Further re Agreement with SEC

RNS Number:4265U
Xerox Corp
11 April 2002


For additional Information contact:

Leslie F. Varon             James A. Ramsey                 Cynthia B. Johnston 
Vice President & Secretary  Director, Investor Relations    Manager, Investor 
203-968-3110                203-968-3807                     Relations 
Leslie.Varon@usa.xerox.com  James.Ramsey@usa.xerox.com      203-968-3489 
Fax (203) 968-4301          Fax (203) 968-3944      Cindy.Johnston@usa.xerox.com 
                                                            Fax (203) 968-3944



              XEROX CORPORATION CONCLUDES SETTLEMENT WITH SEC;
          RESOLVES ALL ITS OUTSTANDING MATTERS WITH THE COMMISSION

            SEC Agrees To Extension For The Filing of Xerox's 2001 10-K 
                        And First Quarter 2002 10-Q

STAMFORD, Conn., April 11, 2002 - Xerox Corporation (NYSE: XRX) announced today
that it has concluded its settlement with the Securities and Exchange Commission
on the previously disclosed proposed allegations related to matters that have
been under investigation since June 2000. As a result, the Commission filed
today a complaint and a consent order in federal district court for injunctive
relief and a civil penalty of $10 million. Xerox neither admits nor denies the
allegations of the complaint.

"The settlement with the Commission effectively resolves Xerox's outstanding
issues with the SEC," said Anne M. Mulcahy, Xerox chairman and chief executive
officer. "Xerox today is a stronger company with a new management team that has
taken all the right steps to turn our business around. With the SEC matters now
behind us, we are better positioned to continue fortifying our business through
operational improvements and future growth opportunities -- creating enhanced
value for our customers and shareholders."

Under the terms of the settlement, the company announced last week that it will
restate its financials for the years 1997 through 2000 as well as adjust
previously announced 2001 results. The restatement will primarily reflect
adjustments in the timing and allocation of lease revenue recognition, which
will be reallocated among equipment, service and finance revenue streams as
appropriate by applying a methodology different than the one the company had
used during those years. The resulting timing and allocation adjustments cannot
be estimated until the restatement process has been completed. In any event,
there will be no impact on the cash that has been received or is contractually
due to be received from these leases. Furthermore, the monetary value of the
leases does not change. The restatement will also include adjustments due to the
establishment and release of certain reserves prior to 2001 and other
miscellaneous items.

To allow for the additional time required to prepare the restatement and to make
these adjustments, the Commission has granted to Xerox as part of the settlement
an extension of 75 days beyond the 15-day extension received last week for the
filing of its 2001 10-K and first-quarter 2002 10-Q.

Xerox has also agreed that a special committee of its Board of Directors will
retain an independent consultant to review its material accounting controls and
policies. The Board will share the outcome of this review with the SEC.


For additional information about The Document Company Xerox, please visit our 
Worldwide Web site at www.xerox.com/investor.



This release contains forward-looking statements and information relating to
Xerox that are based on our beliefs as well as assumptions made by and
information currently available to us. The words "anticipate," "believe,"
"estimate," "expect," "intend," "will" and similar expressions, as they relate
to us, are intended to identify forward-looking statements. Actual results could
differ materially from those projected in such forward-looking statements.
Information concerning certain factors that could cause actual results to differ
materially is included in the company's Form 10-Q for the quarter ended
September 30, 2001. 

XEROX(R), The Document Company(R) and the digital X(R) are trademarks of
XEROX CORPORATION.




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