Xerox Revenue by Reporting Segment – 2008
In 2008, we reported our financial results through three segments: Production, Office and Other. Financial information for operating segments is presented in our quarterly and annual reports available at www.xerox.com/investor.

Production

Office

Other

Xerox Corporation – Who We Are and What We Offer
For more than half a century, Xerox has been in the business of making it easier to get work done. Our job has never been more important than it is today as the world gets even more lost in information. Xerox has kept pace with innovations that help business clear the path between paper and digital content, cut through the clutter and make information relevant again.

Document Management Services
We lead the industry in Document Management Services and participate in three areas of the outsourcing services market:

• Infrastructure Outsourcing, where we help our customers reduce their enterprise spend through differentiated technology, skills and automation.
• Application Outsourcing, where we help our customers streamline their document-intensive business processes through automation and deployment of software applications and tools.
• Business Process Outsourcing, where our customers leverage our global delivery capability and proprietary production imaging software to manage both high-volume standardized activities as well as lower-volume complex workflows.

Production Printing
We help our customers deliver creative, custom communications through:

• Color and black-and-white digital printers and presses.
• Business development tools to help customers grow a profitable digital business.
• Application solutions for books, on-demand documents, transactional applications, direct mail, photos, personalized printing and more.
• Workflow software to simplify how print jobs are created and managed.

Office Solutions
We have the right office printer and services for any business, from small to large:

• Color and black-and-white multifunction systems that combine printing, copying, faxing and scanning.
• Color network printers, digital copiers and fax systems.
• Software to streamline how information is stored and shared.
• Services to help customers manage their print infrastructure and document-intensive processes.

Research and Development
Innovation keeps us in the forefront of our industry:

• Broadest portfolio of document systems, software and solutions in the industry.
• More than 80 products launched in the past three years.
• About 5% of our revenue is dedicated to R&D and engineering.
• Four R&D centers in the U.S., Canada and Europe focus on color science, computing, digital imaging, work practices, electromechanical systems, novel materials and other disciplines.
• Hold approximately 8,900 active U.S. patents.

Xerox around the World
Xerox customers include small and medium-size businesses, graphic communications companies, government entities, education institutions, Fortune 1000 companies, and firms in document-intensive industries such as healthcare, legal and financial services. Xerox offerings are sold through our worldwide sales force; a network of independent agents and concessionaires, dealers, value-added resellers and systems integrators; Global Imaging Systems, a wholly owned subsidiary of Xerox; and the Web.

We have:

• Over 7,500 sales professionals, 12,800 managed service employees at customer sites and 12,900 technical service employees.
• More than 6,500 agents and concessionaires and over 10,000 technology resellers that extend Xerox’s local and global reach.
• Alliances with top IT and business partners that integrate information technologies and services into our customer solutions.

Xerox Among World’s Most Admired Companies

Xerox was ranked the World’s Most Admired Company in the computer industry in FORTUNE magazine’s annual reputation survey. Xerox jumped to No. 1 from last year’s industry ranking of No. 4. To arrive at each company’s industry ranking, scores were averaged from

these nine criteria: innovation, people management, use of corporate assets, community/environment, quality of management, financial soundness, long-term investment, quality of products/services and global competitiveness.

Revenues by Geography

We operate in more than 160 countries worldwide
and serve a $132 billion market.

In 2008, about one-half of our revenue was generated from customers outside the U.S. Our largest subsidiary outside the U.S. is Xerox Limited, which operates predominantly in Europe. We conduct our developing markets operations in Latin America, Brazil, the Middle East, India, Eurasia and Central-Eastern Europe, and Africa through operating companies, subsidiaries and distributors.

Fuji Xerox, an unconsolidated entity in which we own a 25% interest, develops, manufactures and distributes document processing products and services in Japan, China, Hong Kong and other areas of the Pacific Rim, Australia and New Zealand.

During 2008 we completed several acquisitions to further strengthen our distribution capacity and expand our reach into the small to mid-size market:

• Veenman B.V., an office technology distributor for small and medium-size businesses in The Netherlands.
• Global Imaging Systems, Inc. acquired Saxon Business Systems, an office equipment supplier with offices throughout Florida, as well as three additional smaller businesses.

Market Opportunity
The document industry is transitioning to digital systems, color and an increased reliance on electronic documents. More and more, businesses are creating and storing documents digitally and using the Internet to exchange electronic documents. We believe these trends play to the strengths of our product and service offerings and represent opportunities for future growth in the $132 billion market we serve.

Xerox Market Opportunity by Segment – 2008

Services: $26 Billion
Our value-added services deliver solutions, which not only optimize enterprise output spend and infrastructure, but also streamline, simplify and digitize our customers’ document-intensive business processes.

Production: $25 Billion
We are the leading provider in the market and offer a complete family of monochrome and color production systems, business development tools and workflow solutions. We are creating new market opportunities in targeted application areas with digital printing as a complement to traditional offset printing.

Office: $81 Billion
We are well positioned to capture growth by leading the transition to color and reaching new customers with the industry’s broadest offerings and expanded distribution channels.

Our Values
Since our inception, we have operated under the guidance of six core values:

• We succeed through satisfied customers.
• We deliver quality and excellence in all we do.
• We require premium return on assets.
• We use technology to develop market leadership.
• We value our employees.
• We behave responsibly as a corporate citizen.