Pitney Bowes Announces Third Quarter Results for 2012

  Pitney Bowes Announces Third Quarter Results for 2012

Business Wire

STAMFORD, Conn. -- November 01, 2012

Pitney Bowes Inc. (NYSE: PBI) today reported financial results for the third
quarter 2012.

Recent Highlights

  *Revenues of $1.2 billion; Adjusted EPS of $0.47; GAAP EPS of $0.38
  *Reaffirms full year 2012 guidance for the following:

       *Revenue in the range of flat to -4%, excluding the impact of
         currency;
       *Adjusted EPS guidance in the range of $1.95 to $2.15;
       *Free cash flow in the range of $750 - $850 million.

  *Updates GAAP EPS guidance to a range of $1.78 to $2.08, which includes new
    impairment and restructuring charges.
  *Significant progress on expanding our participation in higher growth
    cross-border ecommerce parcel opportunities, including, a broader
    strategic relationship with eBay to provide ecommerce shipping solutions
    beginning in the 4^th quarter.
  *Decision to exit the International Mail Services business focused on
    delivering mail and catalogues internationally, in line with the focus on
    higher growth cross-border ecommerce parcel opportunities.
  *Year-over-year growth in Production Mail revenue.
  *Continued growth in Presort revenue.

Commenting on the quarter, Chairman, President and Chief Executive Officer
Murray D. Martin said, “We continue to execute our strategy to be a leading
provider of customer communications solutions; however, our earnings
performance during the quarter did not meet our expectations. In the third
quarter, our results continued to be affected by global economic weakness,
especially in International Mailing and Software where public sector spending
remains constrained. However, we were pleased to see gradually improving
trends in North America Mailing, where equipment sales experienced a slower
rate of decline and the best year-over-year comparisons in six quarters.”

Mr. Martin added, “We continue to take actions to drive sustainable long-term
growth for Pitney Bowes and our shareholders and are focused on positioning
Pitney Bowes to succeed in the changing market landscape. We decided to exit
the International Mail Services business related to the delivery of
international mail and catalogs. As we focus on the higher growth
opportunities, we are growing our participation in ecommerce opportunities
related to cross border parcel shipping services. One example is our
collaboration with eBay to facilitate cross border ecommerce by providing
technology solutions and parcel shipping services. Additionally, to address
our changing business mix and current economic pressures, we are initiating
actions to further streamline the business through organizational and
management consolidations to further reduce our cost structure. And, we will
further realign future investments in the business as we focus on higher
growth opportunities.”

Third Quarter 2012 Results

Revenue in the third quarter totaled $1.2 billion, a decline of 6 percent
compared to the prior year period, and reflects global economic conditions
with particular impact on the International Mailing, Software and Management
Services business segments. On a constant currency basis, revenue declined 5
percent and benefited from equipment sales growth in Production Mail and 3
percent growth in presort revenue.

Earnings per diluted share (EPS), as reported under Generally Accepted
Accounting Principles basis (GAAP), for the quarter were $0.38, as compared
with $0.85 per diluted share for the prior year. GAAP EPS for the quarter
includes a charge of $0.09 per diluted share to reflect non-cash impairment
charges for goodwill, intangible and long-lived assets related to the decision
in October 2012 to exit the International Mail Services business. In
comparison, the 2011 third quarter GAAP EPS included an $0.11 per share charge
for restructuring costs and asset impairments; a $0.15 per share charge for
goodwill; a $0.13 per share benefit from the sale of leveraged lease assets;
and a $0.30 per share tax benefit from discontinued operations.

Adjusted EPS were $0.47, as compared with adjusted EPS of $0.69 in the same
period last year. Adjusted EPS for 2012 excludes the non-cash impairment
charges for goodwill, intangible and long-lived assets related to the
International Mail Services business. In comparison, the 2011 third quarter
adjusted EPS included a $0.05 per share benefit related to insurance
reimbursements and an $0.08 per share favorable tax settlement.

Free cash flow during the quarter was $40 million and $551 million year to
date. On a GAAP basis the Company generated $69 million in cash from
operations for the quarter and $440 million year to date. Comparisons of cash
flow this quarter versus the prior year were impacted by a large tax refund
and the timing of tax payments in the third quarter of last year. Comparisons
to the second quarter of this year were also impacted by the timing of tax
payments, as well as the timing of working capital requirements. Year-to-date,
the Company has used its cash primarily to reduce debt, pay dividends,
contribute to its pension plans and make restructuring payments.

Business Segment Results

SMB Solutions Group
         3Q 2012       Y-O-Y Change  Change ex Currency
Revenue   $602 million   (8%)           (6%)
EBIT     $180 million  (11%)         
                                        

Within the SMB Solutions Group:

North America Mailing
         3Q 2012       Y-O-Y Change  Change ex Currency
Revenue   $448 million   (6%)           (6%)
EBIT     $169 million  (5%)          
                                        

During the quarter, the North America Mailing segment continued to benefit
from increased placements of Connect+™ and pbWebConnect™ mailing systems and
SendSuite Live™ shipping solutions. As a result, there was a decline of less
than 4 percent in equipment sales revenue this quarter, representing the best
year-over-year performance in 6 quarters. Revenue was impacted by lower
recurring revenue, although at a slower rate than the previous year. Supplies
revenue declined in part because of lower sales of third-party supplies for
copiers and printers.

EBIT margin for the segment again improved versus the prior year, even though
there were fewer lease extensions on existing equipment. The higher proportion
of equipment sales revenue will result in an improvement in customer retention
and future recurring revenue streams; however, fewer lease extensions reduced
EBIT margin in the quarter.

International Mailing
         3Q 2012       Y-O-Y Change  Change ex Currency
Revenue   $154 million   (13%)          (7%)
EBIT     $ 11 million  (55%)         
                                        

International Mailing revenue was negatively impacted by the uncertain
economic environment in Europe, resulting in fewer upgrades and lower
equipment sales, especially in the U.K. In addition, revenue comparisons were
impacted by a postal rate change in France in the third quarter of last year,
which generated $6 million of equipment sales related to postal rate updates
(PROMs), which was not repeated this year.

EBIT margin declined year-over-year due to lower revenue, lack of high-margin
PROM sales contribution this quarter and the overall mix of business.

Enterprise Business Solutions Group
         3Q 2012       Y-O-Y Change  Change ex Currency
Revenue   $614 million   (5%)           (4%)
EBIT     $ 41 million  (46%)         
                                        

Within the Enterprise Business Solutions Group:

Worldwide Production Mail
         3Q 2012       Y-O-Y Change  Change ex Currency
Revenue   $122 million   4%             7%
EBIT     $ 4 million   204%          
                                        

Production Mail revenue benefited from increased worldwide equipment sales
following the Drupa trade show held during the second quarter.

The company continues to make progress with its Volly™ service and has now
signed 60 large third-party mail service providers who will offer the Volly
secure digital mail service to 6,500 companies and consumer brands. As it
continues to work with billers and develop its software, the company has
decided to add to and enhance its technology to provide additional
capabilities that will improve the onboarding process for billers. This will
result in improving the scalability of the service and facilitating biller
density. Therefore, the company has determined that Volly’s long-term value
will be enhanced by deferring its availability to consumers until 2013.

EBIT improved when compared to the prior year due to the growth of revenue and
cost reduction initiatives in the U.S. and Europe, offset by continued
investment in Volly. Excluding the investment in Volly, EBIT margin would have
been approximately 540 basis points higher this quarter.

Software
         3Q 2012       Y-O-Y Change  Change ex Currency
Revenue   $ 89 million   (19%)          (18%)
EBIT     $ 1 million   (94%)         
                                        

Given the overall slowdown in the global market, Software has experienced a
reduction in the number of large license deals compared with the prior year.
Additionally, revenue was impacted by the continued austerity measures in the
public sector globally.

EBIT margin declined versus the prior year principally because of lower
licensing revenue, as well as relatively higher R&D investment and marketing
spend in the quarter.

Management Services
         3Q 2012       Y-O-Y Change  Change ex Currency
Revenue   $221 million   (6%)           (5%)
EBIT     $ 10 million  (44%)         
                                        

Management Services revenue and EBIT margin continue to be impacted by ongoing
pricing pressures, lower volumes and account contractions resulting from
worldwide economic uncertainty and competitive conditions. However, there
continues to be positive net new written business, which, coupled with new
strategic partnerships in print outsourcing, are expected to drive revenue
growth in the future.

Mail Services
         3Q 2012       Y-O-Y Change  Change ex Currency
Revenue   $142 million   (1%)           (1%)
EBIT     $ 17 million  (53%)         
                                        

Increased standard mail volumes and continued penetration in the workshare
discount categories continue to drive revenue growth for the presort
operations. Overall, Mail Services revenue declined slightly this quarter as a
result of lower volumes in the International Mail Services business.

The Company recently announced a partnership with eBay to provide ecommerce
solutions for cross-border package delivery which is beginning roll out in the
fourth quarter.

EBIT margin comparisons versus the prior year were impacted by the $18 million
insurance reimbursement received in the third quarter last year. Impacting
EBIT margin this quarter was the Company’s continued investment in software
applications and the distribution network to facilitate the expansion of its
ecommerce solutions.

Marketing Services
         3Q 2012       Y-O-Y Change  Change ex Currency
Revenue   $ 40 million   (4%)           (4%)
EBIT     $ 9 million   7%            
                                        

Marketing Services EBIT benefited from reduced print production costs and
ongoing productivity initiatives.

Executive Vice President and Chief Financial Officer, Michael Monahan,
commented, “As the mix of business for the Company continues to shift to more
enterprise-related revenues and we focus on incremental growth opportunities,
we anticipate that these new revenue streams will have lower margins than our
traditional Mailing business. Therefore, we intend to further streamline the
business and reduce its cost structure to address margin mix, as the Company
moves towards these initiatives. These actions, which are anticipated to
result in annualized savings of $45 million to $55 million, combined with our
ongoing efforts, will enhance shareholder value and improve the growth profile
of the business.”

2012 Annual Guidance

This guidance discusses future results which are inherently subject to
unforeseen risks and developments. As such, discussions about the business
outlook should be read in the context of an uncertain future, as well as the
risk factors identified in the safe harbor language at the end of this release
and as more fully outlined in the Company's 2011 Form 10-K Annual Report and
other reports filed with the Securities and Exchange Commission.

The Company is reaffirming its 2012 revenue, adjusted EPS and cash flow
guidance for the year, and is updating its GAAP EPS guidance. Based on results
to date and expectations for the fourth quarter, the Company anticipates:

  *2012 revenue, excluding the impacts of currency, to remain in a range of
    flat to a decline of 4 percent when compared to 2011;
  *Adjusted earnings per diluted share from continuing operations to be in
    the range of $1.95 to $2.15;
  *GAAP earnings per diluted share from continuing operations to be in the
    range of $1.78 to $2.08; and
  *Free cash flow to be in the range of $750 million to $850 million.

The Company’s efforts to further streamline the business and reduce its cost
structure will result in a pre-tax restructuring charge in the fourth quarter
that is expected to be in the range of $40 million to $60 million and is
anticipated to generate annualized savings in the range of $45 million to $55
million. The updated GAAP earnings per share guidance reflects the goodwill
and asset impairment charges of $0.09 per share related to the recent
performance of the International Mail Services business that was recorded
during the quarter, and the anticipated restructuring charge in the range of
$0.15 to $0.25 per share that will be recorded in the fourth quarter.

Conference Call and Webcast

Management of Pitney Bowes will discuss the Company’s results in a broadcast
over the Internet today at 5:00 p.m. EDT. Instructions for listening to the
earnings results via the Web are available on the Investor Relations page of
the Company’s web site at www.pb.com.

About Pitney Bowes

Delivering more than 90 years of innovation, Pitney Bowes provides business
communications software, mailing systems and services that integrate physical
and digital communications channels. Long known for making its customers more
productive, Pitney Bowes is increasingly helping other companies grow their
business through advanced customer communications management. Pitney Bowes is
a $5.3 billion Company with 29,000 employees worldwide. Pitney Bowes: Every
connection is a new opportunity™. www.pb.com

The Company's financial results are reported in accordance with generally
accepted accounting principles (GAAP). The Company uses measures such as
adjusted earnings per share, adjusted income from continuing operations and
free cash flow to exclude the impact of special items like restructuring
charges, tax adjustments, and asset write-downs, because, while these are
actual Company expenses, they can mask underlying trends associated with our
business. Such items are often inconsistent in amount and frequency and as
such, the adjustments allow an investor greater insight into the current
underlying operating trends of the business.

The use of free cash flow provides investors insight into the amount of cash
that management could have available for other discretionary uses. It adjusts
GAAP cash from operations for capital expenditures, as well as special items
like cash used for restructuring charges, unusual tax payments and
contributions to its pension funds. Management uses segment EBIT to measure
profitability and performance at the segment level. EBIT is determined by
deducting the related costs and expenses attributable to the segment. Segment
EBIT excludes interest, taxes, general corporate expenses not allocated to a
particular business segment, restructuring charges, asset impairments, and
goodwill charges which are recognized on a consolidated basis. In addition,
financial results are presented on a constant currency basis to exclude the
impact of changes in foreign currency exchange rates since the prior period
under comparison. Constant currency measures are intended to help investors
better understand the underlying operational performance of the business
excluding the impacts of shifts in currency exchange rates over the
intervening period.

Pitney Bowes has provided a quantitative reconciliation to GAAP in
supplemental schedules. This information may also be found at the Company's
web site www.pb.com/investorrelations.

This document contains “forward-looking statements” about our expected or
potential future business and financial performance. For us forward-looking
statements include, but are not limited to, statements about our future
revenue and earnings guidance and other statements about future events or
conditions. Forward-looking statements are not guarantees of future
performance and involve risks and uncertainties that could cause actual
results to differ materially from those projected. These risks and
uncertainties include, but are not limited to: mail volumes; the uncertain
economic environment; timely development, market acceptance and regulatory
approvals, if needed, of new products; fluctuations in customer demand;
changes in postal regulations; interrupted use of key information systems;
management of outsourcing arrangements; foreign currency exchange rates;
changes in our credit ratings; management of credit risk; changes in interest
rates; the financial health of national posts; and other factors beyond our
control as more fully outlined in the Company's 2011 Form 10-K Annual Report
and other reports filed with the Securities and Exchange Commission. Pitney
Bowes assumes no obligation to update any forward-looking statements contained
in this document as a result of new information, events or developments.

Note: Consolidated statements of income; revenue and EBIT by business segment;
and reconciliation of GAAP to non-GAAP measures for the three months and nine
months ended September 30, 2012 and 2011, and consolidated balance sheets at
September 30, 2012 and December 31, 2011 are attached.

                                                              
Pitney Bowes Inc.
Consolidated Statements of Income
(Unaudited)
                                                                     
(Dollars in
thousands,
except per
share data)
                     Three months ended September    Nine months ended September
                     30,                             30,
                      2012           2011^(2)       2012           2011^(2)
Revenue:
Equipment            $ 212,103       $ 221,475       $ 656,517       $ 706,027
sales
Supplies               66,902          74,271          213,789         235,728
Software               93,476          113,224         302,377         318,305
Rentals                142,288         154,210         428,174         467,064
Financing              123,999         136,000         373,695         412,958
Support                171,652         175,286         516,424         530,707
services
Business              405,257       425,258       1,226,175     1,266,478 
services
                                                                     
Total revenue         1,215,677     1,299,724     3,717,151     3,937,267 
                                                                     
Costs and
expenses:
Cost of
equipment              105,556         97,559          309,190         316,697
sales
Cost of                20,694          22,611          65,428          74,365
supplies
Cost of                22,784          23,431          68,281          73,541
software
Cost of                25,182          35,819          87,257          107,834
rentals
Financing
interest               19,604          21,430          61,385          66,915
expense
Cost of
support                107,095         114,074         334,304         344,767
services
Cost of
business               315,830         326,415         948,359         985,232
services
Selling,
general and            400,862         427,412         1,203,653       1,286,739
administrative
Research and           36,669          35,573          104,518         107,772
development
Restructuring
charges and            9,986           32,956          11,060          63,974
asset
impairments
Goodwill               18,315          45,650          18,315          45,650
impairment
Other interest         27,541          28,932          87,261          86,006
expense
Interest               (2,057    )     (1,265    )     (5,793    )     (4,702    )
income
Other income,         -             (10,718   )    1,138         (10,718   )
net
                                                                     
Total costs           1,108,061     1,199,879     3,294,356     3,544,072 
and expenses
                                                                     
Income from
continuing
operations             107,616         99,845          422,795         393,195
before income
taxes
                                                                     
Provision for         26,489        (17,087   )    93,519        77,319    
income taxes
                                                                     
Income from
continuing             81,127          116,932         329,276         315,876
operations
                                                                     
Income from
discontinued
operations,           -             60,428        19,332        57,911    
net of income
tax
                                                                     
Net income
before
attribution of         81,127          177,360         348,608         373,787
noncontrolling
interests
                                                                     
Less:
Preferred
stock
dividends of
subsidiaries
attributable
to
noncontrolling        4,594         4,593         13,782        13,781    
interests
                                                                     
Net income -
Pitney Bowes         $ 76,533       $ 172,767      $ 334,826      $ 360,006   
Inc.
                                                                     
                                                                     
Amounts
attributable
to common
stockholders:
Income from
continuing           $ 76,533        $ 112,339       $ 315,494       $ 302,095
operations
Income from
discontinued          -             60,428        19,332        57,911    
operations
                                                                     
Net income -
Pitney Bowes         $ 76,533       $ 172,767      $ 334,826      $ 360,006   
Inc.
                                                                     
Basic earnings
per share
attributable
to common
stockholders
^(1):
Continuing             0.38            0.56            1.58            1.49
operations
Discontinued          0.00          0.30          0.10          0.29      
operations
                                                                     
Net income -
Pitney Bowes         $ 0.38         $ 0.86         $ 1.67         $ 1.78      
Inc.
                                                                     
Diluted
earnings per
share
attributable
to common
stockholders
^(1):
Continuing             0.38            0.56            1.57            1.48
operations
Discontinued          0.00          0.30          0.10          0.28      
operations
                                                                     
Net income -
Pitney Bowes         $ 0.38         $ 0.85         $ 1.66         $ 1.77      
Inc.
                                                                     

^(1)  The sum of the earnings per share amounts may not equal the totals
       above due to rounding.
^(2)   Certain prior year amounts have been reclassified to conform to the
       current year presentation.

                                                           
Pitney Bowes Inc.
Consolidated Balance Sheets
(Unaudited in thousands, except per share data)
                                                                
Assets                                          09/30/12       12/31/11   
Current assets:
Cash and cash equivalents                      $ 424,789        $ 856,238
Short-term investments                           36,238           12,971
                                                                
Accounts receivable, gross                       695,575          755,485
Allowance for doubtful accounts                 (28,355    )    (31,855    )
receivable
Accounts receivable, net                         667,220          723,630
                                                                
Finance receivables                              1,218,080        1,296,673
Allowance for credit losses                     (26,368    )    (45,583    )
Finance receivables, net                         1,191,712        1,251,090
                                                                
Inventories                                      187,082          178,599
Current income taxes                             22,044           102,556
Other current assets and prepayments            144,987        134,774    
                                                                
Total current assets                             2,674,072        3,259,858
                                                                
Property, plant and equipment, net               382,850          404,146
Rental property and equipment, net               249,310          258,711
                                                                
Finance receivables                              1,047,411        1,123,638
Allowance for credit losses                     (18,235    )    (17,847    )
Finance receivables, net                         1,029,176        1,105,791
                                                                
Investment in leveraged leases                   34,373           138,271
Goodwill                                         2,127,114        2,147,088
Intangible assets, net                           175,995          212,603
Non-current income taxes                         45,615           89,992
Other assets                                    555,661        530,644    
                                                                
Total assets                                   $ 7,274,166     $ 8,147,104  
                                                                
Liabilities, noncontrolling interests
and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities       $ 1,643,395      $ 1,840,465
Current income taxes                             220,236          242,972
Notes payable and current portion of             375,000          550,000
long-term obligations
Advance billings                                449,051        458,425    
                                                                
Total current liabilities                        2,687,682        3,091,862
                                                                
Deferred taxes on income                         25,017           175,944
Tax uncertainties and other income tax           193,867          194,840
liabilities
Long-term debt                                   3,305,504        3,683,909
Other non-current liabilities                   641,093        743,165    
                                                                
Total liabilities                               6,853,163      7,889,720  
                                                                
Noncontrolling interests (Preferred              296,370          296,370
stockholders' equity in subsidiaries)
                                                                
Stockholders' equity:
Cumulative preferred stock, $50 par              4                4
value, 4% convertible
Cumulative preference stock, no par              653              659
value, $2.12 convertible
Common stock, $1 par value                       323,338          323,338
Additional paid-in-capital                       222,620          240,584
Retained Earnings                                4,709,761        4,600,217
Accumulated other comprehensive loss             (625,868   )     (661,645   )
Treasury Stock, at cost                         (4,505,875 )    (4,542,143 )
                                                                
Total Pitney Bowes Inc. stockholders'           124,633        (38,986    )
equity
                                                                
Total liabilities, noncontrolling              $ 7,274,166     $ 8,147,104  
interests and stockholders' equity
                                                                             

                                                                  
Pitney Bowes Inc.
Revenue and EBIT
Business Segments
September 30, 2012
(Unaudited)
                                                                        
(Dollars in thousands)                  Three Months Ended September 30,
                                                                        %
                                         2012          2011         Change
Revenue
                                                                        
North America Mailing                   $ 447,920         475,663       (6  %)
International Mailing                    154,171       177,797      (13 %)
Small & Medium Business Solutions        602,091       653,460      (8  %)
                                                                        
Production Mail                           122,251         117,220       4   %
Software                                  88,629          109,153       (19 %)
Management Services                       220,887         235,428       (6  %)
Mail Services                             142,182         143,055       (1  %)
Marketing Services                       39,637        41,408       (4  %)
Enterprise Business Solutions            613,586       646,264      (5  %)
                                                                        
Total revenue                           $ 1,215,677     1,299,724    (6  %)
                                                                        
EBIT (1)
                                                                        
North America Mailing                   $ 168,934       $ 177,280       (5  %)
International Mailing                    11,286        25,105       (55 %)
Small & Medium Business Solutions        180,220       202,385      (11 %)
                                                                        
Production Mail                           3,555           (3,426    )   204 %
Software                                  956             16,564        (94 %)
Management Services                       10,266          18,248        (44 %)
Mail Services                             16,671          35,107        (53 %)
Marketing Services                       9,297         8,716        7   %
Enterprise Business Solutions            40,745        75,209       (46 %)
                                                                        
Total EBIT                              $ 220,965       $ 277,594       (20 %)
                                                                        
Unallocated amounts:
Interest, net (2)                         (45,088   )     (49,097   )
Corporate and other expenses              (39,960   )     (50,046   )
Restructuring and asset                   (9,986    )     (32,956   )
impairments
Goodwill impairment                      (18,315   )    (45,650   )
                                                                        
Income from continuing operations       $ 107,616      $ 99,845    
before income taxes
                                                                        

      Earnings before interest and taxes (EBIT) excludes general corporate
(1)  expenses, restructuring charges and asset impairments and goodwill
      impairment.
(2)   Interest, net includes financing interest expense, other interest
      expense and interest income.

                                                                  
Pitney Bowes Inc.
Revenue and EBIT
Business Segments
September 30, 2012
(Unaudited)
                                                                        
(Dollars in thousands)                  Nine Months Ended September 30,
                                                                        %
                                         2012          2011         Change
Revenue
                                                                        
North America Mailing                   $ 1,362,709       1,478,355     (8%)
International Mailing                    487,665       524,488      (7%)
Small & Medium Business Solutions        1,850,374     2,002,843    (8%)
                                                                        
Production Mail                           360,334         382,595       (6%)
Software                                  288,830         304,921       (5%)
Management Services                       679,078         717,513       (5%)
Mail Services                             432,845         421,611       3%
Marketing Services                       105,690       107,784      (2%)
Enterprise Business Solutions            1,866,777     1,934,424    (3%)
                                                                        
Total Revenue                           $ 3,717,151     3,937,267    (6%)
                                                                        
EBIT (1)
                                                                        
North America Mailing                   $ 514,975       $ 532,727       (3%)
International Mailing                    53,041        75,033       (29%)
Small & Medium Business Solutions        568,016       607,760      (7%)
                                                                        
Production Mail                           11,928          12,971        (8%)
Software                                  20,135          31,618        (36%)
Management Services                       36,187          59,256        (39%)
Mail Services                             75,661          55,191        37%
Marketing Services                       21,617        19,668       10%
Enterprise Business Solutions            165,528       178,704      (7%)
                                                                        
Total EBIT                              $ 733,544       $ 786,464       (7%)
                                                                        
Unallocated amounts:
Interest, net                             (142,853  )     (148,219  )
Corporate and other expenses              (138,521  )     (135,426  )
Restructuring and asset                   (11,060   )     (63,974   )
impairments
Goodwill impairment                      (18,315   )    (45,650   )
                                                                        
Income from continuing operations       $ 422,795      $ 393,195   
before income taxes
                                                                        

      Earnings before interest and taxes (EBIT) excludes general corporate
(1)  expenses, restructuring charges and asset impairments and goodwill
      impairment.
(2)   Interest, net includes financing interest expense, other interest
      expense and interest income.

                                                           
Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted Results
(Unaudited)
                                                                  
(Dollars in
thousands,
except per
share data)
                                                                  
                       Three Months Ended          Nine Months Ended September
                       September 30,               30,
                        2012        2011        2012         2011     
                                                                  
GAAP income
from
continuing
operations
after income
taxes, as              $ 76,533      $ 112,339     $ 315,494      $ 302,095
reported
Restructuring
charges and              6,430         22,169        6,892          43,038
asset
impairments
Goodwill                 11,172        31,334        11,172         31,334
impairment
Sale of
leveraged                -             (26,689 )     (12,886  )     (26,689  )
lease assets
Tax                     -           447         -            2,960    
adjustments
Income from
continuing
operations
after income
taxes, as              $ 94,135     $ 139,600    $ 320,672     $ 352,738  
adjusted
                                                                  
                                                                  
GAAP diluted
earnings per
share from
continuing
operations, as         $ 0.38        $ 0.56        $ 1.57         $ 1.48
reported
Restructuring
charges and              0.03          0.11          0.03           0.21
asset
impairments
Goodwill                 0.06          0.15          0.06           0.15
impairment
Sale of
leveraged                -             (0.13   )     (0.06    )     (0.13    )
lease
Tax                     -           0.00        -            0.01     
adjustments
Diluted
earnings per
share from
continuing
operations, as         $ 0.47       $ 0.69       $ 1.59        $ 1.73     
adjusted
                                                                  
                                                                  
GAAP net cash provided by
operating activities,
as reported            $ 69,466      $ 301,055     $ 439,633      $ 750,456
Capital                  (39,065 )     (35,012 )     (127,816 )     (123,029 )
expenditures
Restructuring            12,871        26,411        60,746         78,379
payments
Pension                  -             -             95,000         123,000
contribution
Tax payments
on sale of               14,345        -             99,249         -
leveraged
lease assets
Reserve
account                 (17,707 )    (32,616 )    (15,373  )    (14,528  )
deposits
                                                                  
Free cash
flow, as               $ 39,910     $ 259,838    $ 551,439     $ 814,278  
adjusted
                                                                  
Note: The sum of the earnings per share amounts
may not equal the totals above due to rounding.

Contact:

Editorial
Pitney Bowes Inc.
Sheryl Y. Battles, 203-351-6808
VP, Corp. Communications
or
Financial
Pitney Bowes Inc.
Charles F. McBride, 203-351-6349
VP, Investor Relations
Website - www.pitneybowes.com