Paul Allaire Quotations

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,

We were aware that we really had to change the cost structure of the company and change the investment profile and the focus to some degree and shed some assets in order to remain competitive, ... It is clear that just fixing our operational issues, although critical, is not sufficient.

We expect an earnings recovery in 2001 ... by strengthening our operations, improving our strong product offering and through significant cost reductions. We expect to achieve this, even if the economy and competing environment preclude any revenue growth in the year.

We have more significant issues than we previously anticipated, ... We're confident about a turnaround, but the timing is clearly later.

We have not put a number on it, but there are obviously a significant amount of people involved, ... We regret that. But these are difficult times and we have to make difficult decisions but we will emerge stronger for it.

We are accelerating the transition to digital technology with our broad digital copier line, including three new models introduced in just the last two months.

We're looking across the board at asset dispositions. We are talking about very significant asset dispositions to (try) to improve the strength of the balance sheet,

We are looking at everything and are looking at options we have associated with that investment, ... We will continue to focus on things like color. We think that's a real advantage and a market opportunity for us... but you should not expect to see a change on color.

We delivered another record quarter, reflecting strong double-digit earnings growth consistent with our objectives, even though pre-currency revenue growth - at 7 percent - was clearly affected by some weaker economies,

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

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

This repositioning will strengthen us financially and enable strong cash generation.

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.

These results are obviously disappointing and completely unacceptable. Clearly, actions beyond resolving our operational issues are required, including major cost reductions, asset dispositions and a review of the dividend level. Aggressive actions to improve profitability in 2001 are being pursued.

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 leadership transition is consistent with the Board's plans developed last year when I returned as CEO and Anne was named president and COO. The plan called for a gradual transition of leadership with Anne becoming CEO when the Board was confident of the effective execution of Xerox's turnaround. Clearly, this requirement has been met.

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.

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

If you talk about change but don't change the reward and recognition system, nothing changes.

This is all about execution. This management team is totally committed to advancing our business strategies. Rick's directions and initiatives were, in fact, right.

This is all about execution, ... This management team is totally committed to advancing our business strategies. Rick's directions and initiatives were, in fact, right.

The disruptions in customer relationships caused by our sales force realignment, at a time when competitors have strengthened their product capabilities, is producing a drag on the second-quarter sales of our most profitable products.