Second-Quarter 2008

Earnings Presentation
Anne Mulcahy
Chairman & CEO

Ursula Burns
President

Larry Zimmerman
Executive Vice President & CFO July 24, 2008
Forward-Looking Statements
This release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to
identify forward-looking statements. These statements reflect management’s current beliefs, assumptions and expectations and are
subject to a number of factors that may cause actual results to differ materially. These factors include but are not limited to the risk
that we will not realize all of the anticipated benefits from our 2007 acquisition of Global Imaging Systems (GIS); the risk that
unexpected costs will be incurred; the outcome of litigation and regulatory proceedings to which we may be a party; actions of
competitors; changes and developments affecting our industry; quarterly or cyclical variations in financial results; development of
new products and services; interest rates and cost of borrowing; our ability to protect our intellectual property rights; our ability to
maintain and improve cost efficiency of operations; changes in foreign currency exchange rates; changes in economic conditions,
political conditions, trade protection measures, licensing requirements and tax matters in the foreign countries in which we do
business; reliance on third parties for manufacturing of products and provision of services; and other factors that are set forth in the
“Risk Factors” section, the “Legal Proceedings” section, the “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” section and other sections of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 as well as our
2007 Form 10-K filed with the Securities and Exchange Commission. The company assumes no obligation to update any forward-
looking statements as a result of new information or future events or developments, except as required by law.

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Anne Mulcahy
Second-Quarter Overview
Earnings of $0.24 per share
• Includes $0.05 restructuring charge, within guidance of $0.23* to $0.25*
Total revenue up 8%, 4% CC1
• Post-sale up 10%, 6%CC1
• Color up 11%, Services annuity up 8%
• Global Imaging Systems and Developing Markets deliver consistent, strong growth
Cost and expense management
• Gross margin 39.2%
• SAG percent of revenue 25.8%
Balance sheet and cash flow performance
• $442M cash from operations
Delivering shareholder value
• $377M in share repurchases
• Additional $1B authorized with available authorization at $1.7B

4 * Includes $0.05 restructuring charge

1 Constant currency (CC): see slide 17 for explanation of non-GAAP measures
Revenue

2007 2008
(in millions) Q2 Adjusted1 Q2 Adjusted1

Total Revenue $ 4,208 $ 4,533

Growth 6% 1% 8% 5%
CC* Growth 4% (1%) 4% 1%

Post Sale $ 3,067 $ 3,373

Growth 7% 4% 10% 8%
CC* Growth 5% 2% 6% 4%

Equipment $ 1,141 $ 1,160

Growth 3% (4%) 2% (2%)
CC* Growth 1% (6%) (2%) (5%)

*Constant currency: see slide 17 for explanation of non-GAAP measures

5 1Adjusted Q2 2007 & 2008: The percentage point impacts reflect the revenue growth YOY after including

GIS’ results from second quarter 2006 & 2007. See slide 17 for explanation of non-GAAP measures
Color Performance
Total Color Revenue Color Trends
Q2 Q2 Q2
$1,531M $1,700M Total Revenue 11% 2006 2007 2008
(+5% @ CC) Color Revenue:
% of Post Sale 31% 34% 37%
Post Sale 17% % of Equipment 44% 48% 50%
$1,022 $1,192 (+11% @ CC) % of Total Revenue 34% 38% 40%
Color Pages:
Growth 40% 30% 28%
% of Total Pages 9% 12% 16%
Equipment Flat
$509 $508
(-6% @ CC)

Q2 2007 Q2 2008

• 28% page volume growth continues to fuel post-sale revenue growth

• Color 40% of total revenue, 16% of total pages
• Equipment revenue impacted by production color

6 Constant currency: see slide 17 for explanation of non-GAAP measuress

Color revenue excludes GIS results
Color pages exclude GIS, DMO and printers
Production Segment
Production Revenue Production Overview
$1,281M $1,337M Total Revenue 4% Positive post-sale trend offsetting equipment
(-1% @ CC) declines

Developing Markets equipment revenue up

Post Sale 9% 15%; total revenue up 20%
$939 $1,020 (+4% @ CC)
Color activity impacted by U.S. economy and
timing of product launches

$342 $317 Equipment (7%) New offerings showcased at drupa to provide

(-13% @ CC)
momentum in 2H ‘08
Q2 2007 Q2 2008 • Xerox iGen4® Press
• Xerox 700 digital color press
Install Growth1 • Xerox DocuColor® 5000AP digital press
Q2 2008 YTD • Color continuous feed
Production Monochrome (8%) (1%)
Production Color (12%) (3%)

7 Constant currency: see slide 17 for explanation of non-GAAP measuress

DMO results are included in the results of the Production, Office and Other segments
1Install growth includes Xerox-branded product shipments to GIS
 Office Segment
Office Revenue Office Overview
$2,327M $2,526M Total Revenue 9%
Global Imaging delivers strong results
(+5% @ CC)

Developing Markets equipment revenue

$1,751 up 16%; total revenue up 14%
$1,589
Post Sale 10%
(+6% @ CC)
SMB portfolio strengthened with Q2
launches; more to come

$775 Equipment 5%
$738 Continue to deliver solid color growth
(+1% @ CC)

Q2 2007 Q2 2008 Expanded distribution through Veenman

Install Growth1
Q2 2008 YTD
B.V. and Saxon Business Systems
Office B&W Copiers/MFDs 10% 22% acquisitions
Segments 1-2 (11-30) ppm 11% 26% • GIS added third YTD acquisition last

Segments 3-5 (31-90) ppm2 8% 11% week

Office Color MFDs 34% 37%
Color Printers 12% 23%
Constant currency: see slide 17 for explanation of non-GAAP measuress
8 DMO results are included in the results of the Production, Office and Other segments
1Install growth includes Xerox-branded product shipments to GIS
2Segments 3-5 (31-90) ppm includes 95 ppm, segment 6 device with an embedded controller
Developing Markets Operations
DMO Revenue DMO Overview

$531M $631M Total Revenue 19% Positive performance across all regions
Post-sale growth driven by supplies and
managed services
$437
$366 Post Sale 19% Continued equipment revenue growth
in both office and production

$165 $194 Equipment 18%

Q2 2007 Q2 2008

9 Beginning in 2008, DMO results are not reported as a separate segment, but are included within the results
of the Production, Office and Other segments
Larry Zimmerman
Earnings
(in millions, except per share data)
Q2 2008 Q2 2007
Revenue $ 4,533 $ 4,208 Modest growth driven by post-sale
Margin decline driven by product and
Gross Margin 39.2% 40.3% channel mix as well as price
R,D&E $ 223 $ 223 Productivity drives improved expense to
R,D&E % of Revenue 4.9% 5.3% revenue
SAG $ 1,170 $ 1,081 GIS, currency and continued coverage
SAG % of Revenue 25.8% 25.7% investments
Other, Net $ 78 $ 78
Restructuring $ 63 $ (2) $0.05 per share – cost focus
Net Income $ 215 $ 266 Including $63M restructuring charge
Equity Income $ 29 $ 27
Tax Rate 24% 24% 26%2, excluding restructuring
Diluted EPS $ 0.241 $ 0.28

1 Includes $0.05 restructuring charge

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2 Adjusted tax rate : see slide 17 for explanation of non-GAAP measures
Cash Flow
(in millions) Q2 2008 YTD 2008
Net income (loss) $ 215 $ (29)
Depreciation and amortization 178 323
Provisions for receivables and inventory 59 108
Cash payments for restructurings (22) (59)
Restructuring and asset impairment charges 63 66
Provisions for litigation, net - 795
Net change in income tax assets and liabilities 13 (287)
Net change in inventories (36) (165)
Net change in accounts payable and accrued compensation 40 (143)
Net change in A/R and billed portion of F/R (40) (68)
Other, net (40) (106)
Cash from Core Operations* $ 430 $ 435
Increase in equipment on operating leases (84) (161)
Change in finance receivables (F/R) 96 220
Cash from Operations $ 442 $ 494
CAPEX (incl. internal use software) (88) (159)
Acquisitions, net of cash acquired (138) (142)
Net change in escrow and other restricted investments (138) (137)
Other cash from investing 79 88
Cash from Investing $ (285) $ (350)
Debt payments on secured financings (59) (147)
Net cash proceeds on other debt 325 571
Payments to acquire treasury stock, including fees (377) (712)
Dividends on common stock (39) (79)
Other, net (4) (37)
Cash from Financing $ (154) $ (404)
Change in cash and cash equivalents 1 (256)
Ending Cash and Cash Equivalents $ 843 $ 843

12 *Cash from core operations: see slide 17 for explanation of non-GAAP measures
 Annuity Scorecard
2008 YTD
Post Sale Leading Indicators

Digital Revenue K 8% Color Revenue K 16% B&W Digital Rev K 2%

Digital MIF K 6% Color MIF K 37% B&W Digital MIF flat

Digital Pages1 L 1% Color Pages1 K 29% B&W Digital Pages1 L 5%

FY 2005 FY 2006 FY 2007 YTD 2008

Color % Revenue 27% 31% 35% 37%

Color % of MIF 10% 13% 17% 21%
Color % of Pages 7% 9% 12% 16%

Services* Annuity Growth K 1% K 6% K 8% K 8%

Light Lens % of Revenue 5% 3% 2% 1%

13 MIF (Machines in Field) & page data exclude printers, DMO & GIS. All revenue measures exclude GIS
*Services annuity includes managed services and value-added services
1 2008 YOY growth is based on updated methodology, applies to US pages
Anne Mulcahy
Summary
Annuity-based model drives revenue growth and cash generation
• Color, Services, 23 new products to accelerate activity

Global and market diversification offset U.S. economy pressure

Expanded coverage, more products fuel SMB growth
Restructuring drives improvements balance of year
Continued share repurchase
• $711M year-to-date
– Program-to-date: repurchased $2.8B, 186 million shares
– Additional $1B authorized with $1.7B available
Maintain $1.26* – $1.30* full year expectations
• Q3 EPS $0.28 - $0.30

15 * Adjusted diluted EPS: see slide 17 for explanation of non-GAAP measures

Appendix
 Non-GAAP Financial Measures
“Adjusted Revenue”: We discussed the revenue growth for the second quarter using non-GAAP financial measures. To understand trends in the
business, we believe that it is helpful to adjust the revenue growth rates to illustrate the impact of the acquisition of GIS by including their estimated
revenue for the comparable 2006 and 2007 periods. We refer to this adjusted revenue as “as adjusted” revenue in the following reconciliation table.
Management believes these measures give investors an additional perspective on revenue trends, as well as the impact to the Company of the
acquisition of GIS that was completed in May 2007. A reconciliation of these non-GAAP financial measures and the most directly comparable financial
measures calculated and presented in accordance with GAAP is set forth on slides 18 and 19.
“Adjusted Diluted EPS”: Diluted earnings per share for the 2008 full year expectations are discussed in this presentation using non-GAAP financial
measures that exclude the effect of charges associated with our securities-related litigation matters. Management believes that it is helpful to exclude
this effect to better understand and analyze the current period’s results given the nature and size of the charge as well as its relation to prior year
events. A reconciliation of this non-GAAP financial measure and the most directly comparable financial measure calculated and presented in
accordance with GAAP is set forth on slide 21.
“Adjusted Effective Tax Rate”: The effective tax rate for the second quarter 2008 is discussed in this presentation using a non-GAAP financial measure
that excludes the effect of charges associated with restructuring. Management believes that it is helpful to exclude this effect to better understand and
analyze the current period’s effective tax rate given the discrete nature of the charge in the period. A reconciliation of this non-GAAP financial measure
and the most directly comparable financial measure calculated and presented in accordance with GAAP is set forth on slide 20.
“Constant Currency”: To understand trends in the business, we believe that it is helpful to adjust revenue to exclude the impact of changes in the
translation of foreign currencies into U.S. dollars. We refer to this adjusted growth as “constant currency”. Currencies for our developing market
countries (Latin America, Brazil, the Middle East, India, Eurasia and Central-Eastern Europe) are reflected at actual exchange rates for both actual and
constant revenue growth rates, since these countries generally have volatile currency and inflationary environments, and our operations in these
countries have historically implemented pricing actions to recover the impact of inflation and devaluation. Management believes the constant currency
measure gives investors an additional perspective of revenue trends. The currency impact can be determined as the difference between actual growth
rates and constant currency growth rates as reported on the applicable slides.
“Cash from core operations; Core cash flow”: This measure of cash flows excludes the effect of investments made in finance receivables and on-lease
equipment, which are the basis for growth in our leasing operation. These investments are viewed as income-producing assets and are important to the
growth of our business. Management believes this measure gives investors an additional perspective of cash flow from operating activities. See
reconciliation of cash from core operations to cash flow from operations on slide 12.
Management believes that these non-GAAP financial measures provide an additional means of analyzing the current periods’ results against the
corresponding prior periods’ results. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the
Company’s reported results prepared in accordance with GAAP.

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Q2 2008 Non-GAAP Reconciliation

Three Months Ended % Change at

(in millions) June 30, Constant
2008 2007 % Change Currency Currency*
Equipment Sales Revenue:
As Reported $ 1,160 $ 1,141 2% (4%) (2%)
As Adjusted $ 1,160 $ 1,179 (2%) (3%) (5%)

Post Sale Revenue

As Reported $ 3,373 $ 3,067 10% (4%) 6%
As Adjusted $ 3,373 $ 3,126 8% (4%) 4%

Total Revenues:
As Reported $ 4,533 $ 4,208 8% (4%) 4%
As Adjusted $ 4,533 $ 4,305 5% (4%) 1%

Revenue “As Adjusted” includes a full quarter of GIS’ results for Q2 2007.

18 *See slide 17 for explanation of non-GAAP measure

 Q2 2007 Non-GAAP Reconciliation

Three Months Ended % Change at

(in millions) June 30, Constant
2007 2006 % Change Currency Currency*
Equipment Sales Revenue:
As Reported $ 1,141 $ 1,109 3% 2% 1%
As Adjusted $ 1,141 $ 1,194 (4%) 2% (6%)

Post Sale Revenue

As Reported $ 3,067 $ 2,868 7% 2% 5%
As Adjusted $ 3,067 $ 2,957 4% 2% 2%

Total Revenues:
As Reported $ 4,208 $ 3,977 6% 2% 4%
As Adjusted $ 4,208 $ 4,151 1% 2% (1%)

Revenue “As Adjusted” adds GIS’ estimated results for the period from May 9th through
June 30th 2006 to our 2006 reported revenue

19 *See slide 17 for explanation of non-GAAP measure

Q2 2008 Adjusted Effective Tax Rate Reconciliation

Three Months Ended

June 30, 2008
(in millions) As Reported Restructuring As Adjusted
Income (Loss) before Income Taxes and Equity Income $ 245 $ 63 $ 308

Income Taxes $ 59 $ 20 $ 79
Effective Tax Rate 24% 26%

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Earnings Expectations

Actual Guidance
Q2 08 Q3 08 FY 08
GAAP EPS $0.24* $0.28 - $0.30 $0.72 – $0.76*
Litigation $0.54

Adjusted Diluted EPS1 $0.24* $0.28 – $0.30 $1.26 – $1.30*

*Includes $0.05 restructuring charge

1Adjusted diluted EPS: see slide 17 for explanation of non-GAAP measures

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