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Xerox CEO Mulcahy Tells Shareholders: No Question Xerox Will Succeed

Press release from the issuing company

STAMFORD, Conn.-Aug. 28, 2001--After highlighting the aggressive actions taken over the past 10 months to restore financial strength, reduce costs and solidify core technologies and services, Xerox Corporation's chief executive told shareholders today that Xerox is being put back on the path to profitability and success. Since launching Xerox's turnaround strategy in October, president and CEO Anne Mulcahy said that Xerox has "made good progress'' and is streamlining the business to focus on value-added, service-related growth opportunities in both the production and office printing markets. "We have met our commitments. We have sold assets, strengthened our liquidity and are restoring balance sheet strength. We are dramatically reducing costs. We are putting our operations on a sound and disciplined footing,'' said Mulcahy, at the company's annual meeting here. "We know that we have a long way to go, but there is no question we will succeed. We are well on our way.'' Mulcahy noted the progress Xerox has made in restoring its financial strength through the sale of more than $2 billion in assets. The company finished the second quarter with $2.2 billion cash on hand and cut net debt in the quarter by $700 million. In addition, Xerox has implemented actions that account for more than 75 percent of its year-end $1 billion cost-reduction target, including the reduction of 8,600 jobs. These efforts have contributed to a 7 percent decline in selling, general and administrative expenses and a $1 billion reduction in inventory from the second quarter last year. In highlighting the company's efforts to increase revenue, Mulcahy discussed the company's strong offerings in two core areas, one based on Xerox technology and the other focused on services. Building on Xerox's innovative product families in the production and office printing environments, Xerox will continue to develop advanced document devices that connect with an enterprise's electronic workflow. The company will also broaden its consulting and management services that leverage Xerox expertise in document, content and knowledge management. "We continue to bring to market a steady stream of world-class products, solutions and services,'' she said, noting Xerox's presence next week at the Print 01 graphic arts trade show in Chicago, where the company will unveil the next-generation technology underpinning its FutureColor digital production press. Mulcahy also reiterated her commitment to returning Xerox to profitability in the fourth quarter, "and building on that positive momentum into 2002.'' Also at the annual meeting, shareholders approved the election of 13 members of the Xerox board of directors: Paul A. Allaire, Antonia Ax:son Johnson, Vernon E. Jordan Jr., Yotaro Kobayashi, Hilmar Kopper, Ralph S. Larsen, George J. Mitchell, Anne M. Mulcahy, N.J. Nicholas Jr., John E. Pepper, Barry D. Romeril, Martha R. Seger, and Thomas C. Theobald. Shareholders rejected a shareholder's proposal regarding discretionary voting of proxies.