2. Monochrome Multifunction Market and profit from hitting the mark!

3. Corporate Vision and Strategy Streamline and digitize document-intensive business processes Manage our clients’ key business processes Sell value-added services into existing Xerox accounts Establish a services centric business model Production: Drive the New Business of Printing Defend and grow mono-chrome leadership Boldly lead in color printing Gain share from offset Unleash the power of digital workflow Services: Deliver process innovation and managed services Office: Lead the color & multifunction evolution Core Competencies Expand share in fastest growing segments. Restore profitability by restructuring the value chain. Lead migration to color in the office. Technology Brand Strength Document Expertise Global Direct Sales & Services

4. Mono MFP Market Overview  Market growth driven by MFP's MFP market will grow from 59% to 68%; from ’03 - ’07  66% of market decisions are 11 to 30 ppm 721K units expected to ship in 2004; 60K per month US Digital Market Size ‘03-’07 - K Units MFP 9% CAGR Segment 1 & 2

5. Xerox8%6%6%11% Canon 37312521 Ricoh1092825 HP111314  SOHO exit reduced Xerox participation in decisions  Xerox growth has not kept pace with market  Increased competition from traditional vendors and a new entry - HP Segment 1&2 Market Position Segment 1 (11-20 ppm) Source: Dataquest, Analog + Digital Copiers/Multifunction 1H023Q03 Segment 2 (21-30 ppm)

6. HP’s Strategy Capture Every Page, Attack Xerox on Every Front Major Elements of HP’s Strategy Are ALREADY Reflected In Current Xerox Strategy and Direction HP Targets: Office – copy/MFP/printing Production – Indigo Services – Total Print Management HP Tactics: 1. Focus on $24 Billion Copier Market 2. Focus on Full Office Services 3. Focus on Co-Existence of Printers and MFPs 4. Focus on Business Transformation

7. XCG Monochrome MFP Strategy  Expand channels Establish harmony with traditional channels Deliver growth in fast growing 11–30 ppm segment Establish tighter linkage to IT environment  Strengthen value proposition to channels Share in service and supplies revenue Expand product portfolio  Intensify channel marketing focus Integrate marketing activities with printers and color Invest in more demand generation Increase public relations activities  Enhance product portfolio Develop channel friendly products Fill gaps to effectively compete with HP

8. Monochrome MFP Technology  Streamline vendors to simplify platform offerings and optimize profitability  Enable Channel friendly products  Improve network functionality  Continue to improve product coherency, ease of use & reliability

9. Fax-Based Products Fax-based multifunction system  Designed for small business/workgroups ideal for any budget

10. Entry Level Mono MFP’s Xerox WorkCentre M15/M15i Big office features in a small office device Xerox WorkCentre PE16 A personal desktop multifunction device ideal for any budget

11. Workgroup Mono MFP’s Xerox WorkCentre Pro 423/428  Printing, Copying, Scanning and Faxing that’s fast, versatile and easy…

12. What’s Coming…..  Expanded portfolio with industry leading features  Aggressive equipment, service and supplies pricing  Increase opportunity to expand reseller offerings/services

13. What is the Opportunity for our Channel Partners  What is the Business Opportunity Xerox goal is to increase our Segment II share to 20% by FY 2006  What is the Channel Strategy Develop a portfolio of Best of Breed IT Focused Resellers with a strong incremental SMB account coverage Select 50 Resellers Feb 1,04 Expanded to >150 in Q3, ’04

14. Segment II MFP Partner Profile Recruit Best of Breed Partners Partner Profile “Document solutions as a practice” High local market touch Incremental market address IT Focused SMB market address Installed base Printers and/or MFPs experience Solution selling skills, e.g. conduct assessments and sell at enterprise level. Expert knowledge: Ability to do assessments Ability to sell Cost Per Page Networking expertise and technical support skills Customer support expertise and infrastructure MFP service capability

15. Building our MFP Business Together  Xerox is building a network of Value-Added Resellers that can Provide integrated solns to SMB customers Monochrone and color printers and MFPs Pre sales assessments and post sales service and support  Xerox will provide our MFP Partners with the opportunity for accelerated growth and enhanced Profitability  Establish the Xerox MFP Partner as the SMB Customers “channel of preference” for integrated solns.