Pitney Bowes (PBI)

Revenue by source

The following table shows revenue by source for the three months ended March 31, 2009 and 2008:

(Dollars in thousands)

Equipment sales revenue decreased 23% compared to the prior year due to lower placements of mailing equipment as more customers extended their leases on existing equipment due to the economic conditions. Revenue also continues to be adversely affected by the ongoing changing mix in equipment placements to more fully featured smaller systems. Foreign currency translation had an unfavorable impact of 8%.

Supplies revenue decreased 18% compared to the prior year due to lower supplies usage resulting from lower mail volumes and fewer installed meters due to customer consolidations. Foreign currency translation had an unfavorable impact of 7%.

Software revenue decreased 24% compared to the prior year primarily due to challenging comparisons to the 2008 first quarter when there were several large-ticket licensing deals. The impact of the global economic slowdown has caused many businesses to delay their capital spending worldwide, thus impacting our software revenues. Foreign currency translation had an unfavorable impact of 11%.

Rentals revenue decreased 9% compared to the prior year as customers in the U.S. continue to downsize to smaller, fully featured machines. Foreign currency translation had an unfavorable impact of 4%.

Financing revenue decreased 8% compared to the prior year, mostly due to the unfavorable impact of foreign currency translation of 5%. In addition, lower equipment sales have resulted in a corresponding decline in our lease portfolios.

Support services revenue decreased 9% compared to the prior year, principally due to the unfavorable impact of foreign currency translation of 8%.

Business services revenue decreased 6% compared to the prior year. Lower volumes at Management Services and Marketing Services more than offset the increase in mail volumes processed at Mail Services. The positive impact of acquisitions which contributed 3% was offset by the unfavorable impact of foreign currency translation of 4%.

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Revenue by source

Equipment sales revenue decreased 6% compared to the prior year. Lower sales of equipment in U.S. Mailing were primarily due to the postal rate case in 2007, which resulted in incremental sales of mailing equipment shape-based upgrade kits during that period and pulled sales forward from 2008, weakening global economic conditions, and product shift toward smaller, fully featured postage machines. International sales revenue, excluding the positive impact from foreign currency of 2% and acquisitions of 2%, increased 2% principally due to a postal rate change in the first quarter of 2008 in France, combined with higher equipment placements throughout Europe. Foreign currency translation contributed an overall favorable impact of 1% to equipment sales revenue.

Supplies revenue in 2008 was flat compared to the prior year. The decline of supplies revenue in the U.S was due to lower volumes, offset by an increase in supplies revenue in Europe as our customers continue to migrate to digital technology. Foreign currency translation contributed 1% to supplies revenue.

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Revenue by source

Equipment sales revenue decreased 3% from the prior year, primarily due to lower sales of mailing equipment in the U.S. and Europe, partially offset by favorable foreign currency translation of 3%.

Supplies revenue increased 16% from the prior year due to the continued transition of our meter base to digital technology. Acquisitions and foreign currency translation contributed 4% and 3% to this growth, respectively.

Software revenue increased 71% from the prior year primarily driven by strong worldwide demand for our software solutions, acquisitions which contributed 50%, and currency translation which contributed 4%.

Rentals revenue decreased 6% from the prior year due to the continued downsizing by customers to smaller machines.

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Revenue by source

Equipment sales revenue decreased 5% compared to the prior year. Lower sales of equipment in U.S. Mailing were primarily due to the postal rate case in 2007, which stimulated incremental sales during that period, weak economic conditions, and product shift toward smaller, fully featured postage machines which resulted in an overall unfavorable impact on equipment sales. International revenue increased principally due to a postal rate change in the first quarter of 2008 in France, combined with higher equipment placements throughout Europe and Asia. Foreign currency translation contributed a favorable impact of 4%.

Supplies revenue increased by 5% from the prior year. This increase was primarily driven by revenue growth in Europe as our customers continue to migrate to digital technology. Foreign currency translation contributed 3%.

Software revenue increased by 41% from the prior year primarily driven by acquisitions which contributed 27%, strong international demand for our location intelligence and customer communication software solutions, and foreign currency translation which contributed 3%.

Rentals revenue was flat compared to the prior year. Favorable foreign currency translation of 2% and higher demand in France were offset by lower revenue in the U.S., as our customers continue to downsize to smaller, fully featured machines.

Financing revenue increased 1% primarily due to foreign currency translation.

Support services revenue increased 3% from the prior year, primarily due to the favorable impact of foreign currency translation of 3%. Renewals and pricing increases offset the impact of customers down-sizing their equipment.

Business services revenue increased 13% from the prior year. The growth was driven by higher revenue in Mail Services and Marketing Services, which was partly offset by lower transaction volumes in Management Services. Acquisitions and foreign currency translation contributed 8% and 1%, respectively, to this growth.

Revenue by source

The following table shows revenue by source for the three months ended June 30, 2008 and 2007:

Equipment sales revenue decreased 14% compared to the prior year. Sales of equipment in U.S. Mailing were lower primarily due to the postal rate case in the second quarter of last year, which stimulated incremental sales during that period; lower benefits from meter migration, and weak economic conditions which resulted in an overall unfavorable impact on equipment sales of 19%. Foreign currency translation had a favorable impact of 4%.

Supplies revenue increased by 5% from the prior year, principally due to foreign currency translation.

Software revenue increased by 24% compared to the prior year. The revenue growth was primarily driven by acquisitions of 15%, foreign currency translation of 4%, and higher demand for our products outside of the U.S.

Rentals revenue increased 3% from the prior year principally due to foreign currency translation.

Financing revenue increased 1% mainly due to foreign currency translation of 2% partially offset by lower revenue due to the reduction in equipment leasing volumes.

Support services revenue increased 1% from the prior year. A favorable impact from foreign currency translation of 4% was principally offset by the adverse impact on support services revenue of customers down-sizing their equipment.

Business services revenue increased 14% from the prior year. This growth was driven by higher revenue in mail and marketing services but was partly offset by lower transaction volumes in our management services business. Acquisitions and foreign currency translation contributed 9% and 2%, respectively, to this growth.

Revenue by source

Equipment sales revenue increased 10% over the prior year due to growth in sales of networked digital mailing systems, inserting equipment, and shipping solutions.

Supplies revenue increased 14% driven by customers’ migration to digital technology, price increases and the expansion through acquisition of our print management business. At December 31, 2006, digital meters represented approximately 93% of our 1.3 million U.S. meter base, up from 84% in 2005.

Software revenue increased 16% primarily due to higher sales of document composition, and address management products.

Rentals revenue decreased from the prior year due to the continued downsizing by customers to smaller machines, primarily in the U.S.

Financing revenue increased 9% primarily due to growth in our worldwide equipment leasing volumes and higher demand for our payment solutions.

Support services revenue increased 3% due to higher placements of equipment and shipping solutions and our acquisitions in the print management space which contributed 1%.

Business services revenue increased 7% primarily due to growth in mail and marketing services.

Revenue by source

The following table shows revenue by source for the nine months ended September 30, 2007 and 2006:

Equipment sales revenue was flat compared with the prior year as higher sales of equipment in the U.S. and favorable currency translation of 2% were offset by lower international sales.

Supplies revenue increased 17% over the prior year period due to transition of our meter base to digital technology. The acquisition of our print management business last year contributed 4% to this increase and foreign currency translation contributed 3% to this growth.

Software revenue increased 60% over the prior year period due to the acquisition of MapInfo, which contributed 44% to this overall increase, favorable currency translation, which contributed 3% to growth, and strong worldwide demand for our software solutions.

Rentals revenue declined 6% over the prior year period due to continued downsizing by customers to smaller machines.

Financing revenue increased 9% over the prior year period, primarily due to higher revenue from payment solutions and growth in our equipment leasing volumes.

Support services revenue increased 7% compared with the prior year period. This growth was primarily driven by higher service revenue from production mail and mailing equipment. Acquisitions contributed 2% and foreign currency translation contributed 2% to this growth.

Business services revenue increased 9% from the prior year period. This growth was driven by higher demand for our mail services. Acquisitions contributed 4% and foreign currency translation contributed 1% to this growth.

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Revenue by source

The following table shows revenue by source for the six months ended June 30, 2007 and 2006:

Equipment sales revenue increased 5% over the prior year period, primarily due to sale of shape-based rating equipment and production mail equipment in the U.S.

Supplies revenue increased 19% over the prior year period due to continued transition of our meter base to digital technology. The acquisition of our print management business last year contributed 5% to this increase and foreign currency translation contributed 3% to this growth.

Software revenue increased 47% over the prior year period due to the acquisition of MapInfo, which contributed 30% to this overall increase, and to strong demand for our software solutions.

Rentals revenue declined 6% over the prior year period due to continued downsizing by customers to smaller machines.

Financing revenue increased 9% over the prior year period, primarily due to higher revenue from payment solutions and growth in our equipment leasing volumes. Foreign currency translation contributed 1% to this growth.

Support services revenue increased 9% compared with the prior year period. This growth was primarily driven by higher service revenue from production mail and mailing equipment. Acquisitions contributed 3% and foreign currency translation contributed 2% to this growth.

Business services revenue increased 8% from the prior year period. This growth was driven by higher demand for our mail services. Acquisitions contributed 3% and foreign currency translation contributed 1% to this growth.

Revenue by source

The following table shows revenue by source for the three months ended March 31, 2007 and 2006:

Equipment sales revenue decreased by 3% from the prior year. This decrease was primarily due to lower sales of mail finishing equipment in the U.S. and U.K. and lower placement of production mail equipment in Europe.

Supplies revenue increased by 21% from the prior year. This growth was primarily driven by our customers’ continued migration to digital technology, incremental revenue from the acquisition of our print management business in the third quarter of last year, which contributed 4%, and foreign currency translation, which contributed 3%.

Software revenue increased by 3% from the prior year driven by acquisitions.

Rentals revenue decreased from the prior year primarily due to customers continuing to downsize to smaller machines.

Financing revenue increased by 7% primarily due to higher revenue from payment solutions. Foreign currency translation accounted for 1% of this growth.

Support services revenue increased by 9% from the prior year period. This growth was primarily driven by higher service revenue from production mail and mailing equipment. Acquisitions contributed 3% and foreign currency translation contributed 2%.

Business services revenue increased by 6% from the prior year period. This growth was driven by higher revenue in mail and marketing services, acquisitions, which contributed 3%, and foreign currency translation, which accounted for 1%.

Revenue by source

Equipment sales increased 9% over the prior year due to strong growth in worldwide sales of digital mailing equipment and mail creation equipment; the acquisitions of Groupe MAG and Danka Canada, which contributed 3%; and the favorable impact of foreign currency, which contributed 1%.

Supplies revenue increased 10% over the prior year due to the meter base continuing to transition to digital technology.

Software revenue grew 79% primarily as a result of a full year’s revenue from Group 1 which was acquired in July 2004.

Rentals revenue remained flat compared with the prior year. Rentals revenue was negatively impacted by downsizing to smaller machines. At December 31, 2005, digital meters represented approximately 84% of our 1.3 million U.S. meter base, up from 75% in 2004.

Financing revenue increased 8% due primarily to growth in our worldwide equipment leasing volumes, higher revenue from payment solutions and the favorable impact of foreign currency which contributed 1%.

Support services revenue increased 12% due primarily to the acquisitions of Groupe MAG and Danka Canada, which in the aggregate contributed 9%; the favorable impact of foreign currency, which contributed 1%; a larger population of International and Production Mail equipment maintenance agreements; and the addition of hardware equipment services contracts from Standard Register Inc. in late 2004.

Business services revenue increased 17% due primarily to growth at our existing and new Mail Services sites and the acquisitions of IMEX, Ancora, Compulit, and Imagitas which contributed 9% in aggregate.

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