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( BW)(XEROX-CORP.)(XRX) Xerox Reports First-Quarter Litigation Charge

    Business Editors
    UK REGULATORY NEWS

    STAMFORD, Conn.--(BUSINESS WIRE)--April 22, 2003--

Xerox Corporation (NYSE: XRX) said today that it expects to include a
litigation charge of 25 cents per share in its first-quarter results.
The company also noted that its operational performance in the quarter
exceeded expectations, excluding this item.

The after-tax litigation charge of $183 million refers to the Berger
v. Retirement Income Guarantee Plan litigation, a case brought against
the company's primary U.S. pension plan for salaried employees. RIGP
is appealing a ruling made in September 2002 by the United States
District Court for the Southern District of Illinois. External counsel
and RIGP continue to believe that the appeal has merit and that the
district court's judgment should be overturned. However, following the
oral argument of the plan's appeal to the Seventh Circuit Court of
Appeals on April 9, Xerox reassessed the level of probability for a
favorable outcome. Under accounting standards, this reassessment
requires the company to take a charge for the value of the judgment.

If the district court ruling is upheld on appeal, any final judgment
would be paid from RIGP assets. Should the company need to make a cash
contribution to compensate for any potential shortfall in the plan
related to this litigation, it would not be required to begin doing so
until 2005.

Xerox is scheduled to release first-quarter earnings at 7am ET on
Wednesday, April 23.

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-K for the year ended
2002, as filed with the SEC.

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

   Short Name: Xerox Corp.
   Category Code: MSC
   Sequence Number: 00004142
   Time of Receipt (offset from UTC): 20030421T133919+0100

    --30--tav/ny

    CONTACT: Xerox Corporation
             James A. Ramsey                                                                 
             Director, Investor Relations                                                    
             203-968-3807                                                                    
             James.Ramsey@usa.xerox.com                                                      
             Fax (203) 968-3944                                                              
             or
             Cynthia B. Johnston         
             Manager, Investor Relations 
             203-968-3489                
             Cindy.Johnston@usa.xerox.com
             Fax (203) 968-3944          

    KEYWORD: UNITED KINGDOM INTERNATIONAL EUROPE
    INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS HARDWARE PUBLISHING 
    SOURCE: Xerox Corporation

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