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UXBRIDGE -- Today HM Prison Service unveiled its brand new digital print centre at Standford Hill Prison on the Isle of Sheppey in Kent, installed to provide prisoners with valuable NVQ qualifications in creative services and desktop publishing. Opened by Ann Beasley, the HM Prison Service's director of finance, this centre is part of an initiative designed to increase prisoners' employment prospects and to help prevent prisoners from re-offending once they are released. Xerox was chosen to equip the prison with state-of-the-art digital kit including a Xerox DocuColor 5252 Digital Colour Press and a Xerox Nuvera 100 Digital Copier/Printer with an inserter module. These systems will merge colour with black-and-white applications and use a powerful finishing and booklet maker from Morgana. "This represents a unique opportunity for us to help prisoners learn professional skills which will help them find better skilled and well-paid employment when they are released," says John Wilson, Governor of HM Standford Hill Prison. "So far the take-up from the prisoners has been very encouraging - many are already discussing setting up their own businesses and gaining further qualifications once they have left. The print shop is a prime example of what the Prison Service could implement nationwide." Well known for promoting high standards of training, Xerox staff with NVQ-accredited qualifications will train prison supervisors in a range of operator courses for both the colour and monochrome products and provide materials to support long-term learning. Prisoners will then be trained by the prison supervisors to develop their operator skills and will receive follow-up supervision from Xerox trainers to verify that they have attained Xerox's Customer Education training course and later the Advanced Customer Training (ACT) course. Prisoners will be using the digital printers to produce professional work for the prison, and contracted work for businesses outside of

UXBRIDGE -- Xerox today announced the streamlining of its European distribution model, which could eventually treble the number of resellers through which Xerox Office products can be bought. SMARTer Distribution will deliver sustainable growth to Xerox Office Group by taking advantage of economies of scale that give end users guaranteed service levels and increased choice. During 2006 Xerox's two-tier distribution model, which currently consists of 49 country-based tier-one distributors serving some 8,000 resellers, will be restructured to comprise three regional master distributors - Scribona, Tech Data and Ingram Micro. Tech Data and Ingram Micro will cover the bulk of the Western European countries, while Scribona will provide product distribution in the Nordic countries. Around a third (16) of the 49 current Xerox Office distributors are local offices of Scribona, Ingram Micro or Tech Data, which will remain as part of the SMARTer Distribution network. In the UK, Xerox will retain Micro-P (Micro Peripherals) as a hardware distributor, to work alongside Ingram Micro and Computer 2000 (part of the Tech Data Group). Transition from Xerox's current distributors to the new distribution model will take place throughout 2006. The new model will ensure that Xerox Office products are made available to most, if not all, of Western Europe's 30,000-plus printer and copier resellers. Scribona, Tech Data and Ingram Micro also cover the vast majority of the IT market and therefore Xerox can reach a larger number of IT resellers than today - a key focus in the company's growth strategy. The SMARTer Distribution companies, all of whom currently work alongside Xerox and have an international presence, were chosen because their business strategies were compatible with Xerox's own: They have exceptional logistical capabilities and comprehensive IT infrastructures, as well as the ability to support and develop the sales channel. They will collect the hardware from

UXBRIDGE -- Xerox announced today fourth-quarter 2005 earnings per share of 27 cents, reflecting an 18 per cent increase in net income from fourth-quarter 2004. The company also announced plans to repurchase an additional $500 million of its common stock and said it expects to deliver full-year 2006 earnings at the high end of the company's guidance. "Our earnings performance in the fourth quarter met expectations with increased gross margins, lower costs and operational improvements," said Anne M. Mulcahy, Xerox chairman and chief executive officer. "We delivered another quarter - and another year - of earnings growth. Our strong financial position, with full-year operating cash flow of $1.4 billion, gives us the flexibility to invest back in the business and enhance shareholder value through an expanded share repurchase plan. "During the quarter, equipment sales were impacted by a more significant shift in product mix with stronger sales of lower-priced systems. At the same time, demand and installation activity accelerated for key products like entry-level colour production systems and office desktop multifunction devices," added Mulcahy. "This increased activity fuels future post-sale revenue - the engine of growth for Xerox's annuity-based business. We're confident that the short-term impact on equipment sale revenue will deliver long-term gains in top-line growth. "As important is that our leadership in digital colour printing continues to deliver strong results," said Mulcahy. "Revenue from colour grew 17 per cent in the fourth quarter and colour now represents 32 per cent of our total revenue, up five points from last year." In the fourth quarter, the company's equipment sales and total revenue of $4.3 billion were impacted by three points of currency, contributing to a two per cent decline. On a constant currency basis, total revenue and equipment sales grew one per cent. Post-sale and financing revenue, which represents about 70 per c

UXBRIDGE -- Visionary companies in the global graphic arts industry continue to embrace the benefits of digital, increasing their productivity and gaining new customers with the Xerox iGen3® Digital Production Press and Xerox Nuvera™ Digital Production Systems. Xerox iGen3 customers have produced more than three billion pages of material worldwide, with over 70 iGen3 systems printing more than one million pages per month. "Since the recent enhancements to the iGen3 and proven high ROI on all our digital equipment, demand has continued to grow," says Valentin Govaerts, Senior Vice President, Production and Graphic Arts Industry, Xerox Europe. "We have recently expanded in the Middle East and Turkey, and iGen3 installations have been secured in regions recently introduced to the iGen3, such as in South Africa, Russia and Romania. With these successes in mind, we're hoping to help our customers understand how to maximise their digital portfolio." The first example of Xerox's expansion into developing markets and recognition of the possibilities of digital is at graphic arts company Xpress Printing in Romania. The company recently purchased its second iGen3 after the success of its first installation and due to the growing market in personalised print. "Our customers were so impressed with the customised element carried out by the iGen3 we decided to buy another one to keep up with demand," says Panayiotis Vassos, General Manager at Xpress Printing. "We're now using both machines to produce a range of short-run, variable data such as high quality personalised calendars." A second example of the iGen3's impact in developing regions is at another Romanian graphic arts company called TipArt Group. The company purchased its first iGen3 in 2005 because it suited specific needs for high quality output at fast speeds. "We are now convinced that the iGen3 will help us successfully deliver the wide range of jobs our customers demand, no matter how complex, thus being

UXBRIDGE 2006 - Xerox today announced that Dutch company, Venspro, will be one of Xerox's key European partners whose business innovations will feature on the Xerox stand at IPEX 2006, taking place at the NEC, Birmingham, UK, April 4 - 11, 2006. Venspro will be demonstrating its Greetz online personalised greetings cards service at IPEX, an innovation in the 'greet and gift' retail sector that matches the customisation possibilities achievable through digital print with dot.com logistics management. Greetings card company, Hallmark, is a major distributor - other partners include Microsoft and Sony - and Venspro is now responsible for generating over 100,000 different orders each month, ranging from one-off cards for special occasions to short-run individually customised invitations. "A greetings card should be a mirror of the relationship between sender and recipient," says Johan van Vulpen. "If you went to a store, you could find a really great design, but maybe the caption isn't quite what you want it to say. We give you the tools to create something unique so you'll always score a hit, and we enable you to do it cost-effectively." In addition to enabling customers to create individualised designs and text online or adapt existing cards, the Greetz service includes full print, production and onward postage with guaranteed same day production. For distribution within the Netherlands, the total cost can be as little as € 1.99 per card. The Greetz service has already extended beyond the Netherlands to Belgium and launches in Switzerland, Germany, France and the UK are sceduled. Demand has grown at such a pace that Venspro's exclusive print partner, The Finishing Touch, has upgraded its Xerox DocuColor 2045 device with one of Xerox's flagship iGen3 digital production systems to handle a rapidly expanding level of business. "We have also invested money with our print partner to assist it in developing its technology base," adds van Vulpen. "As the Greetz

UXBRIDGE - To make its award-winning colour technology even more affordable, Xerox is announcing today significant price reductions for the WorkCentre C2424 colour multifunction system. The entry-level price of the WorkCentre C2424 has dropped by 30 per cent to only £1369.00. The WorkCentre C2424, which has now earned 29 industry awards globally, produces colour and black-and-white office documents - including text files, promotional materials, spreadsheets and presentations - at up to 24 pages-per-minute. At the new pricing levels Xerox is delivering the industry's first office colour multifunction system with patented solid ink technology to an even wider range of users. "Reducing the price of the WorkCentre C2424 reinforces Xerox's commitment to driving colour adoption into enterprises regardless of size," said Cees Van Doorn, general manager and senior vice president, Xerox Europe, Office Group. "Xerox's colour products and solutions offer high functionality at an affordable price, and we are pleased that we can build upon our success in 2005 and begin 2006 by extending our colour portfolio into new market areas." About Xerox Europe Xerox Europe, the European operations of Xerox Corporation, markets a comprehensive range of Xerox products, solutions and services, as well as associated supplies and software. Its offerings are focused on three main areas: offices from small to large, production print and graphic arts environments, and services that include consulting, systems design and management, and document outsourcing. Xerox Europe also has manufacturing and logistics operations in Ireland, the UK and the Netherlands, and a research and development facility (Xerox Research Centre Europe) in Grenoble, France. For more information visit, www.xerox.com . Xerox® is a trademark of Xerox Corporation. All non-Xerox brands and product names are trademarks or registered trademarks of their respective companies. Customer Contact Fo