Exhibit 12

Xerox Corporation

Computation of Ratio of Earnings to Fixed Charges

The ratio of earnings to fixed charges, the ratio of earnings to combined fixed charges and preferred stock dividends are determined using the following applicable factors:

Earnings available for fixed charges are calculated first, by determining the sum of: (a) income (loss) from continuing operations before income taxes, (b) distributed equity income, (c) fixed charges, as defined below and (d) amortization of capitalized interest, if any. From this total, we subtract capitalized interest, if any.

Fixed charges are calculated as the sum of (a) interest costs (both expensed and capitalized), (b) amortization of debt expense and discount or premium relating to any indebtedness and (c) that portion of rental expense that is representative of the interest factor.

Preferred stock dividends used in the ratio of earnings to combined fixed charges and preferred stock dividends consist of the amount of pre-tax earnings required to cover dividends paid on our Series B convertible preferred stock and our Series C mandatory convertible preferred stock. The Series B dividends are tax deductible and, as such, are equivalent to the pre-tax earnings required to cover such dividends. The Series B convertible preferred stock was redeemed and converted to common stock as of May 27, 2004 and, as such, there were no dividends beyond such date.

	Year Ended December 31,
(in millions)	2005			2004			2003			2002			2001
Fixed charges:
Interest expense	$	557		$	708		$	884		$	896		$	1,001
Portion of rental expense which represents interest factor		74			105			77			82			111
Total Fixed charges	$	631		$	813		$	961		$	978		$	1,112
Earnings available for fixed charges:
Earnings	$	928		$	1,116		$	494		$	158		$	381
Less: Undistributed equity in income of affiliated companies		(54	)		(89	)		(37	)		(23	)		(20	)
Add: Fixed charges		631			813			961			978			1,112
Total Earnings available for fixed charges	$	1,505		$	1,840		$	1,418		$	1,113		$	1,473
Ratio of earnings to fixed charges		2.39			2.26			1.48			1.14			1.32

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Xerox Corporation

Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends

	Year Ended December 31,
(in millions)	2005			2004			2003			2002			2001
Fixed charges:
Interest expense	$	557		$	708		$	884		$	896		$	1,001
Portion of rental expense which represents interest factor		74			105			77			82			111
Total Fixed charges before preferred stock dividends pre-tax income requirement		631			813			961			978			1,112
Preferred stock dividends pre-tax income requirement		94			110			90			78			13
Total Combined fixed charges and preferred stock dividends	$	725		$	923		$	1,051		$	1,056		$	1,125
Earnings available for fixed charges:
Earnings	$	928		$	1,116		$	494		$	158		$	381
Less: Undistributed equity in income of affiliated companies		(54	)		(89	)		(37	)		(23	)		(20	)
Add: Fixed charges before preferred stock dividends		631			813			961			978			1,112
Total Earnings available for fixed charges and preferred stock dividends	$	1,505		$	1,840		$	1,418		$	1,113		$	1,473
Ratio of earnings to combined fixed charges and preferred stock dividends		2.08			1.99			1.35			1.05			1.31

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