PITNEY BOWES ANNOUNCES FIRST QUARTER RESULTS

STAMFORD, Conn., April 24 /PRNewswire-FirstCall/ -- Pitney Bowes Inc.
(NYSE: PBI) today reported first quarter 2006 financial results.

Commenting on the company's financial performance during the quarter, Chairman
and CEO Michael J. Critelli noted, "I am very pleased that we have started the
year on such a solid footing with a well diversified base of revenue and
earnings growth and significant free cash flow. Our performance this quarter was
driven by our expanded presence in the mailstream and our ability to provide a
wide array of innovative solutions for managing the physical and electronic mail
and document flows for customers of all sizes."

FIRST QUARTER 2006 RESULTS

For the first quarter 2006, revenue increased seven percent to $1.4 billion and
earnings before interest and taxes (EBIT) increased 11 percent to $298 million.
Net income for the quarter was $153.5 million or $.67 per diluted share versus
$.62 in the prior year. Net income included an after-tax charge of $4 million or
$.02 per diluted share as part of an ongoing restructuring program.

Excluding the impact of restructuring in both periods and the contribution to
charitable foundations in the first quarter of 2005, adjusted diluted earnings
per share was $.69 this quarter versus $.61 in the prior year. The company is
continuing to review various disposition alternatives for its Capital Services
business. This business contributed $.05 per diluted share this quarter versus
$.03 per diluted share in the prior year.

The company generated $267 million in cash from operations during the quarter.
Adjusted free cash flow was $203 million. Adjusted free cash flow reflects cash
from operations after subtracting capital expenditures and excluding the
restructuring charges.

The company used $152 million to repurchase 3.6 million of its shares during the
quarter and has $389 million of remaining authorization for future share
repurchases.

Global Mailstream Solutions includes worldwide revenue and related expenses from
the sale, rental, and financing of mail finishing, mail creation, shipping, and
production mail equipment; supplies; support services; payment solutions; and
mailing and customer communication software.

In the first quarter, Global Mailstream Solutions revenue increased four percent
to $972 million and EBIT increased five percent to $284 million, when compared
with the prior year.

Revenue from mailing in the U.S. increased five percent to $578 million and EBIT
grew six percent to $228 million. Revenue growth was favorably impacted by
continued demand for networked digital mailing systems and related financing and
supplies. However, revenue from rentals and support services was negatively
impacted by the continued changing mix of the company's product line toward
fully featured smaller systems.

Revenue from document messaging technologies (DMT) in the U.S. grew eight
percent during the quarter to $98 million and EBIT grew 82 percent to $6
million. Revenue growth benefited from increased placements of high-speed
inserters and growth at Group 1 Software, driven by sales of its business
geographics software.

Revenue outside of the U.S. grew one percent to $296 million and EBIT declined
three percent to $50 million. Non-U.S. revenue was adversely affected by foreign
currency translation; weakness in the DMT business in Europe; and sluggish
performance in Canada. However, the company experienced continued growth with
small business customers, financing and supplies for digital mailing systems.
EBIT was negatively impacted during the quarter by foreign currency translation
and greater than expected transitional expenses related to European and Canadian
restructuring.

Global Business Services includes worldwide revenue and related expenses from
facilities management contracts, reprographics, document management, and other
value-added services to key vertical markets; and mail services operations,
which include presort mail services, international outbound mail services, and
direct mail marketing services.


For the quarter, Global Business Services reported revenue growth of 11 percent
to $386 million and EBIT growth of 87 percent to $32 million, versus the prior
year.

Management services had flat revenue growth for the quarter at $268 million and
a 47 percent increase in EBIT to $21 million. These results were consistent with
the company's strategy to exit unprofitable accounts and focus on offering
higher value services and reducing administrative costs. Stronger than expected
performance in the U.S. was partially offset by a revenue decline in Europe.

Mail services revenue grew 46 percent versus the first quarter of the prior year
to $119 million and EBIT increased 255 percent to $12 million. Revenue benefited
from the continued growth in presort and international mail services and the
acquisition of Imagitas in the second quarter of 2005. EBIT improved as a result
of the successful integration of recently acquired sites and the consolidation
of lower margin locations.

Capital Services revenue for the quarter increased 37 percent to $46 million and
EBIT increased 72 percent to $33 million. The quarter's results included asset
sales that added an incremental $.03 per diluted share. The results also
included higher revenue, EBIT and interest expense due to the revision of the
accounting for certain leveraged leases to operating leases that took effect at
the end of 2005. This revision in accounting did not impact net income.

On March 9, 2006, the company announced that, consistent with its previously
stated desire to exit the Capital Services business in a way that maximizes
shareholder value, it would explore a broader range of asset and business
disposition options, including a spin-off, a sale of the business, or a sale of
all or a portion of the assets. The company intends to reach a conclusion in the
near future on the best alternative to pursue.

In the meantime, the company will continue to manage the Capital Services
business to maximize its value for shareholders, as evidenced by the asset sales
it has completed over the past several quarters and its announcement that it has
signed a definitive agreement to sell the Imagistics lease portfolio. The sale
of the Imagistics lease portfolio will no longer be contingent on a supplemental
ruling from the IRS as it relates to a potential spin-off of the Capital
Services external financing business. Therefore, the company expects the sale of
this portfolio to close shortly.

Second Quarter and Full Year 2006 Outlook

The company anticipates second quarter revenue growth in the range of five to
seven percent and diluted earnings per share in the range of $.62 to $.69,
including $.01 to $.04 of restructuring charges. Excluding restructuring
charges, adjusted diluted earnings per share for the second quarter are expected
to be in the range of $.66 to $.70. The earnings per share estimates for the
second quarter include $.01 to $.03 of earnings from the Capital Services
business.

For the full year 2006, the company increased its guidance for revenue growth to
five to seven percent and increased its expected diluted earnings per share by
$.03 to the range of $2.67 to $2.82. Excluding the $.05 to $.10 per share of
anticipated restructuring charges for the year, adjusted earnings per share is
expected to be in the range of $2.77 to $2.87. Included in the earnings per
share estimates for the full year 2006 is $.08 to $.10 from the Capital Services
business.

Management of Pitney Bowes will discuss the company's results in a conference
call today at 5:00 p.m. EDT. Instructions for listening to the conference call
over the WEB are available on the Investor Relations page of the company's web
site at http://www.pb.com/investorrelations.

Pitney Bowes engineers the flow of communication. The company is a $5.6 billion
global leader of mailstream solutions headquartered in Stamford, Connecticut.
For more information about the company, its products, services and solutions,
visit http://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 often reflect retooling of the business in an episodic
way. Although they represent actual expenses to the company, these episodic
charges might mask the periodic income associated with our business had there
not been a retooling. 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 made different decisions about employing its cash. It adjusts for
long-term commitments such as capital expenditures, as well as special items
like cash used for restructuring charges and contributions to its pension funds.
Of course, these items use cash that is not otherwise available to the company
and are important expenditures. Management compensates for these limitations by
using a combination of GAAP cash flow and free cash flow in doing its planning.

The adjusted financial information and certain financial measures such as EBIT
are intended to be more indicative of the ongoing operations and economic
results of the company. EBIT excludes interest payments and taxes, both cash
items, and as a result, has the effect of showing a greater amount of earnings
than net income. The company uses EBIT, in addition to net income, for purposes
of measuring the performance of its unit management team. The interest rates and
tax rates applicable to the company generally are outside the control of
management, and it can be useful to judge performance independent of those
variables.

The adjusted financial information should be viewed as a supplement to, rather
than a replacement for, the financial results reported in accordance with GAAP.
Further, our definition of this adjusted financial information may differ from
similarly titled measures used by other companies.

Pitney Bowes has provided in supplemental schedules attached for reference
adjusted financial information and a quantitative reconciliation of the
differences between the adjusted financial measures with the financial measures
calculated and presented in accordance with GAAP, except with respect to our
guidance because it would not be meaningful. Additional reconciliation of
adjusted financial measures to financial measures calculated and presented in
accordance with GAAP may be found at the company's web site
http://www.pb.com/investorrelations in the Investor Relations section.

The information contained in this document is as of April 24, 2006. Quarterly
results are preliminary and unaudited. This document contains "forward-looking
statements" about our expected future business and financial performance. Pitney
Bowes assumes no obligation to update any forward-looking statements contained
in this document as a result of new information or future events or
developments. Words such as "estimate," "project," "plan," "believe," "expect,"
"anticipate," "intend," and similar expressions may identify forward-looking
statements. For us forward-looking statements include, but re not limited to,
statements about possible restructuring charges and our future guidance,
including our expected revenue in the second quarter and full year 2006, and our
expected diluted earnings per share for the second quarter and for the full year
2006. 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: negative developments in economic
conditions, including adverse impacts on customer demand, 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 2005 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 any announced
acquisitions or dispositions.

Note: Consolidated statements of income for the three months ended March 31,
2006 and 2005, and consolidated balance sheets at March 31, 2006, December 31,
2005, and March 31, 2005, are attached.



Pitney Bowes Inc.
Consolidated Statements of Income
(Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended March 31,
2006 2005 (1)
Revenue from:
Sales $405,778 $381,427
Rentals 196,812 201,641
Financing 174,996 157,275
Support services 194,543 194,934
Business services 386,368 349,103
Capital Services 45,607 33,408

Total revenue 1,404,104 1,317,788

Costs and expenses:
Cost of sales 177,446 168,221
Cost of rentals 43,539 42,317
Cost of support services 102,615 100,366
Cost of business services 306,326 289,110
Selling, general and administrative 439,865 413,810
Research and development 41,536 41,778
Interest, net 65,330 46,816
Restructuring charge 5,597 (15,840)
Other (income)/expense (10,599) 10,000

Total costs and expenses 1,171,655 1,096,578

Income from continuing operations
before income taxes 232,449 221,210

Provision for income taxes 78,921 75,935

Income from continuing operations 153,528 145,275
Discontinued operations -- --

Net income $153,528 $145,275

Basic earnings per share
Continuing operations $0.68 $0.63
Discontinued operations -- --

Net income $0.68 $0.63

Diluted earnings per share
Continuing operations $0.67 $0.62
Discontinued operations -- --

Net income $0.67 $0.62

Average common and potential common
shares outstanding 228,921,497 233,739,116

(1) Prior year amounts have been reclassified to conform with the current year
presentation.



Pitney Bowes Inc.
Consolidated Balance Sheets
(Unaudited)

(Dollars in thousands, except per share data)

Assets 03/31/06 12/31/05(1) 03/31/05(1)
Current assets:
Cash and cash equivalents $195,341 $243,509 $322,544
Short-term investments, at
cost which approximates market 70,795 56,193 13,706
Accounts receivable, less
allowances: 03/06 $46,646
12/05 $46,261 03/05 $49,353 660,270 658,198 596,435
Finance receivables,
less allowances: 03/06 $56,488
12/05 $52,622 03/05 $69,172 1,425,953 1,342,446 1,346,786
Inventories 225,870 220,918 224,095
Other current assets and
prepayments 215,225 221,051 201,748

Total current assets 2,793,454 2,742,315 2,705,314

Property, plant and equipment, net 615,544 621,954 638,811
Rental property and equipment, net 1,006,466 1,022,031 1,041,157
Property leased under capital
leases, net 2,673 2,611 2,897
Long-term finance receivables,
less allowances: 03/06 $70,133
12/05 $76,240 03/05 $92,910 1,831,442 1,841,673 1,765,218
Investment in leveraged leases
1,413,717 1,470,025 1,441,678
Goodwill 1,646,883 1,611,786 1,437,679
Intangible assets, net 349,564 347,414 315,593
Other assets 928,719 961,573 846,508

Total assets $10,588,462 $10,621,382 $10,194,855

Liabilities and stockholders'
equity
Current liabilities:
Accounts payable and accrued
liabilities $1,453,640 $1,538,860 $1,427,383
Income taxes payable 85,806 55,903 259,897
Notes payable and current portion
of long-term obligations 894,232 857,742 792,489
Advance billings 496,535 458,392 466,329

Total current liabilities 2,930,213 2,910,897 2,946,098

Deferred taxes on income 1,907,769 1,859,950 1,694,975
Long-term debt 3,778,208 3,849,623 3,519,365
Other noncurrent liabilities 313,673 326,663 341,961

Total liabilities 8,929,863 8,947,133 8,502,399

Preferred stockholders' equity
in a subsidiary company 310,000 310,000 310,000

Stockholders' equity:
Cumulative preferred stock, $50
par value, 4% convertible 17 17 17
Cumulative preference stock, no
par value, $2.12 convertible 1,140 1,158 1,235
Common stock, $1 par value 323,338 323,338 323,338
Capital in excess of par value 199,929 198,213 177,862
Retained earnings 4,430,100 4,349,146 4,198,635
Accumulated other comprehensive
income 97,125 76,917 121,540
Treasury stock, at cost (3,703,050) (3,584,540) (3,440,171)

Total stockholders' equity 1,348,599 1,364,249 1,382,456

Total liabilities and
stockholders' equity $10,588,462 $10,621,382 $10,194,855

(1) Prior period amounts have been reclassified to conform with the current
year presentation.



Pitney Bowes Inc.
Revenue and EBIT
Business Segments
March 31, 2006
(Unaudited)

(Dollars in thousands)
%
2006 2005 (2) Change
First Quarter

Revenue

Inside the U.S. - Mailing $578,364 $552,700 5%
- DMT 98,010 91,118 8%
Outside the U.S. 295,755 291,459 1%
Global Mailstream Solutions 972,129 935,277 4%

Global Management Services 267,503 267,905 0%
Mail Services 118,865 81,198 46%
Global Business Services 386,368 349,103 11%

Capital Services 45,607 33,408 37%

Total Revenue $1,404,104 $1,317,788 7%

EBIT (1)

Inside the U.S. - Mailing $228,138 $215,876 6%
- DMT 6,432 3,541 82%
Outside the U.S. 49,805 51,484 (3%)
Global Mailstream Solutions 284,375 270,901 5%

Global Management Services 20,531 13,991 47%
Mail Services 11,807 3,323 255%
Global Business Services 32,338 17,314 87%

Capital Services 33,376 19,454 72%

Total EBIT $350,089 $307,669 14%

Unallocated amounts:
Interest, net (65,330) (46,816)
Corporate expense (46,713) (45,483)
Restructuring charge (5,597) 15,840
Other expense -- (10,000)
Income before income taxes $232,449 $221,210


(1) Earnings before interest and taxes (EBIT) excludes general corporate
expenses.

(2) Prior year amounts have been reclassified to conform with the current year
presentation.


Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted Results
(Unaudited)

(Dollars in thousands, except per share amounts)

Three months ended March 31,
2006 2005

GAAP income from continuing operations
before income taxes, as reported $232,449 $221,210
Restructuring charge 5,597 (15,840)
Contributions to charitable foundations -- 10,000
Income from continuing operations
before income taxes, as adjusted 238,046 215,370
Provision for income taxes, as
adjusted above 80,936 73,226
Income from continuing operations, as
adjusted $157,110 $142,144


GAAP diluted earnings per share, as reported $0.67 $0.62
Restructuring charge 0.02 (0.04)
Contributions to charitable foundations -- 0.03
Diluted earnings per share from continuing
operations, as adjusted $0.69 $0.61


GAAP net cash provided by operating
activities, as reported $267,066 $192,359
Capital expenditures (83,015) (79,539)
Restructuring payments 19,250 21,292
Contributions to charitable
foundations -- 10,000
Free cash flow, as adjusted $203,301 $144,112


Note: The sum of the earnings per share amounts may not equal the totals
above due to rounding.

Editorial - Sheryl Y. Battles
VP, Corp. Communications
203/351-6808