Paul Allaire Turnaround Quotations

Xerox can now continue to focus on effectively executing its turnaround strategy, which remains on track,

Xerox's performance in the first quarter is evidence of significant cash and operational improvements as well as the effectiveness of our turnaround strategy,

With this transaction, Xerox greatly enhances its liquidity and has made significant progress on its turnaround pledge to generate more than $2 billion in asset sales,

Clearly, the fact that our current expectation on the second quarter is less than we anticipated ... our recovery is pushed back in time. We do expect the turnaround to be there and be significant and therefore have an improvement in the second half and have good momentum going into 2001.

After serious deliberation, the Board of Directors chose to eliminate the dividend -- a decision that contributes to the progress Xerox is making in restoring its financial strength and helps to provide the flexibility required to build on the effective execution of its turnaround plan, ... As Xerox returns to profitability, the Board will consider the reinstatement of dividends.

This was a difficult but necessary decision that is consistent with our resolve to execute an effective turnaround by focusing on core office and production growth opportunities, ... While Xerox was engaged in active discussions with potential equity partners, the slowdown in the economy and its impact on the PC and SOHO markets prevented these companies from making what was once considered a compelling investment in Xerox's SOHO business.

We're confident about a turnaround, but the timing is clearly later.