Exhibit 12

XEROX CORPORATION

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

Earnings available for fixed charges are calculated first, by determining the sum of: (a) income 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 C mandatory convertible preferred stock. The Series C mandatory convertible preferred stock was redeemed and converted to common stock as of July 3, 2006 and, as such, there will be no future dividends beyond such date.

Computation of Ratio of Earnings to Fixed Charges

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2006		2005		2006			2005
Fixed charges:
Interest expense	$	136	$	145	$	266		$	292
Portion of rental expense which represents interest factor		23		18		45			37
Total Fixed charges	$	159	$	163		311		$	329
Earnings available for fixed charges:
Earnings	$	282	$	137	$	529		$	463
Adjusted for: Distributed (undistributed) equity income of unconsolidated affiliates		3		2		(34	)		(33	)
Add: Fixed charges before preferred stock dividends		159		163		311			329
Total Earnings available for fixed charges	$	444	$	302	$	806		$	759
Ratio of earnings to fixed charges		2.79		1.85		2.59			2.31

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

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2006		2005		2006			2005
Fixed charges:
Interest expense	$	136	$	145	$	266		$	292
Portion of rental expense which represents interest factor		23		18		45			37
Total Fixed charges before preferred stock dividends pre-tax income requirements		159		163		311			329
Preferred stock dividends pre-tax income requirements		24		24		48			47
Total combined fixed charges and preferred stock dividends	$	183	$	187	$	359		$	376
Earnings available for fixed charges:
Earnings	$	282	$	137	$	529		$	463
Adjusted for: Distributed (undistributed) equity income of unconsolidated affiliates		3		2		(34	)		(33	)
Add: Fixed charges before preferred stock dividends		159		163		311			329
Total earnings available for fixed charges	$	444	$	302	$	806		$	759
Ratio of earnings to combined fixed charges and preferred stock dividends		2.43		1.61		2.25			2.02