PHILADELPHIA--May 20, 2004-- More top-tier customers are making Xerox Corporation their chosen technology and services partner. Revenue and market share are increasing in Xerox's targeted growth areas. Combine those key metrics with continued cost discipline, excellent cash flow and declining debt, and "everywhere we look, the results are positive," Anne M. Mulcahy, Xerox chairman and chief executive officer, told shareholders at the company's annual meeting here. "Our business model has been tested, and it is producing consistently predictable and improving results." Xerox earned $360 million on more than $15.7 billion in revenue in 2003, while generating $1.9 billion in operating cash flow and reducing debt by $3 billion. At the same time, the company has continued to invest in key market segments - digital office, digital production, color and services - and "these investments are paying off." More than half of Xerox's revenue last year - and 55 percent in the first quarter of this year - came from offerings that were introduced in the past two years. Mulcahy noted customer relationships with firms like Cingular, Consolidated Graphics, Citigroup and Accenture, who rely on Xerox's high-value systems and services. The combined offerings provide smart document management that frees people to spend more time on content and less time dealing with technology issues. With Accenture, Xerox Europe is working to convert 56 million Department of Health documents into digital form, then loading them into a customized retrieval system to make it easier for workers to securely retain and access critical documents. In addition, new technology is helping to drive share gains in key markets. For example, last year the company gained 2 points of share in the United States in color digital copiers and multifunction devices and gained 1 share point in black-and-white. In Europe, Xerox is No. 1 in office color copiers and MFD's with 34 percent share of the market. Xerox remains the No. 1 provider of digital production printing and publishing systems in both color and black-and-white, in the U.S. and Europe. According to full-year 2003 market share data, Xerox holds a 51 percent share of the production color market in the U.S. "We are driving the 'New Business of Printing,' " Mulcahy said. "Increasingly, our commercial print customers are relying on the Xerox DocuColor iGen3 Digital Production Press to fuel their business growth." The chairman also showcased Xerox's newest television commercials, created to support three growth areas where Xerox has "a huge opportunity": color printing, printing on-demand, and digital archiving services. The "Fastest Under" commercial highlights the Phaser 8400 color printer, which starts at $999 and is the industry's only printer to produce 24 color or black-and-white pages per minute. "The Classroom" demonstrates the value of on-demand book publishing, which is made possible by Xerox's book-printing systems and solutions. The new "Corporate Retreat" commercial delivers the message that having an online document system can prove vital in the event that hardcopy files are damaged or destroyed. "We have a clear, achievable growth strategy, one that is delivering the results you deserve," Mulcahy said. "None of us at Xerox wants to be 'good enough.' We are on the road whose destination is nothing short of greatness." Also at the annual meeting, shareholders approved the election of 11 members of the Xerox board of directors: Glenn A. Britt, Richard J. Harrington, William Curt Hunter, Vernon E. Jordan Jr., Hilmar Kopper, Ralph S. Larsen, Anne M. Mulcahy, N.J. Nicholas Jr., John E. Pepper, Ann N. Reese, and Stephen Robert. Over 90 percent of the Xerox board is considered independent. Shareholders also ratified the selection of PricewaterhouseCoopers LLP as the company's independent auditors for 2004; approved the adoption of the company's 2004 performance incentive plan; and approved the 2004 equity compensation plan for non-employee directors. In other board actions today, a dividend of $1.5625 was declared on the Series B convertible preferred stock outstanding on July 1, issued in connection with the Xerox employee stock ownership program. The board also declared a dividend of $1.5625 per share on the 6.25% Series C mandatory convertible preferred stock issued last June. The dividends are payable July 1 to shareholders of record June 11. To view the Xerox 2003 Annual Report, visit www.xerox.com/investor.