Pitney Bowes (PBI)

Outlook

The ongoing economic slowdown has continued to delay or change customer buying decisions worldwide. Our business model and the actions we have taken to significantly reduce costs and streamline our operations have and will continue to help mitigate, but do not eliminate, the effects of prolonged global economic weakness and unanticipated currency fluctuations. We expect that our 2009 reported results will continue to be negatively impacted by the strengthening of the U.S. dollar and the Japanese yen and by the significant increase in pension costs related to recent changes in capital markets and assumptions used to calculate pension liabilities.

We continue to expect our mix of revenue to change, with a greater percentage of revenue coming from diversified revenue streams associated with fully featured smaller systems and a smaller percentage from larger system sales. We expect to derive further synergies from our acquisitions. We will continue to remain focused on enhancing our productivity and to allocate capital in order to optimize our returns.

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Outlook

Our business model and the actions we have taken to significantly reduce costs and streamline our operations, will help mitigate, but do not eliminate the effects of prolonged global economic weakness and unanticipated currency fluctuations. Two external factors in particular, the strengthening of the U.S. dollar and the Japanese yen last year and the significant increase in pension costs related to recent changes in capital markets and other assumptions, will negatively impact 2009 reported results.

We expect our mix of revenue to continue to change, with a greater percentage of revenue coming from diversified revenue streams associated with fully featured smaller systems and a smaller percentage from larger system sales. In addition, we expect to derive further synergies from our recent acquisitions. We will continue to remain focused on enhancing our productivity and to allocate capital in order to optimize our returns.

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Outlook

While we anticipate that the remainder of 2008 will present challenges for all of our businesses, our products and services are designed to provide efficiencies, cost savings and revenue growth opportunities for our customers. We believe we are well positioned to continue to grow our earnings in the fourth quarter and during 2009 despite the challenging economic environment due to our business model of high recurring revenue and our diverse customer base.

We will continue to execute our transition initiatives that we began in the fourth quarter of 2007. We expect to incur approximately $15 million of restructuring charges in the fourth quarter of 2008 associated with actions identified to date; however, we continue to evaluate additional actions in conjunction with this program. We will continue to focus on operational efficiency, cash flow and expense management. We remain committed to meet and potentially exceed our original target of $150 million in pre-tax benefits in 2009.

We expect our mix of revenue to continue to change, with a greater percentage of the revenue coming from diversified revenue streams associated with fully featured smaller systems and a smaller percentage from larger system sales. In addition, we continue to expect a greater percentage of revenue growth from our Software, International Mailing and Mail Services segments. We expect to derive further synergies from our recent acquisitions, to remain focused on enhancing our productivity, and to allocate capital in order to optimize our returns.

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Outlook

Given the difficult comparisons to last year and the challenging economic environment, we are pleased with the operational and financial results of the business for the first half of 2008. We continue to experience ongoing global demand for a wide range of our solutions and services.

We remain confident in our ability to deliver innovation, growth, and value in 2008 and beyond. We will continue to execute our transition initiatives that we began in the fourth quarter of 2007. We anticipate that the restructuring and asset impairment charges in 2008 in conjunction with these transition initiatives will be in the range of $50 to $100 million. We will continue to focus on operational efficiency, cash flow and expense management. We remain committed to our target to achieve $150 million in pre-tax benefits in 2009.

We expect our mix of revenue to continue to change, with a greater percentage of the revenue coming from diversified revenue streams associated with fully featured smaller systems and a smaller percentage from larger system sales. In addition, we continue to expect a greater percentage of revenue growth from our Software, International Mailing and Mail Services segments. We expect to derive further synergies from our recent acquisitions, to remain focused on enhancing our productivity, and to allocate capital in order to optimize our returns.

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Outlook

We expect the second quarter results to be a difficult comparison to last year due to the benefit that we received from shape-based product sales and meter migration in our U. S. Mailing segment in 2007. We believe our solid performance in the first quarter, despite the environment, and our on-going actions to enhance long-term value will position us for sustained long-term improvement in earnings and increased shareholder value.

We remain confident in our ability to deliver innovation, growth, and value in 2008 and beyond. We will continue to execute our transition initiatives that we began in the fourth quarter of 2007. We anticipate that the restructuring and asset impairment charges in 2008 in conjunction with these transition initiatives will be in the range of $40 to $100 million. We will continue to focus on operational efficiency, cash flow and expense management. We remain committed to our target to achieve $150 million in pre-tax annual benefits in 2009.

We are nearing conclusion of our evaluation of the strategic alternatives for our U.S. Management Services business and expect to make a statement by the end of the second quarter.

We expect our mix of revenue to continue to change, with a greater percentage of the revenue coming from diversified revenue streams associated with fully featured smaller systems and a smaller percentage from larger system sales. In addition, we continue to expect a greater percentage of revenue growth from our Software and Mail Services segments. We expect to derive further synergies from our recent acquisitions, remain focused on enhancing our productivity, and to allocate capital in order to optimize our returns.

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Outlook

We believe that the actions we took in the fourth quarter of 2007, and actions that we will continue to take in 2008, will position us for sustained, long-term improvement in earnings and increased shareholder value. We expect to realize approximately $70 million in pre-tax annual benefits from these actions in 2008. We intend to reinvest the majority of these benefits in programs to improve our customers’ experience and our operational efficiencies. We are targeting $150 million in pre-tax annual benefits by 2009. We plan to use about half of these benefits to improve customer processes and generate revenue.

We expect our mix of revenue to continue to change, with a greater percentage of revenue coming from diversified revenue streams associated with fully featured smaller systems and a smaller percentage from larger system sales. We also expect a greater percentage of revenue growth from the Software and Mail Services segments. In addition, we expect to derive further synergies from our recent acquisitions. We will continue to remain focused on enhancing our productivity and to allocate capital in order to optimize our returns.

10

Outlook

On October 31, 2007, the Postal Regulatory Commission issued specific regulations to implement the U.S. postal reform bill signed into law in 2006. The rules create a new system under which postal rates will be set in the future.

As we address the current market conditions, we will examine all aspects of our operations and our investment strategies to ensure that we will deliver enhanced value to our shareholders. We will also review our mailing equipment product line in light of the evolving regulatory environment in the U.S., Canada and Europe, and accelerate our plans to improve our infrastructure to enhance the customer experience and lower costs.

We expect our mix of product sales to continue to change, with a greater percentage of revenue coming from diversified revenue streams associated with fully featured smaller systems and a smaller percentage from larger system sales. In addition, we expect to expand our market presence in Mailstream Solutions and Mailstream Services and derive further synergies from our recent acquisitions. We will continue to remain focused on our productivity programs and to allocate capital in order to optimize our returns.

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Outlook

We anticipate that we will experience solid financial results in 2007. We expect our mix of product sales to continue to change, with a greater percentage of revenue coming from diversified revenue streams associated with fully featured smaller systems and a smaller percentage from larger system sales. In addition, we expect to expand our market presence in Mailstream Solutions and Mailstream Services and derive further synergies from our recent acquisitions. We will continue to remain focused on our productivity programs and to allocate capital in order to optimize our returns. As part of the purchase accounting for MapInfo, we aligned MapInfo’s accounting policies for software revenue recognition with ours. Accordingly, certain software revenue that was previously recognized by MapInfo on a periodic basis will now be recognized over the life of the contract. Including the effect of this accounting alignment, we expect the acquisition of MapInfo to reduce diluted earnings per share from continuing operations by approximately 5 cents in 2007.

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Outlook

We anticipate that we will experience solid financial results in 2007. We expect our mix of product sales to continue to change, with a greater percentage of the revenue coming from diversified revenue streams associated with fully featured smaller systems and a smaller percentage from larger system sales. In addition, we expect to expand our market presence in Mailstream Solutions and Mailstream Services and derive further synergies from our recent acquisitions. We will continue to remain focused on our productivity programs and to allocate capital in order to optimize our returns. As part of the purchase accounting for MapInfo, we will align MapInfo’s accounting policies with ours. Accordingly, certain software revenue that was previously recognized by MapInfo on a periodic basis, will now be recognized over the life of the contract. Including the effect of this purchase accounting, we expect the acquisition of MapInfo to reduce diluted earnings per share by approximately 5 cents in 2007.

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Outlook

     The company anticipates second quarter revenue growth in the range of eight to 11 percent and revenue growth in the range of seven to 10 percent for the full year.

     The company expects earnings per share from continuing operations on a Generally Accepted Accounting Principles (GAAP) basis in the range of $0.66 to $0.70 for the second quarter and $2.85 to $2.93 for the full year. Excluding the effect of acquisition purchase accounting for MapInfo, the company expects adjusted earnings per share from continuing operations in the range of $0.68 to $0.72 for the second quarter and continues to expect $2.90 to $2.98 for the full year.

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Outlook

     The company anticipates revenue growth in the range of six to nine percent for the first quarter and full year.

     The company expects fully diluted earnings per share in first quarter 2007 in the range of $0.66 to $0.68 and $2.90 to $2.98 for the full year. The earnings expectations for first quarter and the full year are further summarized as follows:

     Management of Pitney Bowes will discuss the company’s results in a conference call today at 8:00 a.m. EST. Instructions for listening to the conference call over the Web are available on the Investor Relations page of the company’s web site at www.pb.com/investorrelations.

     Pitney Bowes engineers the flow of communication. The company is a $5.7 billion global leader of mailstream solutions headquartered in Stamford, Connecticut. For more information about the company, its products, services and solutions, visit www.pitneybowes.com.

Pitney Bowes has presented in this earnings release diluted earnings per share on an adjusted basis. Also, management has included a presentation of free cash flow on an adjusted basis and earnings before interest and taxes (EBIT). Management believes this presentation provides a reasonable basis on which to present the adjusted financial information, and is provided to assist in investors’ understanding of the company’s results of operations. The company’s financial results are reported in accordance with generally accepted accounting principles (GAAP). However, the earnings per share and free cash flow results are adjusted to exclude the impact of special items such as restructuring charges and write downs of assets, which materially impact the comparability of the company’s results of operations. Restructuring charges are infrequent or episodic charges that might mask the periodic income and financial and operating trends associated with our business. Although they represent actual expenses to the company, these episodic charges might mask the periodic income associated with our business. The use of free cash flow has limitations. GAAP cash flow has the advantage of including all cash available to the company after actual expenditures for all purposes. Free cash flow permits a shareholder insight into the amount of cash that management could have available for discretionary uses if it

5

Outlook

          We anticipate that we will experience ongoing strength in our financial results in the fourth quarter of 2006. We also expect that we will continue to experience a changing mix in our revenue, where a greater percentage will come from diversified revenue streams associated with fully featured smaller systems and less from larger system sales. We expect to continue our market expansion in mailstream solutions and services groups and derive further synergies from our recent acquisitions.

          As we have previously stated, we will continue to record additional restructuring charges in 2006 related primarily to the completion of programs initiated in 2005. We will remain focused on disciplined expense control and will continue to allocate capital to optimize our returns.

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