10-K405: Annual report [Sections 13 and 15(d), S-K Item 405]

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
FORM 10-K


X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
- ----
OF 1934

For the year ended December 31, 1999

OR

___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ____________to _______________

Commission file number 1-3579

PITNEY BOWES INC.

State of Incorporation IRS Employer Identification No.
Delaware 06-0495050

World Headquarters
Stamford, Connecticut 06926-0700
Telephone Number: (203) 356-5000

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each class which registered
------------------- ------------------------

Common Stock ($1 par value) New York Stock Exchange

$2.12 Convertible Cumulative New York Stock Exchange
Preference Stock (no par value)

Preference Share Purchase Rights New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

4% Convertible Cumulative Preferred Stock ($50 par value)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.

Yes X No ____
----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of voting stock (common stock and $2.12 preference
stock) held by non-affiliates of the Registrant as of March 10, 2000 is
$12,126,751,929.

Number of shares of common stock, $1 par value, outstanding as of March 10, 2000
is 262,192,195.

DOCUMENTS INCORPORATED BY REFERENCE:

1. Only the following portions of the Pitney Bowes Inc. 1999 Annual Report to
Stockholders are incorporated by reference into Parts I, II and IV of this
Form 10-K Annual Report:

(a) Financial Statements, pages 48 to 69.

(b) Management's Discussion and Analysis of Financial Condition and
Results of Operations and Summary of Selected Financial Data on pages
37 to 47, excluding the information on page 46 relating to Dividend
Policy.

(c) Stock Exchanges and Stock Information, on page 70.

2. Pitney Bowes Inc. Notice of the 2000 Annual Meeting and Proxy Statement
dated March 31, 2000, pages 4 to 7, 10 to 13 and 17 and portions of pages
3, 9, 14, 16 and 18 are incorporated by reference into Part III of this
Form 10-K Annual Report.

PART I
------

Item 1. Business
--------

Pitney Bowes Inc. and its subsidiaries (the company) operate in three reportable
segments: Mailing and Integrated Logistics, Office Solutions and Capital
Services. The company operates in the United States and outside the U.S.
Financial information concerning revenue, operating profit and identifiable
assets by reportable segment and geographic area appears on pages 65 to 67 of
the Pitney Bowes Inc. 1999 Annual Report to Stockholders and is incorporated
herein by reference.

Mailing and Integrated Logistics. Mailing and Integrated Logistics includes
- --------------------------------
revenues from the rental of postage meters and the sale and financing of mailing
equipment, including software-based mail creation and mail finishing equipment,
production mail systems including customized software applications, software-
based shipping, transportation and logistics systems, and related supplies and
services. Products are sold, rented or financed by the company, while supplies
and services are sold. Some of the company's products are sold through dealers
outside the U.S.

Products include postage meters, mailing machines, address hygiene software,
manifest systems, letter and parcel scales, mail openers, mailroom furniture,
folders, and paper handling and shipping equipment.

Office Solutions. Office Solutions includes revenues from the sale, financing,
- ----------------
rental and service of reprographic and facsimile equipment including related
supplies, and facilities management services which provides mail processing,
reprographic business support and document resource planning functions. Products
are sold, rented or financed by the company, while supplies and services are
sold.

Facilities management services are provided by the company's Pitney Bowes
Management Services, Inc. subsidiary (P.B.M.S.). P.B.M.S. provides customers
with a variety of business support services to manage copy, reprographic and
mail centers, facsimile, electronic printing and imaging services, and records
management. P.B.M.S. is a major provider of on- and off-site services which help
customers manage the creation, processing, storage, retrieval, distribution and
tracking of documents and messages in both paper and digital form.

The financial services operations provide lease financing for the company's
products (for both the Mailing and Integrated Logistics and Office Solutions
segments) in the U.S., Canada, the United Kingdom, Germany, France, Norway,
Ireland, Australia, Austria, Spain, Switzerland and Sweden. Consolidated
financial services operations financed 36 percent of



consolidated sales in 1999, 38 percent in 1998, and 36 percent in 1997.
Consolidated financial services operations financed approximately 76 percent, 77
percent and 77 percent of leasable sales in 1999, 1998 and 1997, respectively.

2

Capital Services. Capital Services provides large-ticket financing and fee-
- ----------------
based programs covering a broad range of products and other financial services
to the commercial and industrial markets in North America.

Products financed include both commercial and non-commercial aircraft, over-the-
road trucks and trailers, locomotives, railcars, rail and bus facilities and
high-technology equipment such as data processing and communications equipment.
The finance operations have also participated, on a select basis, in certain
other types of financial transactions including: sales of lease transactions,
senior secured loans in connection with acquisitions, leveraged buyout and
recapitalization financings and certain project financings.

Discontinued Operations. On January 14, 2000, the company sold its mortgage
- ------------------------
servicing business, Atlantic Mortgage & Investment Corporation (AMIC), a wholly-
owned subsidiary of the company to ABN AMRO North America. The company received
approximately $484 million in cash at closing. Accordingly, operating results of
AMIC have been segregated and reported as discontinued operations in the
Consolidated Statements of Income. Prior year results have been reclassified to
conform to the current year presentation. In connection with the sale, the
company recorded a loss of approximately $27.6 million (net of taxes of $18.4
million) for the year ended December 31, 1999. The transaction is subject to
post-closing adjustments.

As part of the company's strategy to reduce the capital committed to asset-based
financing, while increasing fee-based income, in 1998 the company sold its
broker-oriented small-ticket leasing business to General Electric Capital
Corporation (GECC), a subsidiary of General Electric Company. As part of the
sale, the operations, employees and substantially all the assets of Colonial
Pacific Leasing Corporation (CPLC) were transferred to GECC. The company
received $790 million at closing, which approximates the book value of the net
assets sold or otherwise disposed of and related transaction costs. Accordingly,
operating results of CPLC have been segregated and reported as discontinued
operations in the Consolidated Statements of Income. Prior year results have
been reclassified to conform to the current year presentation. In connection
with this transaction, the company recorded a gain of approximately $3.7 million
(net of taxes of $2.0 million) for the year ended December 31, 1999. This gain
resulted from the settlement of post-closing adjustments in 1999 related to the
sale, offset by the cost of settlement with regard to a dispute with GECC over
certain assets that were included in the sale.

Support Services. The company maintains extensive field service organizations
- ----------------
in the U.S. and certain other countries to provide support services to customers
who have rented, leased or purchased equipment. Such support services, provided
primarily on the basis of annual maintenance contracts, accounted for
approximately 13 percent of revenue in 1999, 1998 and 1997.

Marketing. The company's products and services are marketed through an
- ---------
extensive network of offices in the U.S. and through a number of subsidiaries
and independent distributors and dealers in many countries throughout the world
as well as through direct marketing, outbound telemarketing, and the Internet.
The company sells to a variety of business, governmental, institutional and
other organizations. It has a broad base of customers, and is not dependent
upon any one customer or type of customer for a significant part of its
business. The company does not have significant backlog or seasonality relating
to its businesses.

Operations Outside the United States. The company's manufacturing operations
- ------------------------------------
outside the U.S. are in the United Kingdom.

Competition. The company has historically been a leading supplier of certain
- -----------
products and services in its business segments, particularly postage meters and
mailing machines.


However, all of its segments have strong competition from a number of companies.
In particular, the company is facing competition in many countries for new
placements from several postage meter and mailing machine suppliers, and its
mailing systems products face competition from products and services offered as
alternative means of message communications. P.B.M.S., a major provider of
business support services to the corporate, financial services, and professional
services markets, competes against national, regional and local firms
specializing in facilities management. The company believes that its long
experience and reputation for product quality, and its sales and support service
organizations are important factors in influencing customer choices with respect
to its products and services.

3

The financing business is highly competitive with aggressive rate competition.
Leasing companies, commercial finance companies, commercial banks and other
financial institutions compete, in varying degrees, in the several markets in
which the finance operations do business and range from very large, diversified
financial institutions to many small, specialized firms. In view of the market
fragmentation and absence of any dominant competitors which result from such
competition, it is not possible to provide a meaningful description of the
finance operations' competitive position in these markets.

Research and Development/Patents. The company has research and development
- --------------------------------
programs that are directed towards developing new products and service methods.
Expenditures on research and development totaled $108.9 million, $100.8 million,
and $89.5 million in 1999, 1998 and 1997, respectively.

As a result of its research and development efforts, the company has been
awarded a number of patents with respect to several of its existing and planned
products. However, the company believes its businesses are not materially
dependent on any one patent or any group of related patents. The company also
believes its businesses are not materially dependent on any one license or any
group of related licenses.

Material Supplies. The company believes it has adequate sources for most parts
- -----------------
and materials for the products it manufactures. However, products manufactured
by the company rely to an increasing extent on microelectronic components, and
temporary shortages of these components have occurred from time to time due to
the demands by many users of such components.

The company purchases copiers, facsimile equipment and scales primarily from
Japanese suppliers. The company believes that it has adequate sources available
to it for the foreseeable future for such products.

Environmental Regulation. The company is subject to federal, state and local
- ------------------------
laws and regulations relating to the environment and is currently named as a
member of various groups of potentially responsible parties in administrative or
court proceedings. As we previously announced, in 1996 the Environmental
Protection Agency (EPA) issued an administrative order directing the company to
be part of a soil cleanup program at the Sarney Farm site in Amenia, New York.
The site was operated as a landfill between the years 1968 and 1970 by parties
unrelated to the company, and wastes from a number of industrial sources were
disposed there. The company does not concede liability for the condition of the
site, but is working with the EPA to identify, and then seek reimbursement from,
other potentially responsible parties. Based on the facts presently known, we
estimate the total cost of our remediation effort to be approximately $5
million. This amount has been recorded as a liability in the Consolidated
Balance Sheet at December 31, 1999.

The administrative and court proceedings referred to above are in different
states. It is difficult to estimate with any certainty the total cost of
remediating, the timing or extent of remedial actions which may be required by
governmental authorities. However, the company believes that the outcome of any
current proceeding will not have a material adverse effect on its financial
condition or results of operations.

4

Regulatory Matters. In January 2000, the U.S. Postal Service (U.S.P.S.) issued a
- ------------------
proposed schedule for the phaseout of manually reset electronic meters in the
U.S. as follows:

. As of February 1, 2000, new placements of manually reset electronic meters
are no longer permitted. Current users of manually reset electronic
meters can continue to use these meters for the term of their current
rental and lease agreements.

Based on the proposed schedule, the company believes that the phaseout of
manually reset electronic meters will not cause a material adverse financial
impact on the company.

As a result of the company's aggressive efforts to meet the U.S.P.S mechanical
meter migration phaseout schedule combined with the company's ongoing and
continuing investment in advanced postage evidencing technologies, mechanical
meters represented less than 1% of the company's installed U.S. meter base at
December 31, 1999, compared with 10% at December 31, 1998. At December 31, 1999,
over 99% of the company's installed U.S. meter base was electronic or digital,
compared with 90% at December 31, 1998. The company continues to work in close
cooperation with the U.S.P.S. to convert those mechanical meter customers who
have not migrated to digital or electronic meters.

In May 1995, the U.S.P.S. publicly announced its concept of its Information
Based Indicia Program (IBIP) for future postage evidencing devices. As initially
stated by the U.S.P.S., the purpose of the program was to develop a new standard
for future digital postage evidencing devices which significantly enhanced
postal revenue security and supported expanded U.S.P.S. value-added services to
mailers. The program would consist of the development of four separate
specifications:

. the Indicium specification - the technical specifications for the indicium
to be printed

. a Postal Security Device specification - the technical specification for
the device that would contain the accounting and security features of the
system

. a Host specification

. a Vendor Infrastructure specification

During the period from May 1995 through December 31, 1999, the company has
submitted extensive comments to a series of proposed IBIP specifications issued
by the U.S.P.S. In July 1999, the U.S.P.S. issued the latest set of proposed
specifications, entitled "Performance Criteria for Information Based Indicia and
Security Architecture for Open IBI Postage Evidencing Systems" (the IBI
Performance Criteria). The company has submitted comments to the IBI Performance
Criteria.

As of December 31, 1999, the company was in the process of finalizing the
development of both PC and Internet versions of a product which satisfy the
proposed IBI Performance Criteria. In March 2000, the company received approval
from the U.S.P.S. for the commercial launch of the Internet version of this
product, ClickStampTM Online. The PC version of this product is currently in
the final phase of beta testing and is expected to be ready for market upon
final approval from the U.S.P.S.

In June 1999, the company was served with a Civil Investigative Demand (CID)
from the U.S. Justice Department's Antitrust Division. A CID is a tool used by
the Antitrust Division for gathering information and documents. The company
believes that the Justice Department may be reviewing the company's efforts to
protect its intellectual property rights. The company believes it has complied
fully with the antitrust laws and is cooperating fully with the department's
investigation.

Employee Relations. At December 31, 1999, 25,792 persons were employed by the
- ------------------
company in the U.S. and 4,836 outside the U.S. Employee relations are
considered to be satisfactory. The majority of employees are not represented by
any labor union. Management follows the



policy of keeping employees informed of its decisions, and encourages and
implements employee suggestions whenever practicable.

5

Item 2. Properties
----------

The company's World Headquarters and certain other office and manufacturing
facilities are located in Stamford, Connecticut. Additional office facilities
are located in Shelton, Connecticut. The company maintains research and
development operations at a corporate engineering and technology center in
Shelton, Connecticut. A sales and service training center is located near
Atlanta, Georgia. The company believes that its current manufacturing,
administrative and sales office properties are adequate for the needs of all of
its operations.

Mailing and Integrated Logistics. Mailing and Integrated Logistics products are
- --------------------------------
manufactured in a number of plants principally in Connecticut, as well as in
Harlow, England. Most of these facilities are owned by the company. At
December 31, 1999, there were 135 sales, support services, and finance offices,
substantially all of which are leased, located throughout the U.S. and in a
number of other countries.

Office Solutions. The company's copier and facsimile systems businesses are
- -----------------
both headquartered in Trumbull, Connecticut. The company's facilities management
services subsidiary is headquartered in Stamford, Connecticut and leases 31
facilities located throughout the U.S., and a facility in Toronto, Ontario,
Canada, and London, England.

Executive and administrative offices of the financing operations (for both the
Mailing and Integrated Logistics and Office Solutions segments) within the U.S.
are located in Shelton, Connecticut. Offices of the financing operations
outside the U.S. are maintained in Mississauga, Ontario, Canada; London,
England; Heppenheim, Germany; Paris, France; Oslo, Norway; Dublin, Ireland;
French's Forest, Australia; Vienna, Austria; Effretikon, Switzerland; and
Stockholm, Sweden.

Capital Services. Pitney Bowes Credit Corporation (PBCC) leases an executive
- ----------------
and administrative office in Shelton, Connecticut, which is owned by Pitney
Bowes Inc. There are eight leased regional and district sales offices located
throughout the U.S.

Item 3. Legal Proceedings
-----------------

In the course of normal business, the company is occasionally party to lawsuits.
These may involve litigation by or against the company relating to, among other
things:

. contractual rights under vendor, insurance or other contracts
. intellectual property or patent rights
. equipment, service or payment disputes with customers
. disputes with employees

The company is currently a plaintiff or a defendant in a number of lawsuits,
none of which should have, in the opinion of management and legal counsel, a
material adverse effect on the company's financial position or results of
operations.

Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------

None.

6

Executive Officers of the Registrant
- ------------------------------------

<TABLE>
<CAPTION>
Executive
Officer
Name Age Title Since
- ---- --- ----- -------
<S> <S> <C> <C>
Michael J. Critelli 51 Chairman and Chief 1988
Executive Officer

Marc C. Breslawsky 57 President and Chief 1985
Operating Officer

Gregory E. Buoncontri 52 Vice President and Chief Information 2000
Officer

Amy C. Corn 46 Corporate Secretary and Senior 1996
Associate General Counsel

Meredith B. Fischer 47 Vice President, Corporate Marketing 1996
and Chief Communications Officer

Karen M. Garrison 51 President, Pitney Bowes Business 1999
Services

Mary Jo Green 51 Vice President and Treasurer 1999

Suzanne N. Grey 49 Vice President, Strategy Planning 1999
and New Business Development

Arlen F. Henock 43 Vice President - Controller and 1996
Chief Tax Counsel

Luis A. Jimenez 55 Vice President, Global Growth and 1999
Futures Strategy

Matthew S. Kissner 45 President, Pitney Bowes Office 1997
Direct and Financial Solutions

Murray D. Martin 52 President, Pitney Bowes 1998
International

John N. D. Moody 55 President, U.S. Mailing Systems 1997

Sara E. Moss 53 Vice President and General Counsel 1996

Bruce P. Nolop 49 Vice President and Chief 2000
Financial Officer

Fred M. Purdue 53 Vice President and General Manager, 1999
Business Reengineering

Murray L. Reichenstein 62 Vice President, E-Business and Chief 1996
Development Officer

Douglas A. Riggs 55 Vice President and Chief Corporate 1988
(Retiring 3/31/00) Affairs Officer
</TABLE>


<TABLE>
<S> <C> <C> <C>

Dennis M. Roney 57 President, Pitney Bowes 1998
Office Systems

Kathleen E. Synnott 46 Vice President and General Manager, 1999
Customer Relationship Management

Johnna G. Torsone 49 Vice President and Chief 1993
Personnel Officer

Joseph E. Wall 48 Vice President and Chief Technology 1996
Officer
</TABLE>

7

There is no family relationship among the above officers, all of which have
served in various corporate, division or subsidiary positions with the company
for at least the past five years except G.E. Buoncontri, L.A. Jimenez, M.S.
Kissner, S.E. Moss, B.P. Nolop, M.L. Reichenstein and J.E. Wall.

Mr. Buoncontri was formerly the Vice President, Information Technology and Chief
Information Officer of Novartis Pharmaceuticals Corp. (merger of Sandoz and
Ciba Geigy). Prior to the merger, he also served as the Vice President,
Information Systems and Chief Information Officer for Sandoz Pharmaceuticals
Company. Mr. Buoncontri also served as Vice President, Information Management
Services and Chief Information Officer of Asea Brown Boveri, Inc.

Mr. Jimenez joined the company from Arthur D. Little, an international
management consulting company, with over 25 years of experience. Mr. Jimenez was
appointed worldwide practice leader for postal organizations in 1990, Corporate
Vice President in 1991, and served most recently on the firm's global board for
telecommunications and media and as Manager of the Latin American practice.

Mr. Kissner, who was President, Pitney Bowes Credit Corporation since 1995,
joined the company from Bankers Trust Company where he had been Managing
Director since 1993. Mr. Kissner was also President, Pitney Bowes Financial
Services since 1997 before assuming his duties as President, Pitney Bowes Office
Direct and Financial Solutions.

Ms. Moss joined the company from the New York law firm of Howard, Darby & Levin,
where she had been a Senior Partner since 1985. Before joining Howard, Darby &
Levin, Ms. Moss was an Assistant United States Attorney in the Southern District
of New York. Ms. Moss served as a law clerk for the Honorable Constance Baker
Motley, United States District Judge, Southern District of New York.

Mr. Nolop joined the company from Wasserstein Perella & Co., an investment bank
and one of Pitney Bowes' financial advisors, where he had served as managing
director since 1993. Prior to joining Wasserstein Perella & Co., Mr. Nolop held
senior positions with Goldman Sachs & Co., Kimberly-Clark Corporation and Morgan
Stanley & Co.

Mr. Reichenstein, who was previously Vice President and Chief Financial Officer
of Pitney Bowes Inc. since 1996, joined the company with over 31 years of
experience with Ford Motor Company. During his time with Ford, Mr. Reichenstein
held a variety of positions of increasing responsibility in the U.S. and Europe,
including Director of Manufacturing Services, Vice President, Car Product
Planning, and Chief Financial Officer, Ford Europe; Vice President & Controller
of Ford Automotive Operations Worldwide; and Vice President & Controller of Ford
Motor Company.

Dr. Wall was most recently Vice President - Technology of Emerson Electric,
which he joined in 1986 as Director of Research and Development for its since-
divested Rosemount Aerospace Division. Prior to joining Emerson, Dr. Wall held
positions of increasing responsibility at Honeywell, including Section Chief and
Senior Principal Research Engineer.

8

PART II
-------

Item 5. Market for the Registrant's Common Stock and Related Stockholders'
------------------------------------------------------------------
Matters
-------

The sections entitled "Stock Exchanges" and "Stock Information" on page 70 of
the Pitney Bowes Inc. 1999 Annual Report to Stockholders are incorporated herein
by reference. At December 31, 1999, the company had 32,754 common stockholders
of record.

Item 6. Selected Financial Data
-----------------------

The section entitled "Summary of Selected Financial Data" on page 47 of the
Pitney Bowes Inc. 1999 Annual Report to Stockholders is incorporated herein by
reference.

Item 7. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------

The section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 37 to 46 of the Pitney Bowes Inc.
1999 Annual Report to Stockholders is incorporated herein by reference, except
for the section on page 46 relating to "Dividend Policy".

The section under "Legal, Environmental and Regulatory Matters" titled
"Regulation" on page 45 of the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" incorporated herein by reference
as mentioned above should be read in conjunction with the discussion under
"Regulatory Matters" in Part I, Item 1 on page 5 of this Annual Report on Form
10-K.

The company wants to caution readers that any forward-looking statements (those
which talk about the company's or management's current expectations as to the
future) in this Form 10-K or made by company management involve risks and
uncertainties which may change based on various important factors. Words such as
"estimate", "project", "plan", "believe", "expect" and similar expressions may
identify such forward-looking statements. Some of the factors which could cause
future financial performance to differ materially from the expectations as
expressed in any forward-looking statement made by or on behalf of the company
include:

. changes in postal regulations
. timely development and acceptance of new products
. success in gaining product approval in new markets where regulatory
approval is required
. successful entry into new markets
. mailers' utilization of alternative means of communication or competitors'
products
. our success at managing customer credit risk
. changes in interest rates

Item 7A. Quantitative and Qualitative Disclosures about Market Risk
----------------------------------------------------------

The section entitled "Market Risk" on page 44 of the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" is incorporated
herein by reference.

Item 8. Financial Statements and Supplementary Data
-------------------------------------------

The financial statements, together with the report thereon of
PricewaterhouseCoopers LLP dated January 20, 2000, appearing on pages 48 to 69
of the Pitney Bowes Inc. 1999 Annual Report to Stockholders are incorporated
herein by reference.


Item 9. Changes in and Disagreements with Accountants on Accounting and
---------------------------------------------------------------
Financial Disclosure
--------------------

None.

9

PART III
--------

Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------

Except for information regarding the company's executive officers (see
"Executive Officers of the Registrant" on page 7 of this Form 10-K), the
information called for by this Item is incorporated herein by reference to the
sections entitled "Election of Directors", "How much stock is owned by
directors, nominees and executive officers?" and "Security Ownership" on pages 6
to 7 and 3 to 4 of the Pitney Bowes Inc. Notice of the 2000 Annual Meeting and
Proxy Statement.

Item 11. Executive Compensation
----------------------

The sections entitled "Directors' Compensation", "Executive Officer
Compensation", "Severance and Change of Control Arrangements" and "Pension
Benefits" on pages 9 to 14, and 16 to 18 of the Pitney Bowes Inc. Notice of the
2000 Annual Meeting and Proxy Statement are incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------

The section entitled "How much stock is owned by directors, nominees and
executive officers?" and "Security Ownership" on pages 3 to 4 of the Pitney
Bowes Inc. Notice of the 2000 Annual Meeting and Proxy Statement is incorporated
herein by reference.

Item 13. Certain Relationships and Related Transactions
----------------------------------------------

None.

10

PART IV
-------

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------

(a) 1. Financial statements - see Item 8 on page 9 and "Index to Financial
Schedules" on page 17.

2. Financial statement schedules - see "Index to Financial Schedules"
on page 17.

3. Exhibits (numbered in accordance with Item 601 of Regulation S-K).

<TABLE>
<CAPTION>
Reg. S-K Status or Incorporation
Exhibits Description by Reference
- -------- ------------------------------- -----------------------------------------------
<S> <C> <C>
(3)(a) Restated Certificate of Incorporated by reference to Exhibit (3a) to
Incorporation, as amended Form 10-K as filed with the Commission on March
30, 1993 (Commission file number 1-3579)

(a.1) Certificate of Amendment to the Incorporated by reference to Exhibit (a.1) to
Restated Certificate of Form 10-K as filed with the Commission on March
Incorporation (as amended May 27, 1998. (Commission file number 1-3579)
29, 1996)

(b) By-laws, as amended Incorporated by reference to Exhibit (3b) to
Form 10-K as filed with the Commission on April
1, 1996. (Commission file number 1-3579)

(c) By-laws, as amended Incorporated by reference to Exhibit (3)(ii) to
Form 10-Q as filed with the Commission on
November 16, 1998. (Commission file number
1-3579)

(4)(a) Form of Indenture dated as of Incorporated by reference to Exhibit (4a) to
November 15, 1987 between the Form 10-K as filed with the Commission on March
company and Chemical Bank, as 24, 1988. (Commission file number 1-3579)
Trustee

(b) Form of Debt Securities Incorporated by reference to Exhibit (4b) to
Form 10-K as filed with the Commission on March
24, 1988. (Commission file number 1-3579)

(c) Form of First Supplemental Incorporated by reference to Exhibit (1) to
Indenture dated as of June 1, Form 8-K as filed with the Commission on June
1989 between the company and 16, 1989. (Commission file number 1-3579)
Chemical Bank, as Trustee
</TABLE>



<TABLE>
<S> <C> <C>
(d) Form of Indenture dated as of Incorporated by reference to Exhibit (4.1) to
April 15, 1990 between the Registration Statement on Form S-3 (No.
company and Chemical Bank, as 33-33948) as filed with the Commission on March
successor to Manufacturers 28, 1990.
Hanover Trust Company, as
Trustee

(e) Forms of Debt Securities Incorporated by reference to Exhibit (4) to
Form 10-Q as filed with the Commission on May
14, 1990. (Commission file number 1-3579)
</TABLE>

11

<TABLE>
<S> <C> <C>
(f) Form of Indenture dated as of Incorporated by reference to Exhibit (4a) to
May 1, 1985 between Pitney Bowes Registration Statement on Form S-3 (No.
Credit Corporation and Bankers 2-97411) as filed with the Commission on May 1,
Trust Company, as Trustee 1985.

(g) Letter Agreement between Pitney Incorporated by reference to Exhibit (4b) to
Bowes Inc. and Bankers Trust Registration Statement on Form S-3 (No.
Company, as Trustee 2-97411) as filed with the Commission on May 1,
1985.

(h) Form of First Supplemental Incorporated by reference to Exhibit (4b) to
Indenture dated as of December Registration Statement on Form S-3 (No.
1, 1986 between Pitney Bowes 33-10766) as filed with the Commission on
Credit Corporation and Bankers December 12, 1986.
Trust Company, as Trustee

(i) Form of Second Supplemental Incorporated by reference to Exhibit (4c) to
Indenture dated as of February Registration Statement on Form S-3 (No.
15, 1989 between Pitney Bowes 33-27244) as filed with the Commission on
Credit Corporation and Bankers February 24, 1989.
Trust Company, as Trustee

(j) Form of Third Supplemental Incorporated by reference to Exhibit (1) to
Indenture dated as of May 1, Form 8-K as filed with the Commission on May
1989 between Pitney Bowes Credit 16, 1989. (Commission file number 1-3579)
Corporation and Bankers Trust
Company, as Trustee

(k) Indenture dated as of November Incorporated by reference to Exhibit (4a) to
1, 1995 between the company and Amendment No. 1 to Registration Statement on
Chemical Bank, as Trustee Form S-3 (No. 33-62485) as filed with the
Commission on November 2, 1995.

(l) Preference Share Purchase Rights Incorporated by reference to Exhibit (4) to
Agreement dated December 11, Form 8-K as filed with the Commission on March
1995 between the company and 13, 1996. (Commission file number 1-3579)
Chemical Mellon Shareholder
Services, LLC., as Rights
Agent, as amended

The company has outstanding certain other long-term indebtedness. Such long-term
indebtedness does not exceed 10% of the total assets of the company; therefore,
copies of instruments defining the rights of holders of such indebtedness are not
included as exhibits. The company agrees to furnish copies of such instruments to
the Securities and Exchange Commission upon request.
</TABLE>

12

Executive Compensation Plans:
- ----------------------------

(10)(a) Retirement Plan for Directors Incorporated by reference to
of Pitney Bowes Inc. Exhibit (10a) to Form 10-K
as filed with the Commission on
March 30, 1993. (Commission file
number 1-3579)

(b) Pitney Bowes Inc. Directors' Incorporated by reference to
Stock Plan (as amended and Exhibit (i) to Form 10-K as filed
restated 1997) with the Commission on March 31,
1997. (Commission file number 1-
3579)

(b.1) Pitney Bowes Inc. Directors' Exhibit (i)
Stock Plan (as amended and
restated 1999)

(c) Pitney Bowes 1991 Stock Plan Incorporated by reference to
Exhibit (10b) to Form 10-K as
filed with the Commission on March
25, 1992. (Commission file number
1-3579)

(c.1) First Amendment to Pitney Incorporated by reference to
Bowes 1991 Stock Plan Exhibit (ii) to Form 10-K as filed
with the Commission on March 31,
1997. (Commission file 1-3579)

(c.2) Second Amendment to Pitney Incorporated by reference to
Bowes 1991 Stock Plan Exhibit (i) to Form 10-Q as filed
with the Commission on November
13, 1997. (Commission file number
1-3579)

(c.3) Pitney Bowes 1991 Stock Plan Incorporated by reference to
(as amended and restated) Exhibit (10) to Form 10-Q as filed
with the Commission on May 14,
1998. (Commission file number 1-
3579)


(c.4) Pitney Bowes 1998 Stock Plan (as Exhibit (ii)
amended and restated )


(d) Pitney Bowes Inc. Key Employees' Incorporated by reference to
Incentive Plan (as amended and Exhibit (10c) to Form 10-K as
restated) filed with the Commission on March
25, 1992. (Commission file number
1-3579)

(d.1) First Amendment to Pitney Incorporated by reference to
Bowes Inc. Key Employees' Exhibit (iii) to Form 10-K as
Incentive Plan (as amended and filed with the Commission on March
restated June 10, 1991) 31, 1997. (Commission file number
1-3579)


(e) 1979 Pitney Bowes Stock Option Incorporated by reference to
Plan (as amended and restated) Exhibit (10d) to Form 10-K as
filed with the Commission on March
25, 1992. (Commission file number
1-3579)



(f) Pitney Bowes Severance Plan, as Incorporated by reference to Exhibit
amended, dated December 12, 1988 (10) to Form 10-K as filed with the
Commission on March 23, 1989.
(Commission file number 1-3579)

(g) Pitney Bowes Executive Severance Incorporated by reference to Exhibit
Policy, adopted December 11, 1995 (10h) to Form 10-K as filed with the
Commission on April 1, 1996.
(Commission file number 1-3579)

13

(h) Pitney Bowes Inc. Deferred Incorporated by reference to
Incentive Savings Plan Exhibit (i) to Form 10-Q as
for the Board of Directors filed with the Commission on
May 15, 1997. (Commission
file number 1-3579)

(h.1) Pitney Bowes Inc. Deferred Exhibit (iii)
Incentive Savings Plan for the
Board of Directors (as amended
and restated 1999)

(i) Pitney Bowes Inc. Deferred Incorporated by reference to
Incentive Savings Plan Exhibit (v) to Form 10-K as
filed with the Commission on
March 31, 1997. (Commission file
number 1-3579)

(j) Pitney Bowes U.K. Stock Option Exhibit (iv)
Plan (as amended and restated
1999)

(12) Computation of ratio of earnings Exhibit (v)
to fixed charges

(13) Portions of annual report to Exhibit (vi)
security holders

(21) Subsidiaries of the registrant Exhibit (vii)

(23) Consent of experts and counsel Exhibit (viii)

(27) Financial Data Schedule Exhibit (ix)

(b) On January 31, 2000, the company filed a current report on Form
8-K pursuant to Item 5 thereof, reporting the Press Release dated
January 27, 2000.

On December 10, 1999, the company filed a current report on Form 8-K
pursuant to Item 5 thereof, reporting the restated financial
statements (Form 10-K for the year ended December 31, 1998 and Form
10-Q for the quarter ended March 31, 1999 reflecting Atlantic
Mortgage & Investment Corporation (AMIC) as a discontinued
operation).

On November 24, 1999, the company filed a current report on Form 8-K
pursuant to Item 5 thereof, reporting the Press Release dated
November 19, 1999.

On October 22, 1999, the company filed a current report on Form 8-K
pursuant to Item 5 thereof, reporting the Press Release dated
October 19, 1999.



On November 22, 1999, PBCC filed a current report on Form 8-K
pursuant to Item 5 thereof, reporting a definitive agreement between
PBCC and ABN AMRO North America, a subsidiary of ABN AMRO Bank N.V.,
for the sale of AMIC dated November 19, 1999.

14

SIGNATURES
----------

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

Pitney Bowes Inc.



By /s/ Michael J. Critelli
-----------------------
(Michael J. Critelli)
Chairman and Chief
Executive Officer

Date March 30, 2000
---------------------

15

SIGNATURES
----------



Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


Signature Title Date
- --------- ----- ----

/s/ Michael J. Critelli Chairman and Chief March 30, 2000
- ------------------------- Executive Officer - Director --------------
Michael J. Critelli


/s/ Marc C. Breslawsky President and Chief March 30, 2000
- ------------------------- Operating Officer - Director --------------
Marc C. Breslawsky


/s/ Bruce P. Nolop Vice President and Chief March 30, 2000
- ------------------------- Financial Officer (principal --------------
Bruce P. Nolop financial officer)


/s/ Arlen F. Henock Vice President - Controller March 30, 2000
- ------------------------- and Chief Tax Counsel --------------
Arlen F. Henock (principal accounting
officer)


/s/ Linda G. Alvarado Director March 30, 2000
- ------------------------- --------------
Linda G. Alvarado


/s/ William E. Butler Director March 30, 2000
- ------------------------- --------------
William E. Butler


/s/ Colin G. Campbell Director March 30, 2000
- ------------------------- --------------
Colin G. Campbell


/s/ Jessica P. Einhorn Director March 30, 2000
- ------------------------- --------------
Jessica P. Einhorn


/s/ Ernie Green Director March 30, 2000
- ------------------------- --------------
Ernie Green


/s/ Herbert L. Henkel Director March 30, 2000
- ------------------------- --------------
Herbert L. Henkel


/s/ James H. Keyes Director March 30, 2000
- ------------------------- --------------
James H. Keyes


/s/ Michael I. Roth Director March 30, 2000
- ------------------------- --------------
Michael I. Roth


/s/ Phyllis S. Sewell Director March 30, 2000
- ------------------------- --------------
Phyllis S. Sewell

16

INDEX TO FINANCIAL SCHEDULES
----------------------------

The financial schedules should be read in conjunction with the financial
statements in the Pitney Bowes Inc. 1999 Annual Report to Stockholders.
Schedules not included herein have been omitted because they are not applicable
or the required information is shown in the financial statements or notes
thereto. Also, separate financial statements of less than 100 percent owned
companies, which are accounted for by the equity method, have been omitted
because they do not constitute significant subsidiaries.


Page
----
Pitney Bowes Inc.:

Report of independent accountants on financial
statement schedule 18

Financial statement schedule for the years 1997 - 1999:

Valuation and qualifying accounts and
reserves (Schedule II) 19

17

REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE


To the Board of Directors
of Pitney Bowes Inc.:

Our audits of the consolidated financial statements referred to in our report
dated January 20, 2000 appearing on page 69 of the Pitney Bowes Inc. 1999
Annual Report to Stockholders (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the financial statement schedule listed in Item
14(a)2 of this Form 10-K. In our opinion, this financial statement schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.



PricewaterhouseCoopers LLP

Stamford, Connecticut
January 20, 2000

18

PITNEY BOWES INC.

SCHEDULE II - VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES

FOR THE YEARS ENDED DECEMBER 31, 1997 TO 1999

(Dollars in thousands)

Additions
Balance at charged to Balance
Beginning of costs and at end
Description year expenses Deductions of year
- ----------- ------------ --------- ---------- -------

Allowance for doubtful accounts
- -------------------------------

1999 $24,665 $8,668 $4,617 (1) $28,716
1998 $21,129 $9,872 $6,336 (1) $24,665
1997 $16,160 $9,269 $4,300 (1) $21,129

Allowance for credit losses on finance receivables
- --------------------------------------------------

1999 $130,775 $67,257 $93,311 (1)(2) $104,721
1998 $132,308 $73,142 $74,675 (1)(2) $130,775
1997 $113,737 $85,628 $67,057 (1) $132,308

Valuation allowance for deferred tax asset (3)
- ------------------------------------------

1999 $39,872 $ 586 $5,015 $35,443
1998 $41,301 $2,189 $3,618 $39,872
1997 $46,601 $1,233 $6,533 $41,301

(1) Principally uncollectible accounts written off.
(2) Amounts include the write-off of finance receivables retained in connection
with the disposal of our small-ticket external leasing business against
previously estabished allowance for credit losses recorded at the time of
disposal of this business in 1998.
(3) Included in balance sheet as a liability.



19