Pitney Bowes Achieves Revenue and Earnings Guidance in First Quarter 2001

- Diluted Earnings Per Share of 53 Cents, Before Restructuring Charge

- Revenue Growth of 2.3%

- Agreement to Acquire Danka Services International Expands Document

Services Solutions and Reach



Apr 17, 2001, 01:00 ET from Pitney Bowes Inc.

    STAMFORD, Conn., April 17 /PRNewswire/ -- Pitney Bowes Inc. (NYSE:   PBI)
 today announced first quarter results that featured growth in diluted earnings
 per share from continuing operations to 53 cents, excluding the restructuring
 charge, from 50 cents the year before. Revenue grew two percent during the
 quarter to $966.3 million. Income from continuing operations declined one
 percent to $131.6 million before the restructuring charge.
     During the quarter, as previously announced, the company recorded a pre-
 tax restructuring charge of  $75 million, of which $43 million was related to
 continuing operations, and the remaining $32 million related to discontinued
 operations. These costs are associated with infrastructure and process
 improvements, and the planned spin-off of the Office Systems business. The
 company expects to record an additional $25 million to $35 million in the
 second quarter of 2001 to complete the previously announced restructuring
 plan.
     Pitney Bowes Chairman and Chief Executive Officer Michael J. Critelli
 commented, "Pitney Bowes delivered revenue and earnings per share improvement
 during the quarter despite the fact that 2001 thus far has been a challenging
 year for most of corporate America. The continued, steady demand for our
 integrated mail and document management solutions in this economic
 environment, many of which are mission-critical to our customers, indicates
 that our products and services are just what many companies need to run their
 operations efficiently and reduce their costs. We also completed several
 strategic transactions during the quarter which will complement our suite of
 solutions for global customers of all sizes, positioning us for continued
 growth in the future.
     "We continue our focus on improving shareholder value by building our base
 of loyal customers, and by extension, a large recurring revenue stream. Using
 a combination of internal development, acquisitions and partnerships we are
 creating the advanced solutions that global customers require to support their
 growing and increasingly complex, integrated applications. This customer-
 focused market development pays off. Today, approximately 75 percent of our
 revenues are recurring in nature, providing financial stability in a
 challenging economic environment. Our strong balance sheet gives us the
 financial flexibility to make investments and acquisitions to grow the
 business."
     As previously announced, the company's recent acquisition activity
 exemplifies its strategic actions to expand internationally, meet the dynamic
 needs of global customers, and deliver shareholder value, according to Mr.
 Critelli. "It's good news for our customers and our shareholders that we have
 entered into an agreement to acquire Danka Services International (DSI), a
 division of Danka Business Systems. This business will strengthen our
 Enterprise Solutions segment which specializes in physical and electronic
 document management and high- volume mail production. In combination with
 other previously announced acquisition activity, the DSI agreement provides a
 solid platform for accelerated global growth, giving Pitney Bowes the critical
 mass, complementary technology and international presence to help customers
 optimize the management of the messages, money and business information
 contained in their integrated mail and document stream."
     The Global Mailing Segment includes worldwide revenues and related
 expenses from the sale, rental and financing of mail finishing, mail creation
 and shipping equipment, related supplies and services, postal payment
 solutions, small business solutions and software.  In the first quarter,
 Global Mailing revenue declined one percent while operating profit increased
 five percent. As in the prior two quarters, Global Mailing revenue comparisons
 to the prior year were adversely impacted by the loss of revenues associated
 with the sale of the credit card portfolio last year and the impact from
 unfavorable foreign currency during the quarter. Excluding the impact of these
 two factors, Global Mailing revenues increased three percent and operating
 profit increased six percent.
     The U.S. mail finishing business is performing as expected as
 administrative costs decline due to continuous process improvements. As
 anticipated, sales of mail creation and shipping products again
 underperformed, reflecting the need for a change in the sales process for
 these products. Though this effort is well underway, results do not yet
 reflect the positive effect we expect. During the quarter, the company formed
 a strategic partnership with Vertex Interactive Inc., a market-leading,
 e-business supply chain and fulfillment solutions provider. Under the
 agreement, the companies will jointly develop, offer and support a modular
 suite of integrated supply chain and shipping applications, extending Pitney
 Bowes' reach and capability in a fast-growing segment of this market.
     Additionally, within the Global Mailing segment, our international
 business continued to have strong growth in both revenues and operating profit
 on a local currency basis, helped by meter migration and Euro conversion
 requirements in several European countries. However, on a U.S. dollar basis,
 the Global Mailing segment revenue growth was reduced by one and one-half
 percentage points due to unfavorable foreign currency impacts, principally the
 British Pound, the Canadian Dollar and the Euro.
     The Enterprise Solutions Segment includes Pitney Bowes Management Services
 and Document Messaging Technologies (formerly Production Mail). Revenues from
 Management Services include facilities management contracts for advanced
 mailing, reprographic, document management and other added-value services to
 large enterprises. Revenues from Document Messaging Technologies include
 sales, service and financing of high speed, software-enabled production mail
 systems, sorting equipment, incoming mail systems, electronic statement,
 billing and payment solutions, and mailing software. The Enterprise Solutions
 segment, which represents nearly one-quarter of consolidated revenue, grew
 revenue 14 percent and operating profit grew 28 percent, the second
 consecutive quarter of double-digit growth for both revenue and operating
 profit.
     Pitney Bowes Management Services achieved its sixth consecutive quarter of
 improving revenue growth, recording a 15 percent increase over 2000. The
 growth in business came from both new, value-added services for existing
 clients, and new enterprise contracts through the acquisition of Services
 Integration Group, L.P., the outsourcing unit of Shell Services International
 Inc. Upon completion of the transaction referenced earlier, Danka Systems
 International will be integrated into Management Services. This acquisition is
 an important element in the Management Services' strategy to support global
 enterprises with sophisticated, high value document management throughout a
 document's physical and electronic lifecycle. The parties expect the
 transaction to close during the second quarter of 2001.
     Document Messaging Technologies revenues grew 12 percent during the
 quarter, while operating profit grew at a substantially greater rate. There
 continued to be solid worldwide demand for high-speed, software enabled
 production mail equipment and mail processing software. During the quarter,
 the M3(TM) Mixed Mail Manager System for incoming mail management was launched
 and the first installations were completed. In addition, the company's new
 subsidiary MailCode, Inc., a mail processing company that manufactures
 complementary incoming mail management and sorting equipment, also performed
 well.  DocSense continues to expand its customer base as the demand for
 versatile and reliable electronic bill and statement management grows. To
 further enhance its capabilities in this important and growing market, though
 not impacting the quarter's results, the company has entered into a merger
 agreement with Alysis Technologies, a leading provider of business-to-business
 and business-to-consumer digital document delivery solutions.
     Total Messaging Solutions, the combined results of the Global Mailing and
 Enterprise Solutions segments, reported a three percent increase in revenues
 and a seven percent increase in operating profit.
     The Capital Services Segment includes primarily asset- and fee-based
 income generated by financing or arranging transactions of critical large-
 ticket customer assets. Revenue for the quarter declined five percent,
 consistent with the company's ongoing objective to shift to fee-based
 transactions. Operating profit increased 12 percent for the quarter.
     During the quarter, the Company repurchased two million shares, leaving
 $228 million of authorization for future share repurchases. Free cash flow
 from continuing operations, excluding payments associated with the
 restructuring plan and spin-off, exceeded $120 million during the quarter.
     Compared to year 2000 results, the company expects revenue growth for the
 second quarter 2001 to be in the range of two to four percent and four to six
 percent for the second half of the year, prior to the inclusion of any
 revenues from the recently announced plan to acquire Danka Services
 International. Excluding restructuring charges, diluted earnings per share
 from continuing operations are expected to be in the range of 58 to 59 cents
 for the second quarter 2001 and $2.35 to $2.37 for the full year.
     First quarter 2001 revenue included $471.5 million from sales, up seven
 percent from $441.2 million in the first quarter of 2000; $368.0 million from
 rentals and financing, down three percent from $380.7 million; and
 $126.9 million from support services, up three percent from $122.9 million.
 Income from continuing operations for the period was $103.9 million, or
 42 cents per diluted share, or $131.6 million, or 53 cents per diluted share
 before the restructuring charge, compared to first-quarter 2000 income from
 continuing operations of $133.5 million, or 50 cents per diluted share. First
 quarter 2001 net income was $103.9 million or 42 cents per diluted share
 compared to first quarter 2000 net income of $146.9 or 55 cents per diluted
 share.  First quarter 2001 net income did not include any income from
 discontinued operations, while first quarter 2000 net income included
 $18.1 million of income from discontinued operations, or seven cents per
 diluted share and a $4.7 million charge from an accounting change or two cents
 per diluted share.
     Pitney Bowes is a $4 billion global provider of integrated mail, messaging
 and document management solutions headquartered in Stamford, Connecticut. The
 company serves over 2 million businesses of all sizes in more than
 130 countries through dealer and direct operations.
     The statements contained in this news release that are not purely
 historical are forward-looking statements with the meaning of Section 27A of
 the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
 1934. These statements may be identified by their use of forward-looking
 terminology such as the words "expects," "anticipates," "intends" and other
 similar words. Such forward-looking statements include, but are not limited
 to, statements about possible restructuring charges and our future guidance,
 including our expected revenue in the second quarter and full year 2001, and
 our expected diluted earnings per share from continuing operations for the
 second quarter and for the full year 2001. Such forward-looking statements
 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: severe adverse changes in the economic environment, timely
 development and acceptance of new products or gaining product approval;
 successful entry into new markets; changes in interest rates; and changes in
 postal regulations, as more fully outlined in the company's 2000 Form 10-K
 Annual Report filed with the Securities and Exchange Commission. In addition,
 the forward-looking statements are subject to change based on the timing and
 specific terms of the spin-off and any announced acquisitions. The forward-
 looking statements contained in this news release are made as of the date
 hereof and we do not assume any obligation to update the reasons why actual
 results could differ materially from those projected in the forward-looking
 statements.
 
     Note: Consolidated statements of income for the three months ended
 March 31, 2001 and 2000, and consolidated balance sheets at March 31, 2001,
 December 31, 2000, and March 31, 2000, are attached.
 
 
                               Pitney Bowes Inc.
                          Consolidated Balance Sheets
 
     (Dollars in thousands, except per share data)
                                   (Unaudited)                   (Unaudited)
     Assets                          03/31/01       12/31/00      03/31/00
 
     Current assets:
       Cash and cash equivalents    $194,386        $198,255      $219,063
       Short-term investments,
        at cost which approximates
        market                         1,572          15,250        19,126
       Accounts receivable,
        less allowances:
         03/01 $25,860
         12/00 $26,468
         03/00 $25,443               323,135         313,510       415,387
       Finance receivables,
        less allowances:
         03/01 $43,184
         12/00 $44,129
         03/00 $43,034             1,539,414       1,592,920     1,617,858
       Inventories                   184,734         167,969       262,595
       Other current assets
        and prepayments              168,177         145,786       152,870
       Net assets of
        discontinued operations      215,594         193,018            --
 
         Total current assets      2,627,012       2,626,708     2,686,899
 
     Property, plant and
      equipment, net                 492,749         491,312       484,812
     Rental equipment and
      related inventories, net       586,340         620,841       797,301
     Property leased under
      capital leases, net              2,098           2,303         2,800
     Long-term finance receivables,
      less allowances:
         03/01 $53,681
         12/00 $53,222
         03/00 $59,089             1,916,666       1,980,876     2,010,562
     Investment in leveraged
      leases                       1,169,389       1,150,656       987,297
     Goodwill, net of amortization:
         03/01 $60,423
         12/00 $58,658
         03/00 $56,628               219,859         203,447       229,180
     Other assets                    647,814         612,760       612,005
     Net assets of discontinued
      operations                     211,726         212,363            --
 
     Total assets                 $7,873,653      $7,901,266    $7,810,856
 
     Liabilities and stockholders' equity
     Current liabilities:
       Accounts payable and
        accrued liabilities       $1,004,469        $995,283      $903,565
       Income taxes payable          264,379         262,125       262,153
       Notes payable and current
        portion of long-term
        obligations                1,229,189       1,277,941       974,370
       Advance billings              339,297         346,228       380,620
 
         Total current liabilities 2,837,334       2,881,577     2,520,708
 
     Deferred taxes on income      1,240,225       1,226,597     1,122,865
     Long-term debt                1,911,636       1,881,947     2,037,860
     Other noncurrent liabilities    321,913         316,170       331,985
 
         Total liabilities         6,311,108       6,306,291     6,013,418
 
     Preferred stockholders'
      equity in a subsidiary
      company                        310,000         310,000       310,000
 
     Stockholders' equity:
       Cumulative preferred stock,
        $50 par value, 4%
        convertible                       29              29            29
       Cumulative preference stock,
        no par value,
        $2.12 convertible              1,695           1,737         1,809
       Common stock, $1 par value    323,338         323,338       323,338
       Capital in excess of
        par value                      7,972          10,298        13,479
       Retained earnings           3,798,924       3,766,995     3,509,010
       Accumulated other
        comprehensive income        (135,815)       (139,434)      (91,805)
       Treasury stock, at cost    (2,743,598)     (2,677,988)   (2,268,422)
 
         Total stockholders'
          equity                   1,252,545       1,284,975     1,487,438
 
     Total liabilities and
      stockholders' equity        $7,873,653      $7,901,266    $7,810,856
 
 
                                 Pitney Bowes Inc.
                         Consolidated Statements of Income
 
 
     (Dollars in thousands, except per share data)
                                                           (Unaudited)
                                                   Three Months Ended March 31,
                                                      2001               2000
     Revenue from:
      Sales                                         $471,472          $441,194
      Rentals and financing                          367,992           380,671
      Support services                               126,859           122,900
 
         Total revenue                               966,323           944,765
 
     Costs and expenses:
      Cost of sales                                  278,350           258,094
      Cost of rentals and financing                   90,833            99,916
      Selling, service and administrative            322,903           317,869
      Research and development                        31,602            29,511
      Interest, net                                   50,585            44,684
      Restructuring charge                            43,151                --
 
         Total costs and expenses                    817,424           750,074
 
     Income from continuing operations
      before income taxes                            148,899           194,691
 
     Provision for income taxes                       44,962            61,238
 
     Income from continuing operations               103,937           133,453
     Discontinued operations                              --            18,100
     Cumulative effect of accounting change               --            (4,683)
 
     Net income                                      103,937           146,870
      Restructuring charge after-tax                  27,617                --
 
     Net income excluding restructuring charge      $131,554          $146,870
 
     Basic earnings per share
       Continuing operations                           $0.42             $0.51
       Discontinued operations                            --              0.07
       Cumulative effect of accounting
        change                                            --             (0.02)
 
       Net income                                       0.42              0.56
         Restructuring charge                           0.11                --
 
        Net income excluding restructuring charge      $0.53             $0.56
 
     Diluted earnings per share
       Continuing operations                           $0.42             $0.50
       Discontinued operations                            --              0.07
       Cumulative effect of accounting change             --             (0.02)
       Net income                                       0.42              0.55
         Restructuring charge                           0.11                --
 
        Net income excluding restructuring charge      $0.53             $0.55
 
     Average common and potential common
      shares outstanding                         249,760,556       266,033,984
 
                               Pitney Bowes Inc.
                          Revenue and Operating Profit
                              By Business Segment
                                 March 31, 2001
                                  (Unaudited)
 
     (Dollars in thousands)
                                                                        %
                                      2001            2000            Change
     First Quarter
 
       Revenue
 
       Global Mailing               $692,736        $698,051           (1%)
       Enterprise Solutions          230,590         201,537           14%
 
         Total Messaging Solutions   923,326         899,588            3%
 
       Capital Services               42,997          45,177           (5%)
 
         Total Revenue              $966,323        $944,765            2%
 
       Operating Profit (1)
 
       Global Mailing               $207,171        $197,177            5%
       Enterprise Solutions           18,819          14,695           28%
 
         Total Messaging Solutions   225,990         211,872            7%
 
       Capital Services               14,705          13,121           12%
 
         Total Operating Profit     $240,695        $224,993            7%
 
     (1) Operating profit excludes general corporate expenses, income taxes
         and net interest other than that related to finance operations.
 
 

SOURCE Pitney Bowes Inc.
    STAMFORD, Conn., April 17 /PRNewswire/ -- Pitney Bowes Inc. (NYSE:   PBI)
 today announced first quarter results that featured growth in diluted earnings
 per share from continuing operations to 53 cents, excluding the restructuring
 charge, from 50 cents the year before. Revenue grew two percent during the
 quarter to $966.3 million. Income from continuing operations declined one
 percent to $131.6 million before the restructuring charge.
     During the quarter, as previously announced, the company recorded a pre-
 tax restructuring charge of  $75 million, of which $43 million was related to
 continuing operations, and the remaining $32 million related to discontinued
 operations. These costs are associated with infrastructure and process
 improvements, and the planned spin-off of the Office Systems business. The
 company expects to record an additional $25 million to $35 million in the
 second quarter of 2001 to complete the previously announced restructuring
 plan.
     Pitney Bowes Chairman and Chief Executive Officer Michael J. Critelli
 commented, "Pitney Bowes delivered revenue and earnings per share improvement
 during the quarter despite the fact that 2001 thus far has been a challenging
 year for most of corporate America. The continued, steady demand for our
 integrated mail and document management solutions in this economic
 environment, many of which are mission-critical to our customers, indicates
 that our products and services are just what many companies need to run their
 operations efficiently and reduce their costs. We also completed several
 strategic transactions during the quarter which will complement our suite of
 solutions for global customers of all sizes, positioning us for continued
 growth in the future.
     "We continue our focus on improving shareholder value by building our base
 of loyal customers, and by extension, a large recurring revenue stream. Using
 a combination of internal development, acquisitions and partnerships we are
 creating the advanced solutions that global customers require to support their
 growing and increasingly complex, integrated applications. This customer-
 focused market development pays off. Today, approximately 75 percent of our
 revenues are recurring in nature, providing financial stability in a
 challenging economic environment. Our strong balance sheet gives us the
 financial flexibility to make investments and acquisitions to grow the
 business."
     As previously announced, the company's recent acquisition activity
 exemplifies its strategic actions to expand internationally, meet the dynamic
 needs of global customers, and deliver shareholder value, according to Mr.
 Critelli. "It's good news for our customers and our shareholders that we have
 entered into an agreement to acquire Danka Services International (DSI), a
 division of Danka Business Systems. This business will strengthen our
 Enterprise Solutions segment which specializes in physical and electronic
 document management and high- volume mail production. In combination with
 other previously announced acquisition activity, the DSI agreement provides a
 solid platform for accelerated global growth, giving Pitney Bowes the critical
 mass, complementary technology and international presence to help customers
 optimize the management of the messages, money and business information
 contained in their integrated mail and document stream."
     The Global Mailing Segment includes worldwide revenues and related
 expenses from the sale, rental and financing of mail finishing, mail creation
 and shipping equipment, related supplies and services, postal payment
 solutions, small business solutions and software.  In the first quarter,
 Global Mailing revenue declined one percent while operating profit increased
 five percent. As in the prior two quarters, Global Mailing revenue comparisons
 to the prior year were adversely impacted by the loss of revenues associated
 with the sale of the credit card portfolio last year and the impact from
 unfavorable foreign currency during the quarter. Excluding the impact of these
 two factors, Global Mailing revenues increased three percent and operating
 profit increased six percent.
     The U.S. mail finishing business is performing as expected as
 administrative costs decline due to continuous process improvements. As
 anticipated, sales of mail creation and shipping products again
 underperformed, reflecting the need for a change in the sales process for
 these products. Though this effort is well underway, results do not yet
 reflect the positive effect we expect. During the quarter, the company formed
 a strategic partnership with Vertex Interactive Inc., a market-leading,
 e-business supply chain and fulfillment solutions provider. Under the
 agreement, the companies will jointly develop, offer and support a modular
 suite of integrated supply chain and shipping applications, extending Pitney
 Bowes' reach and capability in a fast-growing segment of this market.
     Additionally, within the Global Mailing segment, our international
 business continued to have strong growth in both revenues and operating profit
 on a local currency basis, helped by meter migration and Euro conversion
 requirements in several European countries. However, on a U.S. dollar basis,
 the Global Mailing segment revenue growth was reduced by one and one-half
 percentage points due to unfavorable foreign currency impacts, principally the
 British Pound, the Canadian Dollar and the Euro.
     The Enterprise Solutions Segment includes Pitney Bowes Management Services
 and Document Messaging Technologies (formerly Production Mail). Revenues from
 Management Services include facilities management contracts for advanced
 mailing, reprographic, document management and other added-value services to
 large enterprises. Revenues from Document Messaging Technologies include
 sales, service and financing of high speed, software-enabled production mail
 systems, sorting equipment, incoming mail systems, electronic statement,
 billing and payment solutions, and mailing software. The Enterprise Solutions
 segment, which represents nearly one-quarter of consolidated revenue, grew
 revenue 14 percent and operating profit grew 28 percent, the second
 consecutive quarter of double-digit growth for both revenue and operating
 profit.
     Pitney Bowes Management Services achieved its sixth consecutive quarter of
 improving revenue growth, recording a 15 percent increase over 2000. The
 growth in business came from both new, value-added services for existing
 clients, and new enterprise contracts through the acquisition of Services
 Integration Group, L.P., the outsourcing unit of Shell Services International
 Inc. Upon completion of the transaction referenced earlier, Danka Systems
 International will be integrated into Management Services. This acquisition is
 an important element in the Management Services' strategy to support global
 enterprises with sophisticated, high value document management throughout a
 document's physical and electronic lifecycle. The parties expect the
 transaction to close during the second quarter of 2001.
     Document Messaging Technologies revenues grew 12 percent during the
 quarter, while operating profit grew at a substantially greater rate. There
 continued to be solid worldwide demand for high-speed, software enabled
 production mail equipment and mail processing software. During the quarter,
 the M3(TM) Mixed Mail Manager System for incoming mail management was launched
 and the first installations were completed. In addition, the company's new
 subsidiary MailCode, Inc., a mail processing company that manufactures
 complementary incoming mail management and sorting equipment, also performed
 well.  DocSense continues to expand its customer base as the demand for
 versatile and reliable electronic bill and statement management grows. To
 further enhance its capabilities in this important and growing market, though
 not impacting the quarter's results, the company has entered into a merger
 agreement with Alysis Technologies, a leading provider of business-to-business
 and business-to-consumer digital document delivery solutions.
     Total Messaging Solutions, the combined results of the Global Mailing and
 Enterprise Solutions segments, reported a three percent increase in revenues
 and a seven percent increase in operating profit.
     The Capital Services Segment includes primarily asset- and fee-based
 income generated by financing or arranging transactions of critical large-
 ticket customer assets. Revenue for the quarter declined five percent,
 consistent with the company's ongoing objective to shift to fee-based
 transactions. Operating profit increased 12 percent for the quarter.
     During the quarter, the Company repurchased two million shares, leaving
 $228 million of authorization for future share repurchases. Free cash flow
 from continuing operations, excluding payments associated with the
 restructuring plan and spin-off, exceeded $120 million during the quarter.
     Compared to year 2000 results, the company expects revenue growth for the
 second quarter 2001 to be in the range of two to four percent and four to six
 percent for the second half of the year, prior to the inclusion of any
 revenues from the recently announced plan to acquire Danka Services
 International. Excluding restructuring charges, diluted earnings per share
 from continuing operations are expected to be in the range of 58 to 59 cents
 for the second quarter 2001 and $2.35 to $2.37 for the full year.
     First quarter 2001 revenue included $471.5 million from sales, up seven
 percent from $441.2 million in the first quarter of 2000; $368.0 million from
 rentals and financing, down three percent from $380.7 million; and
 $126.9 million from support services, up three percent from $122.9 million.
 Income from continuing operations for the period was $103.9 million, or
 42 cents per diluted share, or $131.6 million, or 53 cents per diluted share
 before the restructuring charge, compared to first-quarter 2000 income from
 continuing operations of $133.5 million, or 50 cents per diluted share. First
 quarter 2001 net income was $103.9 million or 42 cents per diluted share
 compared to first quarter 2000 net income of $146.9 or 55 cents per diluted
 share.  First quarter 2001 net income did not include any income from
 discontinued operations, while first quarter 2000 net income included
 $18.1 million of income from discontinued operations, or seven cents per
 diluted share and a $4.7 million charge from an accounting change or two cents
 per diluted share.
     Pitney Bowes is a $4 billion global provider of integrated mail, messaging
 and document management solutions headquartered in Stamford, Connecticut. The
 company serves over 2 million businesses of all sizes in more than
 130 countries through dealer and direct operations.
     The statements contained in this news release that are not purely
 historical are forward-looking statements with the meaning of Section 27A of
 the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
 1934. These statements may be identified by their use of forward-looking
 terminology such as the words "expects," "anticipates," "intends" and other
 similar words. Such forward-looking statements include, but are not limited
 to, statements about possible restructuring charges and our future guidance,
 including our expected revenue in the second quarter and full year 2001, and
 our expected diluted earnings per share from continuing operations for the
 second quarter and for the full year 2001. Such forward-looking statements
 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: severe adverse changes in the economic environment, timely
 development and acceptance of new products or gaining product approval;
 successful entry into new markets; changes in interest rates; and changes in
 postal regulations, as more fully outlined in the company's 2000 Form 10-K
 Annual Report filed with the Securities and Exchange Commission. In addition,
 the forward-looking statements are subject to change based on the timing and
 specific terms of the spin-off and any announced acquisitions. The forward-
 looking statements contained in this news release are made as of the date
 hereof and we do not assume any obligation to update the reasons why actual
 results could differ materially from those projected in the forward-looking
 statements.
 
     Note: Consolidated statements of income for the three months ended
 March 31, 2001 and 2000, and consolidated balance sheets at March 31, 2001,
 December 31, 2000, and March 31, 2000, are attached.
 
 
                               Pitney Bowes Inc.
                          Consolidated Balance Sheets
 
     (Dollars in thousands, except per share data)
                                   (Unaudited)                   (Unaudited)
     Assets                          03/31/01       12/31/00      03/31/00
 
     Current assets:
       Cash and cash equivalents    $194,386        $198,255      $219,063
       Short-term investments,
        at cost which approximates
        market                         1,572          15,250        19,126
       Accounts receivable,
        less allowances:
         03/01 $25,860
         12/00 $26,468
         03/00 $25,443               323,135         313,510       415,387
       Finance receivables,
        less allowances:
         03/01 $43,184
         12/00 $44,129
         03/00 $43,034             1,539,414       1,592,920     1,617,858
       Inventories                   184,734         167,969       262,595
       Other current assets
        and prepayments              168,177         145,786       152,870
       Net assets of
        discontinued operations      215,594         193,018            --
 
         Total current assets      2,627,012       2,626,708     2,686,899
 
     Property, plant and
      equipment, net                 492,749         491,312       484,812
     Rental equipment and
      related inventories, net       586,340         620,841       797,301
     Property leased under
      capital leases, net              2,098           2,303         2,800
     Long-term finance receivables,
      less allowances:
         03/01 $53,681
         12/00 $53,222
         03/00 $59,089             1,916,666       1,980,876     2,010,562
     Investment in leveraged
      leases                       1,169,389       1,150,656       987,297
     Goodwill, net of amortization:
         03/01 $60,423
         12/00 $58,658
         03/00 $56,628               219,859         203,447       229,180
     Other assets                    647,814         612,760       612,005
     Net assets of discontinued
      operations                     211,726         212,363            --
 
     Total assets                 $7,873,653      $7,901,266    $7,810,856
 
     Liabilities and stockholders' equity
     Current liabilities:
       Accounts payable and
        accrued liabilities       $1,004,469        $995,283      $903,565
       Income taxes payable          264,379         262,125       262,153
       Notes payable and current
        portion of long-term
        obligations                1,229,189       1,277,941       974,370
       Advance billings              339,297         346,228       380,620
 
         Total current liabilities 2,837,334       2,881,577     2,520,708
 
     Deferred taxes on income      1,240,225       1,226,597     1,122,865
     Long-term debt                1,911,636       1,881,947     2,037,860
     Other noncurrent liabilities    321,913         316,170       331,985
 
         Total liabilities         6,311,108       6,306,291     6,013,418
 
     Preferred stockholders'
      equity in a subsidiary
      company                        310,000         310,000       310,000
 
     Stockholders' equity:
       Cumulative preferred stock,
        $50 par value, 4%
        convertible                       29              29            29
       Cumulative preference stock,
        no par value,
        $2.12 convertible              1,695           1,737         1,809
       Common stock, $1 par value    323,338         323,338       323,338
       Capital in excess of
        par value                      7,972          10,298        13,479
       Retained earnings           3,798,924       3,766,995     3,509,010
       Accumulated other
        comprehensive income        (135,815)       (139,434)      (91,805)
       Treasury stock, at cost    (2,743,598)     (2,677,988)   (2,268,422)
 
         Total stockholders'
          equity                   1,252,545       1,284,975     1,487,438
 
     Total liabilities and
      stockholders' equity        $7,873,653      $7,901,266    $7,810,856
 
 
                                 Pitney Bowes Inc.
                         Consolidated Statements of Income
 
 
     (Dollars in thousands, except per share data)
                                                           (Unaudited)
                                                   Three Months Ended March 31,
                                                      2001               2000
     Revenue from:
      Sales                                         $471,472          $441,194
      Rentals and financing                          367,992           380,671
      Support services                               126,859           122,900
 
         Total revenue                               966,323           944,765
 
     Costs and expenses:
      Cost of sales                                  278,350           258,094
      Cost of rentals and financing                   90,833            99,916
      Selling, service and administrative            322,903           317,869
      Research and development                        31,602            29,511
      Interest, net                                   50,585            44,684
      Restructuring charge                            43,151                --
 
         Total costs and expenses                    817,424           750,074
 
     Income from continuing operations
      before income taxes                            148,899           194,691
 
     Provision for income taxes                       44,962            61,238
 
     Income from continuing operations               103,937           133,453
     Discontinued operations                              --            18,100
     Cumulative effect of accounting change               --            (4,683)
 
     Net income                                      103,937           146,870
      Restructuring charge after-tax                  27,617                --
 
     Net income excluding restructuring charge      $131,554          $146,870
 
     Basic earnings per share
       Continuing operations                           $0.42             $0.51
       Discontinued operations                            --              0.07
       Cumulative effect of accounting
        change                                            --             (0.02)
 
       Net income                                       0.42              0.56
         Restructuring charge                           0.11                --
 
        Net income excluding restructuring charge      $0.53             $0.56
 
     Diluted earnings per share
       Continuing operations                           $0.42             $0.50
       Discontinued operations                            --              0.07
       Cumulative effect of accounting change             --             (0.02)
       Net income                                       0.42              0.55
         Restructuring charge                           0.11                --
 
        Net income excluding restructuring charge      $0.53             $0.55
 
     Average common and potential common
      shares outstanding                         249,760,556       266,033,984
 
                               Pitney Bowes Inc.
                          Revenue and Operating Profit
                              By Business Segment
                                 March 31, 2001
                                  (Unaudited)
 
     (Dollars in thousands)
                                                                        %
                                      2001            2000            Change
     First Quarter
 
       Revenue
 
       Global Mailing               $692,736        $698,051           (1%)
       Enterprise Solutions          230,590         201,537           14%
 
         Total Messaging Solutions   923,326         899,588            3%
 
       Capital Services               42,997          45,177           (5%)
 
         Total Revenue              $966,323        $944,765            2%
 
       Operating Profit (1)
 
       Global Mailing               $207,171        $197,177            5%
       Enterprise Solutions           18,819          14,695           28%
 
         Total Messaging Solutions   225,990         211,872            7%
 
       Capital Services               14,705          13,121           12%
 
         Total Operating Profit     $240,695        $224,993            7%
 
     (1) Operating profit excludes general corporate expenses, income taxes
         and net interest other than that related to finance operations.
 
 SOURCE  Pitney Bowes Inc.