XEROX CEO PROMISES VIGILANCE IN RECOVERY

[Anonymous]

Xerox CEO promises vigilance in recovery

STAMFORD, Conn. — Compared to Xerox’s annual shareholder meetings of the
recent past, when angry shareholders griped about the company’s accounting
scandal and other troubles, Thursday’s gathering was a brief, subdued
affair.

During the half-hour meeting, Chief Executive Anne Mulcahy told shareholders
the copier and printer company’s financial health was the strongest it had been
in a long time – and promised to avoid the problems of the past.

Xerox has returned to profitability in recent years after it was hit by an
accounting scandal, loss of market share, mounting debt and a sharp drop in its
stock price.

“Xerox is strong and getting stronger,” Mulcahy said, noting the company has
cut its debt and improved its profits. “We have not been this financially
healthy for a very long time.”

Mulcahy said the Stamford-based company is transforming itself into a
business increasingly focused on products that produce documents in color and
helping other companies manage their documents to save money.

“Two-thirds of our equipment sales
are coming from products and services introduced in the past two years,” Mulcahy
said. “The copier and hardware company has morphed into a technology and
services enterprise.”

Mulcahy said Xerox is mindful of strong competition and is spending plenty of
time with customers. The company introduced 40 new products last year and won
525 patents, she said.

“I am optimistic about the future,” Mulcahy said. “But I don’t want to
mistake optimism for arrogance. We realize better than most how easy it is to
lose your way.”

This year, the few shareholders who spoke were interested in sharing in the
success, asking if the company plans to restore its dividend and whether more
help is on the way for retirees struggling with higher health care premiums.

Mulcahy said the company would consider reinstating a dividend and would
monitor the concerns of retirees.

Shareholders approved the election of 11 members of the Xerox board of
directors, including new director Robert McDonald, a 25-year veteran of Procter
& Gamble Co.

Shareholders also ratified the selection of PricewaterhouseCoopers LLP as
Xerox’s independent auditors for 2005.

Shares of Xerox closed unchanged Thursday on the New York Stock Exchange at
$13.95. The stock has traded between $12.56 and $17.24 over the past
year.

[Author]

June 1, 2005 at 9:53 AM