Pitney Bowes (PBI)

Business segment revenue

The following table shows revenue in 2005 and 2004 by business segment:

Mailstream Solutions revenue increased 9% over the prior year driven by growth in our worldwide operations, and the acquisitions of Group 1, Groupe MAG and Danka Canada. U.S. Mailing’s revenue growth of 4% was favorably impacted by placements of small and mid-sized networked digital mailing systems, mail creation equipment and supplies. International Mailing revenue grew 12% due to increased placements of mailing equipment with small businesses and increased sales of supplies. Revenue also benefited from the acquisition of Group MAG and Danka Canada, and favorable foreign currency translation, which contributed 4%. Worldwide Production Mail revenue increased by 14% driven by placements of our Advanced Productivity Systems and Flexible Productivity Systems. Software revenue grew 79% primarily as a result of a full year’s revenue from Group 1 which was acquired in July 2004.

Mailstream Services revenue increased 17% over the prior year driven primarily by a 73% increase at Mail Services. Management Services revenue declined slightly from the prior year, reflecting our continued focus on enhancing profitability for this business segment. Our Mail Services operations grew at a double-digit rate as a result of continued expansion of our presort and international mail consolidation network, growth in our customer base and the acquisitions of IMEX and Ancora. Revenue growth for Marketing Services is a result of our acquisition of Imagitas in May 2005.