a diluted basis). These actions address the exit from the Company’s telephony operations in the United States and Europe, the closing of a number of non-strategic digital print centers and further downsizing of operational infrastructures throughout the organization as the Company leverages and intensifies prior standardization and centralization initiatives. These actions include the ongoing centralization and consolidation of many selling and administrative functions, including marketplace consolidation, supply chain, finance, customer service, sales support and the realignment of sales coverage against our long-term growth objectives. Additionally, the Company recorded an asset impairment charge of $3.6 million ($3.3 million after-tax, or $0.02 per share on a diluted basis) related to the exit of the Company’s technology education operations. Therefore, the aggregate charge recorded in fiscal 2001 (the “Fiscal 2001 Charge”) was $68.9 million ($52.5 million after-tax, or $0.36 per share on a diluted basis) (See “Management’s Discussion and Analysis of Financial Condition and Results of Operations”).

Marketing, 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. IKON’s sales force coverage model in the United States and Canada is intended to align our sales professionals with opportunities in the market. The model uses a four-tiered system for deploying sales teams and assigns coverage for each geographic territory and for specific named and major and strategic 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 sales compensation plan. Our sales compensation plan provides incentives to help ensure that efforts in the field are fully coordinated with corporate goals. We continue 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 worldwide because we do not generally rely on independent local dealers for service and our service force is not focused exclusively on metropolitan areas.

Our coordinated branding campaign strategy includes television, radio, and print advertising; direct marketing; public relations and trade show initiatives; and a bold 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 products and services offerings and strong customer relationships will set us apart from others in the industry.

IKON continued to implement its strategy of moving toward higher-end solutions as placements of high-end segment 5 and 6 equipment increased over 100% compared to the prior year during fiscal 2001. The introduction of equipment such as the Ricoh 1085 and 1105 (formerly 850 and 1050) and the Canon imageRunner 110, 105 and 8500 solidified our competitive presence in this market. Placements of this equipment are a key building block to developing growth opportunities in our equipment service business. IKON also offers higher-end page printers from Canon, Ricoh and Hewlett-Packard.

During fiscal 2001, we launched our customized e-catalog, IKON Online, which offers our customers a Web-based means of ordering contracted equipment and supplies, placing service calls, and submitting meter reads. The site offers a product and service catalog customized for each major account to consolidated expenditure tracking and integration with e-procurement systems.

We continued to broaden our service offerings with e-services such as Digital Express® and IKON’s Desktop Express™; document delivery systems, such as IKON’s Kiosk with Adobe® Acrobat® Messenger™; and distributed output management solutions for color and black & white devices, including T/R Systems MicroPress, CPS, EFI’s Velocity Balance, EDOX and IKON’s Color Cluster.

Productivity and Cost-Cutting Initiatives

During fiscal 2001, we continued to invest in new market opportunities and to streamline our infrastructure. These investments are aimed at making the Company more profitable and competitive in the long-term. We have continued to build on, and see rewards from, initiatives such as centralized credit and purchasing and shared services. We made significant investments in our Oracle initiative, a comprehensive, multi-year initiative designed to web-enable our information technology infrastructure, which we anticipate will provide benefits to IKON and our customers in terms of improved productivity and competitive differentiation.

In addition, in the fourth quarter of fiscal 2001, the Company announced the acceleration of certain cost cutting and infrastructure improvements and recorded a pre-tax restructuring and asset impairment charge of $60.0 million and reserve adjustments related primarily to the exit of the Company’s telephony operations of $5.3 million. This resulted in a charge of $65.3 million ($49.2 million after-tax, or $0.34 per share on a diluted basis). These actions address the exit from the Company’s telephony operations in the United States and Europe, the closing of a number of non-strategic digital print centers and further downsizing of operational infrastructures throughout the organization as the Company leverages and intensifies prior standardization and centralization initiatives. These actions include the ongoing centralization and consolidation of many selling and administrative functions, including marketplace consolidation, supply chain, finance, customer service, sales support and the realignment of sales coverage against our long-term growth objectives. Additionally, the Company recorded an asset impairment charge of $3.6 million ($3.3 million after-tax, or $0.02 per share on a diluted basis) related to the exit of the Company’s technology education operations. Therefore, the aggregate charge recorded in fiscal 2001 (the “Fiscal 2001 Charge”) was $68.9 million ($52.5 million after-tax, or $0.36 per share on a diluted basis) (See “Management’s Discussion and Analysis of Financial Condition and Results of Operations”).

Customers

No single customer accounted for more than 10% of IKON’s net sales in fiscal 2001. 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, Hewlett-Packard and Océ. 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, 2001, inventories accounted for approximately 12% of IKON’s current assets.

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, insurance coverage 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, 2001, IKON had approximately 37,600 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, 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 herein. 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 products and services offerings.

Foreign Operations

IKON has operations in Canada, Mexico, the United Kingdom, France, Germany, 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, 2001 set forth in Note 14 to the consolidated financial statements (included on pages 46 and 47 of the 2001 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, 2001, IKON owned or leased approximately 700 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 7.9 million square feet.

Item 3. Legal Proceedings.

Information set forth under Notes 8 (Contingencies) and 17 (Shareholder Litigation Settlement) on pages 39, 40 and 48, respectively, of the 2001 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.)

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	66	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	53	Senior Vice President and Chief Information Officer (1996-Present); Manager, General Electric Corporation Corporate Information Services (1992-1996)



Dennis P. LeStrange	47	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	40	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)



Cathy L. Lewis	49	Senior Vice President, Marketing (2001-Present); Vice President, Color Marketing, Xerox Corporation (2001); Vice President, Strategic Marketing, Xerox Corporation (1998-2000); Vice President and General Manager, Xerox Production Systems Group, Xerox Corporation (1996-1997)



Beth B. Sexton	45	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	45	Controller (2000-Present); President, IKON France (1998-2000); Chief Financial Officer, IKON France (1996-1998)



William S. Urkiel	56	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)

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 18, 2001, there were approximately 14,244 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 49 of the 2001 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 2002. 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 and debt agreements.

Item 6. Selected Financial Data.

Information appearing under “Corporate Financial Summary” for fiscal 1997 through 2001 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 50 of the 2001 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 16 through 25 of the 2001 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 24 and 25 of the 2001 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 15 and pages 26 through 49 and the information appearing under “Quarterly Financial Summary” for fiscal 2001 and 2000 on page 50 of the 2001 Annual Report to Shareholders are incorporated herein by reference. The Report of PricewaterhouseCoopers LLP for the Company’s fiscal years ended September 30, 2001 and September 30, 2000 are attached hereto as Exhibit 99.1, and the report of Ernst & Young LLP for the Company’s fiscal year ended September 30, 1999 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.)

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 26, 2002 (the “2002 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 2002 Proxy Statement is incorporated herein by reference.

Item 11. Executive Compensation.

Information appearing under “Executive Compensation” in the 2002 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 2002 Proxy Statement is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions.

(No response to this item is required.)

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 19 thereof 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

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.

4.3

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.

4.4

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.

4.3

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

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.

10.6

Amendment Number 1 dated June 4, 1997 to the 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 4.2 to IOS Capital’s 2001 Form 10-K is incorporated herein by reference.

10.7

Amendment Number 2 dated June 12, 2001 to the 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 4.3 to IOS Capitals’s Form 8-K dated June 14, 2001 is incorporated herein by reference.

10.8

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.

10.9

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.

10.10

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.

10.11

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.

10.12

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.**

10.13

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.**

10.14

Annual Bonus Plan, filed as Exhibit 10.3 to IKON’s 1994 Form 10-K, is incorporated herein by reference.**

10.15

1986 Stock Option Plan, filed as Exhibit 10.6 to IKON’s 1995 Form 10-K is incorporated herein by reference.**

10.16

Amendment to 1986 Stock Option Plan filed as Exhibit 10.22 to IKON’s 1998 Form 10-K is incorporated herein by reference.**

10.17

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.**

10.18

Amendment to 1995 Stock Option Plan filed as Exhibit 10.23 to IKON’s 1998 Form 10-K is incorporated herein by reference.**

10.19

Non-Employee Directors Stock Option Plan, filed as Exhibit 10.31 to IKON’s 1997 Form 10-K is incorporated herein by reference.

10.20

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) is incorporated herein by reference.**

10.21

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) is incorporated herein by reference.**

10.22

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) is incorporated herein by reference.**

10.23

1980 Deferred Compensation Plan, filed as Exhibit 10.7 to IKON’s 1992 Form 10-K is incorporated herein by reference.**

10.24

Amendment dated January 1, 1997 to the 1980 Deferred Compensation Plan filed as Exhibit 10.37 to IKON’s 2000 Form 10-K is incorporated herein by reference.**

10.25

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.**

10.26

1985 Deferred Compensation Plan, filed as Exhibit 10.8 to IKON’s 1992 Form 10-K is incorporated herein by reference.**

10.27

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.**

10.28

Amendment dated January 1, 1997 to the 1985 Deferred Compensation Plan filed as Exhibit 10.41 to IKON’s 2000 Form 10-K is incorporated herein by reference.**

10.29

Amended and Restated 1994 Deferred Compensation Plan filed as Exhibit 10.45 to IKON’s 2000 Form 10-K is incorporated herein by reference.**

10.30

Amended and Restated Executive Deferred Compensation Plan filed as Exhibit 10.46 to IKON’s 2000 Form 10-K is incorporated herein by reference.**

10.31

Executive Employment Agreement for James J. Forese filed as Exhibit 10.33 to IKON’s 1999 Form 10-K is incorporated herein by reference.**

10.32

Executive Employment Contract for Don H. Liu filed as Exhibit 10.49 to IKON’s Form 10-Q for the quarter ended June 30, 2001 is incorporated herein by reference.**

10.33

Executive Employment Contract for William S. Urkiel filed as Exhibit 10.51 to IKON’s Form 10-Q for the quarter ended June 30, 2001 is incorporated herein by reference.**

10.34

Executive Employment Contract for David M. Gadra filed as Exhibit 10.52 to IKON’s 2000 Form 10-K is incorporated herein by reference.**

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

Employment Contract for Dennis LeStrange filed as Exhibit 10.53 to IKON’s 2000 Form 10-K is incorporated herein by reference.**

10.37

Transfer Agreement dated as of March 28, 2001 between IKON Funding-3, LLC and IOS Capital, Inc. filed as Exhibit 10.6 to IOS Capital’s 2001 Form 10-K is incorporated herein by reference.

10.38

Receivables Transfer Agreement dated as of March 28, 2001 among IOS Capital, Inc., IKON Funding-3, LLC and Twin Towers, Inc., Deutsche Bank AG, New York Branch, as agent and the several financial institutions party thereto from time to time, filed as Exhibit 10.5 to the IOS Capital 2001 Form 10-K is incorporated herein by reference.

10.39

Receivables Transfer Agreement entered September 19, 2000, among IKON Funding-2, LLC, IOS Capital, Inc., Park Avenue Receivables Corporation, the Chase Manhattan Bank and the several financial institutions a party thereto from time to time, filed as Exhibit 10.12 to the IKON 2000 Form 10-K is incorporated herein by reference.

10.40

Transfer Agreement dated as of September 19, 2000 among IKON Funding-2, LLC and IOS Capital, Inc., filed as Exhibit 10.13 to the IKON 2000 Form 10-K is incorporated herein by reference.

10.41

Receivables Transfer Agreement dated as of December 1, 1998 among IKON Funding-1, LLC, IOS Capital, Inc., Market Street Funding Corporation and PNC Bank, National Association, filed as Exhibit 10.9 to IKON’s 1998 Form 10-K is incorporated herein by reference.

10.42

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.

10.43

Indenture, dated as of April 1, 1999 among IKON Receivables, LLC, Harris Trust Savings Bank, as Trustee, and IOS Capital, Inc., as Servicer, filed as Exhibit 4.1 to IKON Receivables, LLC’s Form 8-K dated May 25, 1999 is incorporated herein by reference.

10.44

Indenture, dated as of October 1, 1999 among IKON Receivables, LLC, Harris Trust Savings Bank, as Trustee, and IOS Capital, Inc., as Servicer, filed as Exhibit 4.1 to IKON Receivables, LLC’s Form 8-K dated October 21, 1999 is incorporated herein by reference.

10.45

Indenture, dated as of June 1, 2000 among the Issuer, Bank One, NA, as Trustee, and IOS Capital Inc., as Servicer, filed as Exhibit 4.1 to IKON Receivables, LLC’s Current Report on Form 8-K dated June 16, 2001 is incorporated herein by reference.

10.46

Indenture, dated as of December 1, 2000 among the Issuer, The Chase Manhattan Bank, as Trustee, and IOS Capital, Inc., as Servicer, filed as Exhibit 4.1 to IKON Receivables, LLC’s Current Report on Form 8-K dated November 29, 2000 is incorporated herein by reference.

10.47

Indenture, dated as of June 1, 2001, among the Issuer, SunTrust Bank, as Trustee, and IOS Capital, Inc., as Servicer, filed as Exhibit 4.1 to IKON Receivables, LLC’s Current Report on Form 8-K dated June 16, 2001 is incorporated herein by reference.

10.48

Assignment and Servicing Agreement, dated as of April 1, 1999, among IKON Receivables, LLC, IKON Receivables-1, LLC, and IOS Capital, Inc., as Originator and Servicer, filed as Exhibit 10.1 to IKON Receivables, LLC’s Form 8-K dated May 25, 1999 is incorporated herein by reference.

10.49

Assignment and Servicing Agreement, dated as of October 1, 1999, among IKON Receivables, LLC, IKON Receivables-1, LLC, and IOS Capital, Inc., as Originator and Servicer, filed as Exhibit 10.1 to IKON Receivables, LLC’s Form 8-K dated October 21,1999 is incorporated herein by reference.

10.50

Assignment and Servicing Agreement, dated as of June 1, 2000, among the Issuer, IKON Receivables-1, LLC, and IOS Capital, Inc., as Originator and Servicer, filed as Exhibit 10.1 to IKON Receivables, LLC’s Current Report on Form 8-K dated June 16, 2001 is incorporated herein by reference.

10.51

Assignment and Servicing Agreement, dated as of December 1, 2000, among the Issuer, IKON Receivables-1, LLC, and IOS Capital, Inc., as Originator and Servicer, filed as Exhibit 10.1 to IKON Receivables, LLC’s Current Report on Form 8-K dated November 29, 2000 is incorporated herein by reference.

10.52

Assignment and Servicing Agreement, dated as of June 1, 2001, among the Issuer, IKON Receivables-1, LLC, and IOS, Capital, Inc. as Originator and Servicer, filed as Exhibit 10.1 to IKON Receivables, LLC’s Current Report on Form 8-K dated June 16, 2001 is incorporated herein by reference.

10.53

Indemnification Agreement, dated as of October 7, 1999, among Lehman Brothers, Chase Securities Inc., Deutsche Bank Securities Inc., PNC Capital Markets, Inc., as Underwriters, and Ambac Assurance Corporation, as Insurer, filed as Exhibit 10.2 to IKON Receivables, LLC’s Current Report Form 8-K dated October 21,1999 is incorporated herein by reference.

10.54

Indemnification Agreement, dated as of May 25, 1999, among Lehman Brothers, Chase Securities Inc., Deutsche Bank Securities Inc., PNC Capital Markets, Inc., as Underwriters, and Ambac Assurance Corporation, as Insurer, filed as Exhibit 10.2 to IKON Receivables, LLC’s Form 8-K dated May 25, 1999 is incorporated herein by reference.

10.55

Indemnification Agreement, dated June 2, 2000, among Chase Securities Inc., Banc of America Securities LLC, Deutsche Banc Alex. Brown, Lehman Brothers Inc., and PNC Capital Markets, Inc., as Underwriters (the “Underwriters”), and Ambac Assurance Corporation, as Insurer, filed as Exhibit 10.2 to IKON Receivables, LLC’s Current Report on Form 8-K dated June 16, 2001 is incorporated herein by reference.

10.56

Indemnification Agreement, dated December 7, 2000, among Chase Securities, Inc., Banc of America Securities LLC, Deutsche Banc Alex. Brown, Lehman Brothers, Inc. and PNC Capital Markets, Inc., as Underwriters (the “Underwriters”), and Ambac Assurance Corporation, as Insurer, filed as Exhibit 10.2 to IKON Receivables, LLC’s Current Report on Form 8-K dated November 29, 2000 is incorporated herein by reference.

10.57

Indemnification Agreement, dated June 28, 2001, among Deutsche Banc Alex. Brown Inc., Banc of America Securities LLC, J. P. Morgan Securities Inc., Lehman Brothers Inc. and PNC Capital Markets, Inc., as Underwriters (the “Underwriters”), and Ambac Assurance Corporation, as Insurer, filed as Exhibit 10.2 to IKON Receivables, LLC’s Current Report on Form 8-K dated June 16, 2001 is hereby incorporated herein by reference.

10.58

Insurance and Indemnity Agreement, dated as of May 25, 1999, among IOS Capital, Inc., as Originator and Servicer, IKON Receivables, LLC, IKON Receivables-1, LLC, and Ambac Assurance Corporation, as Insurer, filed as Exhibit 10.3 to IKON Receivables, LLC’s Form 8-K dated May 25, 1999 is incorporated herein by reference.

10.59

Insurance and Indemnity Agreement, dated as of October 7, 1999, among IOS Capital, Inc., as Originator and Servicer, IKON Receivables, LLC, IKON Receivables-1, LLC, and Ambac Assurance Corporation, as Insurer, filed as Exhibit 10.3 to IKON Receivables, LLC’s Form 8-K dated October 21,1999 is incorporated herein by reference.

10.60

Insurance and Indemnity Agreement, dated June 2, 2000, among IOS Capital, Inc., as Originator and Servicer, the Issuer, IKON Receivables-1, LLC, and Ambac Assurance Corporation, as Insurer, filed as Exhibit 10.3 to IKON Receivables, LLC’s Current Report on Form 8-K dated June 16, 2001 is incorporated herein by reference.

10.61

Insurance and Indemnity Agreement, dated December 7, 2000, among IOS Capital, Inc., as Originator and Servicer, the Issuer, IKON Receivables-1, LLC, and Ambac Assurance Corporation, as Insurer, filed as Exhibit 10.3 to IKON Receivables, LLC’s Current Report on Form 8-K dated November 29, 2000 is incorporated herein by reference.

10.62

Insurance and Indemnity Agreement, dated June 28, 2001, among IOS Capital, Inc., as Originator and Servicer, IKON Receivables, LLC, IKON Receivables-1, LLC, SunTrust Bank and Ambac Assurance Corporation, as Insurer, filed as Exhibit 10.3 to IKON Receivables, LLC’s Current Report on Form 8-K dated June 16, 2001 is incorporated herein by reference.

10.63

Schedule to ISDA Master Agreement (the “Schedule”), between The Chase Manhattan Bank and the Issuer, Credit Support Annex to the Schedule, between the Chase Manhattan Bank and the Issuer, Confirmation to the ISDA Master Agreement for the Class A-3 Notes, between the Chase Manhattan Bank and the Issuer, and Confirmation to the ISDA Master Agreement for the Class A-4 Notes, between the Chase Manhattan Bank and the Issuer, each dated as of June 2, 2000, filed as Exhibit 10.4 to IKON Receivables, LLC’s Current Report on Form 8-K dated June 16, 2001 is incorporated herein by reference.

10.64

Schedule to ISDA Master Agreement (the “Schedule”), between Lehman Brothers Financial Products, Inc. and the Issuer, Credit Support Annex to the Schedule, between Lehman Brothers Financial Products, Inc. and the Issuer, Confirmation to the ISDA Master Agreement for the Class 3b Notes, between Lehman Brothers Financial Products, Inc. and the Issuer, each dated as of October 7, 1999, filed as Exhibit 10.4 to IKON Receivables, LLC’s Current Report on Form 8-K dated October 21, 1999 is incorporated herein by reference.

10.65

Schedule to ISDA Master Agreement, between Lehman Brothers Special Financing Inc. and the Issuer and Confirmation to the ISDA Master Agreement, between Lehman Brothers Special Financing, Inc. and the Issuer, each dated as of December 7, 2000, filed as Exhibit 10.4 to IKON Receivables, LLC’s Current Report on Form 8-K dated November 29, 2000 is incorporated herein by reference.

10.66

Schedule to ISDA Master Agreement, between Deutsche Bank AG, New York Branch and the Issuer and Confirmations to the ISDA Master Agreement, between Deutsche Bank AG, New York Branch and the Issuer, each dated as of June 28, 2001, filed as Exhibit 10.4 to IKON Receivables, LLC’s Current Report on Form 8-K dated November 29, 2000 is incorporated herein by reference.

10.67

First Amendment dated September 10, 1999 to Transfer Agreement dated as of December 1, 1998 filed as Exhibit 10.13 to IKON’s 1999 Form 10-K is incorporated herein by reference.

10.68

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.

10.69

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.

10.70

Asset Backed Loan Agreement dated March 30, 2001 by and among Rockford, Inc., as Borrower, IKON Capital PLC, as Originator and Servicer, Park Avenue Receivables Corporation, as Conduit Lender, certain APA Banks and the Chase Manhattan Bank, as Funding Agent.

10.71

IKON Loan Agreement dated March 30, 2001 between Rockford, Inc., as Lender, IKON Office Solutions Dublin Limited and IKON Capital PLC, as Borrowers, and the Chase Manhattan Bank, as Funding Agent.

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.

Portions of IKON’s Annual Report to Shareholders for the fiscal year ended September 30, 2001 (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).

Subsidiaries of IKON.

23.1

Consent of PricewaterhouseCoopers LLP.

23.2

Consent of Ernst & Young LLP.

Powers of Attorney; certified resolution re: Powers of Attorney.

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 August 3, 2001, the Company filed a Current Report on Form 8-K to file, under Item 5 of the Form, a press release concerning earnings for the third quarter of fiscal 2001.

(d) The response to this portion of Item 14 is contained on page 19 of this report.

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 2001 Annual Report to Shareholders are incorporated by reference in Item 8 of Part II of this report:

Consolidated Statements of Income

—Fiscal years ended September 30, 2001, September 30, 2000 and September 30, 1999

Consolidated Balance Sheets

—September 30, 2001 and September 30, 2000

Consolidated Statements of Cash Flows

—Fiscal years ended September 30, 2001, September 30, 2000 and September 30, 1999

Consolidated Statements of Changes in Shareholders’ Equity

—Fiscal years ended September 30, 2001, September 30, 2000 and September 30, 1999

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.

IKON OFFICE SOLUTIONS, INC.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

Col. A	Col. B	Col. C			Col. D		Col. E
Description	Balance at Beginning of Period	Charged to Costs and Expenses	Charged to Other Accounts		Deductions		Balance at End of Period
Year Ended September 30, 2001
Allowance for doubtful accounts	$35,322	$ 7,758			$19,570	(2)	$23,510
Lease default reserve	74,792	66,631			71,639	(2)	69,784
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

(1)	Represents beginning balances of acquired companies.

(2)	Accounts written off during year, net of recoveries.

(3)	Represents portion related to assets sold.

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, 2001 to be signed on its behalf by the undersigned, thereunto duly authorized.

IKON OFFICE SOLUTIONS , INC .

/s/ WILLIAM S. URKIEL

By:

(William S. Urkiel)

Senior Vice President and

Chief Financial Officer

Signature		Title



/s/ JAMES J. FORESE (James J. Forese)		Chairman and Chief Executive Officer (Principal Executive Officer)



/s/ WILLIAM S. URKIEL William S. Urkiel		Senior Vice President and Chief Financial Officer (Principal Financial Officer)



/s/ CARLYLE S. SINGER (Carlyle S. Singer)		Controller (Principal Accounting Officer)



/s/ JUDITH M. BELL (Judith M. Bell)		Director



/s/ JAMES R. BIRLE (James R. Birle)		Director



/s/ PHILIP E. CUSHING (Philip E. Cushing)		Director



/s/ ROBERT M. FUREK Robert M. Furek		Director



/s/ THOMAS R. GIBSON (Thomas R. Gibson)		Director



/s/ RICHARD A. JALKUT (Richard A. Jalkut)		Director



/s/ ARTHUR E. JOHNSON (Arthur E. Johnson)		Director



/s/ KURT M. LANDGRAF (KURT M. LANDGRAF )		Director



/s/ MARILYN WARE (MARILYN WARE )		Director

*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 21, 2001

Don H. Liu

Ikon Office Solutions, Inc.

P.O. Box 834

Valley Forge, Pennsylvania 19482-0834

(610) 296-8000

Index to Exhibits

10.76

Asset Backed Loan Agreement dated March 30, 2001 by and among Rockford, Inc., as Borrower, IKON Capital PLC, as Originator and Servicer, Park Avenue Receivables Corporation, as Conduit Lender, Certain APA Banks and the Chase Manhattan Bank, as Funding Agent.

10.77

IKON Loan Agreement dated March 30, 2001 between Rockford, Inc., as Lender, as Lender, IKON Office Solutions Dublin Limited and IKON Capital PLC, as Borrowers, and the Chase Manhattan Bank, as Funding Agent.

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.

Subsidiaries of IKON.

23.1

Consent of PricewaterhouseCoopers LLP.

23.2

Consent of Ernst & Young LLP.

Powers of Attorney; certified resolution re: Powers of Attorney.

99.1

Report of PricewaterhouseCoopers LLP.

99.2

Report of Ernst & Young LLP.

ARTICLE I	DEFINITIONS	1
SECTION 1.1	Incorporation by Reference	1
SECTION 1.2	Other Defined Terms	1
ARTICLE II	PURCHASE COMMITMENT	7
SECTION 2.1	Liquidity Purchases	7
SECTION 2.2	Several Commitments of the APA Banks	8
SECTION 2.3	Nonrecourse Nature of Transactions	9
SECTION 2.4	Payments; Indemnity	9
SECTION 2.5	Reduction of Commitment	10
ARTICLE III	REPRESENTATIONS AND WARRANTIES	10
SECTION 3.1	PARCO Disclaimer of Representations and Warranties	10
SECTION 3.2	Representations and Warranties of the APA Banks	10
ARTICLE IV	THE FUNDING AGENT	11
SECTION 4.1	Appointment	11
SECTION 4.2	Delegation of Duties	11
SECTION 4.3	Exculpatory Provisions	11
SECTION 4.4	Reliance by Funding Agent	12
SECTION 4.5	Notices	12
SECTION 4.6	Non-reliance on the Funding Agent	12
SECTION 4.7	Indemnification	12
SECTION 4.8	The Funding Agent in Its Individual Capacity	13
SECTION 4.9	Successor Funding Agent	13
SECTION 4.10	Chase Conflict Waiver	13
ARTICLE V	MISCELLANEOUS	13
SECTION 5.1	Waivers; Amendments, etc.	13
SECTION 5.2	Notices	14
SECTION 5.3	Governing Law; Submission to Jurisdiction	14
SECTION 5.4	Severability; Counterparts; Waiver of Setoff	14
SECTION 5.5	Successors and Assigns: Participations; Assignments	14
SECTION 5.6	Effectiveness of this Agreement	16
SECTION 5.7	No Petition	16
SECTION 5.8	Waiver of Trial by Jury	16
SECTION 5.9	Limited Recourse	16
SECTION 5.10	Liability of Funding Agent	17
EXHIBIT A FORM OF TRANSFER SUPPLEMENT		19
EXHIBIT B NOTICE ADDRESSES		24

OC=		the product of (a) the APA Bank Purchase Percentage for such Purchase Date and (b) all Collections received by the Originator and/or the Servicer or the Borrower during the collection period covered by the most recent Servicer Report which are due and owing to the Funding Agent, PARCO and/or the APA Banks under the Asset Backed Loan Agreement and which have not yet been remitted to the Funding Agent; and

NDR=		the product of (a) the APA Bank Purchase Percentage for such Purchase Date and (b) the sum of (i) the aggregate Outstanding Balance of all Funded Receivables plus (ii) to the extent not included in OC above, all amounts payable by the Borrower and/or the Originator pursuant to Section 2.3(c)(i) and (ii) of the Asset Backed Loan Agreement minus (iii) the aggregate Outstanding Balance of all Funded Receivables that are Defaulted Receivables.

	PARK AVENUE RECEIVABLES CORPORATION


	By:

			Name: ANDREW L. STIDD
			Title: PRESIDENT


	THE CHASE MANHATTAN BANK, as APA Bank


	By:

			Name: BRADLEY S. SCHWARTZ
			Title: MANAGING DIRECTOR


	THE CHASE MANHATTAN BANK, as the Funding Agent


	By:

			Name: LARA GRAFF
			Title: VICE PRESIDENT

	[SELLER]



	By:

			Name:
			Title:


	[PURCHASER]







	By:

			Name:
			Title:

Seller	Commitment [existing]	Commitment [revised]	Pro Rata Share of APA Bank Net Investment	Pro Rata Share






Purchaser	Commitment [initial]		Pro Rata Share of APA Bank Net Investment	Pro Rata Share

NDR=		the sum of (i) the aggregate Outstanding Balance of all Funded Receivables plus (ii) to the extent not included in OC above, all amounts payable by the Borrower and/or the Originator pursuant to Section 2.3(c)(i) and (ii) of the Asset Backed Loan Agreement minus (iii) the aggregate Outstanding Balance of all Funded Receivables that are Defaulted Receivables.

Each of the foregoing shall be determined from the Servicer Report delivered to the Funding Agent on or immediately prior to the date of the occurrence of such Trigger Event.


TO:		___________________, Seller
		___________________
		___________________

TO:		___________________, Purchaser
		___________________
		___________________

	Very truly yours,

	THE CHASE MANHATTAN BANK,
	as Funding Agent


	By:

		Authorized Signatory

If to PARCO

Park Avenue Receivables Corporation
c/o Global Securitization Services, LLC
114 West 47th Street, Suite 1715
New York, New York 10036
Attention:	President
Telephone:	(212) 302-5151
Telecopy:	(212) 302-8767

If to the Funding Agent:

The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention:	Lara Graff
	CMFS - PARCO
Telephone:	(212) 946-3748
Telecopy:	(212) 946-8098

If to the APA Bank:

The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention:	Bradley Schwartz
Telephone:	(212) 834-5144
Telecopy:	(212) 834-6562

(a)	with respect to any CP Tranche the aggregate of:

	(i)	in relation to any Commercial Paper issued at a discount to fund such CP Tranche, the nominal amount of such Commercial Paper; and

	(ii)	in relation to any interest bearing Commercial Paper issued to fund such CP Tranche, the aggregate of the nominal amount of such Commercial Paper and the interest accrued in respect of such Commercial Paper in respect of the relevant CP Tranche Period;

(b)	with respect to any Eurosterling Tranche the aggregate of:

	(i)	the amount of the relevant Eurosterling Tranche or, as the case may be, Eurodollar Tranche advanced by the APA Banks pursuant to the Asset Backed Loan Agreement to fund such Eurosterling Tranche; and

	(ii)	the amount of interest accrued in respect of such Eurosterling Tranche or, as the case may be, Eurodollar Tranche in accordance with the Asset Backed Loan Agreement and attributable to the relevant Eurosterling Tranche Period hereunder;

(c)	with respect to any Base Rate Tranche, the aggregate of:

	(i)	the amount of the relevant Base Rate Tranche advanced by the APA Banks pursuant to the Asset Backed Loan Agreement to fund such Base Rate Tranche (the “APA Base Rate Tranche”); and

	(ii)	the amount of interest accrued in respect of such APA Base Rate Tranche and attributable to the relevant Base Rate Tranche Period.

	Face Amount	-		Net Proceeds
	Applicable Forward Rate			Applicable Spot Rate

	(1--	Net Proceeds x Applicable Spot Rate	) x	n	x 100
		Face Amount x Applicable Forward Rate		365

		provided, however, that (i) the amount of the Incremental Borrowing shall not exceed the amount of the Sterling Equivalent of the corresponding Incremental Borrowing under the Asset Backed Loan Agreement, (ii) after giving effect to such Incremental Borrowing and the advance to the Borrower of such Loan Amount, the amount of the Outstanding Loans shall not exceed the Funding Limit; and (iii) provided, further, that after giving effect to such Incremental Borrowing and the advance to a Borrower of such Loan Amount, the representations and warranties set forth in Section 4.01 shall be true and correct as of the date of such Incremental Borrowing and the advance to a Borrower of such Loan Amount.

	(ii)	The relevant Borrower shall deliver to the Lender by telefax (which telefax the Borrower shall confirm by telephone to the Lender promptly thereafter) a duly completed Notice of Borrowing in respect of each Incremental Borrowing at least three (3) Business Days prior to the proposed date of any Incremental Borrowing. Each such notice shall specify (x) the Loan Amount (which shall be at least the Sterling Equivalent of $1,000,000 or integral multiples of the Sterling Equivalent of $100,000 in excess thereof) or, to the extent that the then available unused portion of the Funding Limit is less than such amount, such lesser amount equal to such available portion of the Funding Limit; (y) the desired date of such Incremental Borrowing, which shall be a Business Day; and (z) the desired Tranche Period(s) and allocations of the Outstanding Loans of such Incremental Borrowing thereto as required by Section 2.13 (each, a “Notice of Borrowing”). The Borrower shall be limited to a maximum in aggregate of one Incremental Borrowing in any single calendar month, without prior consent of the Funding Agent. Each Incremental Borrowing shall be subject to a condition precedent that the Originator shall have delivered to the Funding Agent in form and substance satisfactory to it, a completed Servicer Report with respect to the prior Business Day, together with such other additional information as the Funding Agent, on behalf of the Lender, may reasonably request. The Lender will promptly notify by telephone, confirmed by telecopy or telefax, the Funding Agent of such receipt of any Notice of Borrowing and the Loan Amount.

	(iii)	Each notice of proposed Incremental Borrowing shall be irrevocable and binding on the Borrowers, and the Borrowers shall, indemnify the Lender against any loss or expense incurred by the Lender, either directly or indirectly, as a result of any failure by the Borrower to complete such Incremental Borrowing, including, without limitation, any loss or expense incurred by the Lender, either directly or indirectly, by reason of the liquidation or reemployment of funds acquired by the Lender (including, without limitation, funds obtained by issuing Commercial Paper or promissory notes, obtaining deposits as loans from third parties and reemployment of funds), to fund such Incremental Borrowing.

	(iv)	Each Borrower shall execute a Revolving Credit Note for the benefit of the Lender. The Loans made by the Lender shall be evidenced by the Revolving Credit Note payable to the order of such Lender. Upon any increase in the Funding Limit of the Lender pursuant to Section 2.10 hereof, the Borrowers will immediately deliver to such Lender a new

		Revolving Credit Note, having a maximum principal amount equal to the amount of such Funding Limit as so increased in exchange for the Revolving Credit Note of the Lender outstanding prior to such increase.

(v)		On the Closing Date, the Lender, shall deliver written confirmation to the Borrowers of the Loan Amount, the Tranche Period(s) and the Interest Rate(s) relating to such Loan. Upon receipt of such confirmation, the Borrowers shall deliver to the Lender, the Loan Certificate in the form of Exhibit D hereto (the “Loan Certificate”). The Lender shall indicate the amount of the Incremental Borrowing together with the date thereof on the grid attached to the Loan Certificate. On the date of each subsequent Incremental Borrowing the Lender shall send such confirmation to the Borrowers, of the Loan Amount, the Tranche Period(s), the Loan Date and the Interest Rate(s) applicable to such Incremental Borrowing. The Lender, shall indicate the amount of the Incremental Borrowing together with the date thereof as well as any decrease in the amount of the Outstanding Loans on the Loan Certificate. The Revolving Credit Note and the Loan Certificate shall evidence the Incremental Borrowings. On the day of an Incremental Borrowing, the Lender shall make available to the relevant Borrower’s account at the location indicated in Section 6.3 hereof, in immediately available funds, an amount equal to the Loan Amount for such Incremental Borrowing.

		repossessed Equipment or services or any cash discount or other adjustment made by the Originator, or any setoff or dispute between the Originator and an Obligor due to a claim arising out of the same or any other transaction, the Servicer shall be deemed to have received on such day a Collection of such Funded Receivable in the amount of such reduction or adjustment. If the Originator is not the Servicer, the Originator shall pay to the Servicer on or prior to the next Settlement Date all amounts deemed to have been received pursuant to this subsection;

	(ii)	Upon discovery by the Originator or the Lender or the Funding Agent of a breach of any of the representations and warranties made or deemed made by the Originator in Section 4.01(h) with respect to any Funded Receivable, such party shall give prompt written notice thereof to the other parties, as soon as practicable and in any event within three Business Days following such discovery. The Servicer shall be deemed to have received a Collection in full of such Funded Receivable, and all other Receivables relating to the same Contract, and make available to the Lender on the next succeeding Settlement Date an amount equal to the Outstanding Balance of such Funded Receivable plus Interest accrued and to accrue thereon through the end of the then current Tranche Period. If the Originator is not the Servicer, the Originator shall pay to the Servicer on or prior to the next Settlement Date the amount required to be paid pursuant to this subsection; and

	(iii)	if and to the extent the Funding Agent or the Lender shall be required for any reason to pay over to an Obligor any amount received on its behalf hereunder, such amount shall be deemed not to have been so received but rather to have been retained by the Originator and, accordingly, the Funding Agent or the Lender, as the case may be, shall have a claim against the Originator for such amount, payable when and to the extent that any distribution from or on behalf of such Obligor is made in respect thereof.

	(i)	does or shall subject such Affected Person to any tax of any kind whatsoever with respect to this Agreement or any other Transaction Document or change the basis of taxation of payments to the Lender on account of Collections, Interest or any other amounts payable hereunder (excluding taxes imposed on the income, profit or gains of such Affected Person, and franchise taxes imposed on such Affected Person, by the jurisdiction under the laws of which such Affected Person is organized or a political subdivision thereof); or

	(ii)	does or shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilities in or for the account of, purchases, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Affected Person;

	and the result of any of the foregoing is to increase the cost to such Affected Person of
performing its obligations under the relevant Transaction Document or to reduce any amount receivable hereunder, then, in any such case, the Borrowers shall on a joint and several basis pay to the Lender, upon its demand, any additional amounts necessary to compensate such Affected Person for such additional cost or reduced amount receivable. All such amounts shall be payable as incurred. A certificate from the Lender or the Funding Agent, as the case may be, to the Borrowers certifying, in reasonably specific detail, the basis for, calculation of, and amount of such additional costs shall be conclusive in the absence of manifest error.

	(i)	The representations and warranties contained in Section 4.01 (and so that for this purpose Section 4.01(e) shall refer to the then latest financial statement delivered pursuant to Section 5.01(j)(ii)) are correct on and as of the date of such Advance as though made on and as of such date; and

	(ii)	No event has occurred and is continuing, or would result from such Advance, that constitutes an Event of Termination or would constitute an Incipient Event of Termination;

	(i)	Each Borrower will as soon as available and in any event within 60 days after the end of the first three quarters of each fiscal year of such Borrower provide to the Lender its balance sheet as of the end of such quarter and its statement of income and retained earnings for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, certified by the chief financial officer of such Borrower;

	(ii)	The Originator will, as soon as available and in any event within 120 days after the end of each fiscal year of the Originator, provide to the Lender a copy of the annual report for such year for IKON Office Solutions, Inc. containing financial statements for such year audited by PricewaterhouseCoopers, LLP or other independent public accountants reasonably acceptable to the Funding Agent;

	(iii)	Each Borrower will as soon as possible and in any event within five days after the occurrence of each Event of Termination or Incipient Event of Termination, provide to the Lender a statement of the chief financial officer of such Borrower setting forth details of such Event of Termination or Incipient Event of Termination and the action that such Borrower has taken and proposes to take with respect thereto;

	(iv)	Each Borrower will promptly after the sending or filing thereof, provide to the Lender copies of all reports that such Borrower sends generally to all of its secured creditors;

	(v)	Each Borrower will, at least ten Business Days prior to any change in its name, provide to the Lender a notice setting forth the new name and the effective date thereof;

	(vi)	The Originator will, concurrently with the delivery of each Servicer Report by the Servicer, provide to the Lender a statement as to whether or not all of the Receivables under all Contracts arising during the immediately preceding month have been funded by the Lender and, if less than all of such Receivables have been so funded, a summary of those Receivables not so funded; and

	(vii)	Each Borrower will provide to the Lender such other information respecting the Funded Receivables or the condition or operations, financial or otherwise, of such Borrower as the Lender may from time to time reasonably request.

BORROWER:	IKON OFFICE SOLUTIONS DUBLIN LIMITED
	By:

	Name: PAUL SMITHWICK
	Title: DIRECTOR

	Chase Manhattan House
	International Financial Services Centre
	Dublin 1
	Ireland
	Attention:	Shona Cullen
	Telephone:	353 (1) 612 3202
	Telecopy:	353 (1) 612 5774

	for the purposes of notices, with a copy to:

	IKON Office Solutions, Inc.
	70 Valley Stream Parkway
	Malvern, PA 19355
	USA

	Attention: Jack Quinn

BORROWER:	IKON CAPITAL PLC

	By:

	Name: K.P. MARSHALL
	Title: DIRECTOR

	IKON Capital PLC
	Ikon House
	Ullswater Crescent
	Coulsdon
	Surrey CR5 2EQ
	Attention:	Philip Marshall
	Telephone:	44 (0) 20 8668 7474
	Telecopy:	44 (0) 20 8668 8877

	with a copy to:

	IKON Office Solutions, Inc.
	70 Valley Stream Parkway
	Malvern, PA 19355
	USA
	Attention:		Jack Quinn
	Telephone:
	Telecopy:

LENDER:	ROCHFORD, INC.

	By:	J.H. Management Corporation, its Manager

	By:

	Name:	R DOUGLAS DONALDSON
	Title:	TREASURER

	Rochford, Inc.
	c/o J.H. Management Corporation
	PO Box 4024
	One International Place
	Room 569
	Boston, Massachusetts 02110

	Attention:	R Douglas Donaldson
	Telephone:	(617) 951 7690
	Telecopy:	(617) 951 7050

	THE CHASE MANHATTAN BANK
	450 West 33rd Street
	15th Floor
	New York, NY 10001
	Attention:		Lara Graff
	CFMS-PARCO Manager
	Telephone:		(212) 946_3748
	Telecopy:		(212) 946_8098

	with a copy to:

	CHASE SECURITIES INC.
	270 Park Avenue, 7th Floor
	New York, NY 10017
	Attention:		Paterno Luzano
	Telephone:		(212) 834-5381
	Telecopy:		(212) 834-6562

Date of Loan	Principal Amount of Loan	Payments or Prepayments of Principal	Balance Outstanding	Notation Made By

DATED [ ]

By:

Name:

Title:	Director/Company Secretary






By:

Name:

Title:	Director/Company Secretary

	Fiscal Year Ended September 30


	2001		2000		1999		1998		1997


Earnings
Income (loss) from continuing operations	$14,005		$25,960		$33,836		$(83,050)		$122,362
Add:
Provision for income taxes	53,791		55,873		45,555		8,863		90,751
Fixed charges	287,383		272,439		230,375		228,365		192,021



Earnings, as adjusted (A)	355,179		354,272		309,766		154,178		405,134


Fixed charges
Other interest expense including interest on capital leases	246,892		237,521		197,901		199,816		146,117
Estimated interest component of rental expense	40,491		34,918		32,474		28,549		27,203
Prepayment penalties on early extiguishment of debt	-		-		-		-		18,701



Total fixed charges (B)	$287,383		$272,439		$230,375		$228,365		$192,021


Ratio of earnings to fixed charges
(A) divided by (B)	1.2	(1)	1.3	(2)	1.3	(3)	0.7	(4)	2.1	(5)



(1)	Excluding the effect of restructuring and asset impairment charges, reserve adjustments related primarily to the Company’s exit of telephony operations, gain from discontinued operations and a tax reserve adjustment related to the Company’s use of leveraged corporate owned life insurance program, the ratio of earnings to fixed charges for the fiscal year ended September 31, 2001 is 1.5.

(2)	Excluding the effect of the gain on sale of investment, extraordinary gain from the early extinguishment of debt, shareholder litigation insurance proceeds, restructuring and asset impairment charge, and benefit from discontinued operations, the ratio of earnings to fixed charges for the fiscal year ended September 30, 2000 is 1.6.

(3)	Excluding the effect of the asset securitization gain and the shareholder litigation settlement charge, the ratio of earnings to fixed charges for the fiscal year ended September 30, 1999 is 1.7.

(4)	Excluding the effect of transformation costs and the loss from asset impairment, the ratio of earnings to fixed charges for the fiscal year ended September 30, 1998 is 1.1.

(5)	Excluding the effect of transformation costs, the ratio of earnings to fixed charges for the fiscal year ended September 30, 1997 is 2.8.

(1)	Excluding the effect of restructuring and asset impairment charges, reserve adjustments related primarily to the Company’s exit of telephony operations, gain from discontinued operations and a tax reserve adjustment related to the Company’s use of leveraged corporate owned life insurance program, the ratio of earnings to fixed charges (excluding captive finance subsidiaries) for the fiscal year ended September 30, 2001 is 0.9.

(2)	Excluding the effect of the gain on sale of investment, extraordinary gain from the early extinguishment of debt, shareholder litigation insurance proceeds, restructuring and asset impairment charge, and benefit from discontinued operations, the ratio of earnings to fixed charges (excluding captive finance subsidiaries) for the fiscal year ended September 30, 2000 is 1.8.

(3)	Excluding the effect of the shareholder litigation settlement charge, the ratio of earnings to fixed charges (excluding captive finance subsidiaries) for the fiscal year ended September 30, 1999 is 1.4.

(4)	Excluding the effect of transformation costs and the loss from asset impairment, the ratio of earnings to fixed charges (excluding captive finance subsidiaries) for the fiscal year ended September 30, 1998 is 0.2.

(5)	Excluding the effect of transformation costs, the ratio of earnings to fixed charges (excluding captive finance subsidiaries)for the fiscal year ended September 30, 1997 is 4.0.

	Financials

Ø	15	Management's Responsibility for Financial Reporting

	15	Report of Independent Accountants

	16	Financial Review

	26	Consolidated Financial Statements

	30	Notes to Consolidated Financial Statements

	50	Quarterly Financial Summary

	51	Corporate Financial Summary

Type of Charge						Fiscal 2001 Charge		Fiscal 2000 Charge

Restructuring Charge:
Severance						$ 26,500		$ 20,697
Contractual commitments						8,000		30,552

Total Restructuring Charge						34,500		51,249


Asset Impairment Charge:
Fixed assets						6,906		15,039
Goodwill and intangibles						22,176		38,880

Total Asset Impairment Charge						29,082		53,919


Total						$ 63,582		$ 105,168


The employees and locations affected by the charges described above were as follows:


			Employees Affected	Employee Terminations		Adjustment to Fiscal 2000 Charge		Remaining Employees to be Terminated

Fiscal 2001 terminations			1,600					1,600
Fiscal 2000 terminations			2,318	(1,780	)	(538	)	—


			Sites Affected	Sites Closed		Adjustment to Fiscal 2000 Charge		Remaining Sites to be Closed

Fiscal 2001 closures			24					24
Fiscal 2000 closures			29	(27	)	(2	)	—

The following presents a reconciliation of the original restructuring components of the Fiscal 2001 Charge and Fiscal 2000 Charge to the balance remaining at September 30, 2001, which is included in other accrued expenses on the consolidated balance sheet:


				Fiscal 2001 Charge		Payments Fiscal 2001		Balance September 30, 2001

Severance				$ 26,500		—		$ 26,500
Contractual commitments				8,000		—		8,000

Total				$ 34,500		—		$ 34,500


	Fiscal 2000 Charge	Payments Fiscal 2000	Adjustment to Fiscal 2000 Charge	Balance September 30, 2000		Payments Fiscal 2001		Balance September 30, 2001

Severance	$ 22,481	$(10,616)	$ (1,784)	$ 10,081		$ (8,058)		$ 2,023
Contractual commitments	44,729	(12,827)	(14,177)	17,725		(7,699)		10,026

Total	$ 67,210	$(23,443)	$(15,961)	$ 27,806		$(15,757)		$ 12,049




IKON 2001 Annual Report

The table below presents principal amounts and related average interest rates by year of maturity for our long-term debt obligations as of September 30, 2001:


	2002		2003		2004		2005		2006		Thereafter

Long-term debt
Fixed rate	$ 17,643		$ 5,827		$ 2,378		$125,806		$55,248		$410,349
Average interest rate	8.0	%	9.7	%	9.5	%	6.8	%	7.2	%	6.9	%

Long-term debt, finance subsidiaries
Fixed rate	$888,393		$183,326		$300,393		$ 13,692		$ 3,091		$ 82
Average interest rate	5.4	%	6.6	%	9.2	%	6.7	%	6.7	%	6.5	%
Variable rate	$341,238		$434,880		$280,156		$135,344		$15,144
Average interest rate	7.0	%	6.3	%	6.3	%	6.0	%	5.4	%

Interest rate derivative financial
instruments related to debt
Interest rate swaps:
Pay fixed/receive variable	$341,238		$434,880		$280,156		$135,344		$15,144
Average pay rate	6.9	%	6.2	%	6.2	%	5.9	%	5.4	%
Average receive rate	3.6	%	3.6	%	3.7	%	3.7	%	3.8	%

Notional Amount	Fixed Interest Rate	Variable Interest Rate	Fair Value		Maturity Date

$370,706	6.4750%	LIBOR	$(19,060	)	07/15/07
$260,000	4.8250%	LIBOR + 23 bp	$ (6,004	)	01/15/06
$219,939	7.8020%	LIBOR + 19 bp	$ (9,357	)	03/15/04
$145,407	6.2700%	LIBOR	$ (3,382	)	08/15/03
$126,200	5.4350%	LIBOR + 26 bp	$ (4,715	)	10/15/08
$ 84,510	7.8200%	LIBOR + 23 bp	$ (8,104	)	09/15/06

	Fiscal Year Ended September 30

(in thousands, except per share data)		2001		2000			1999

Revenues
Net sales	$	2,634,492	$	2,794,882		$	2,778,256
Service and rentals		2,255,293		2,306,783			2,360,274
Finance income		383,694		345,280			297,072

		5,273,479		5,446,945			5,435,602

Costs and Expenses
Cost of goods sold		1,714,439		1,864,318			1,861,024
Service and rental costs		1,364,920		1,393,093			1,373,097
Finance interest expense		177,519		167,700			126,676
Selling and administrative		1,815,850		1,785,751			1,823,083
Restructuring charges, net		34,500		51,249
Asset impairment		29,082		53,919
Shareholder litigation (insurance proceeds) settlement				(17,000	)		101,106

		5,136,310		5,299,030			5,284,986


Operating Income		137,169		147,915			150,616
Gain on Sale of Investment				3,739
Interest Expense		69,373		69,821			71,225

Income From Continuing Operations
Before Taxes on Income and Extraordinary Gain		67,796		81,833			79,391
Taxes on Income		53,791		55,873			45,555

Income From Continuing Operations
Before Extraordinary Gain		14,005		25,960			33,836
Discontinued Operations, net of taxes of: 2001 – $942;
2000 – $1,111		1,200		1,415

Income Before Extraordinary Gain		15,205		27,375			33,836
Extraordinary Gain from Early Extinguishment of Debt,
net of taxes of $1,342				1,707

Net Income	$	15,205	$	29,082		$	33,836


Basic and Diluted Earnings Per Common Share
Continuing Operations	$	0.10	$	0.18		$	0.23
Discontinued Operations		0.01		0.01
Extraordinary Gain				0.01

Net Income	$	0.11	$	0.20		$	0.23


Cash Dividends Per Common Share	$	0.16	$	0.16		$	0.16