-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wxf3voSor9SlUCNkuOXWT0nHClzQCTmqB4MLYu0XV55JJpPmpIG3L4weXfOYGS+U XzjFcyOyYjcyfH5rDAio8w== 0000078814-09-000009.txt : 20090407 0000078814-09-000009.hdr.sgml : 20090407 20090406174809 ACCESSION NUMBER: 0000078814-09-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20081231 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090407 DATE AS OF CHANGE: 20090406 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PITNEY BOWES INC /DE/ CENTRAL INDEX KEY: 0000078814 STANDARD INDUSTRIAL CLASSIFICATION: OFFICE MACHINES, NEC [3579] IRS NUMBER: 060495050 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03579 FILM NUMBER: 09735946 BUSINESS ADDRESS: STREET 1: PITNEY BOWES INC STREET 2: 1 ELMCROFT ROAD CITY: STAMFORD STATE: CT ZIP: 06926-0700 BUSINESS PHONE: 2033565000 MAIL ADDRESS: STREET 1: 1 ELMCROFT ROAD CITY: STAMFORD STATE: CT ZIP: 06926-0700 8-K 1 pbi-20081231_8k.htm 8-K DOCUMENT

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities

Exchange Act of 1934


April 6, 2009

Date of Report (Date of earliest event reported)

Pitney Bowes Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

1-3579

06-0495050

(State or other jurisdiction of

incorporation or organization)

(Commission file number)

(I.R.S. Employer

Identification No.)

 

World Headquarters

1 Elmcroft Road

Stamford, Connecticut 06926-0700

(Address of principal executive offices)

(203) 356-5000

(Registrants telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 

ITEM 8.01.      OTHER EVENTS


Attached as Exhibit 100 to this report are documents that contain information from Pitney Bowes Inc.'s Annual Filing on Form 10-K for the fiscal year ended December 31, 2008, filed with the Securities and Exchange Commission on February 26, 2009, formatted in eXtensible Business Reporting Language (XBRL).

Users of this data are advised pursuant to Rule 401 of Regulation S-T that the information contained in XBRL documents is unaudited and these are not the official publicly filed financial statements of Pitney Bowes Inc.  The purpose of submitting these XBRL-formatted documents is to test the related format and technology and, as a result, investors should continue to rely on the official version of the furnished documents and not rely on this information in making investment decisions.

In accordance with Rule 402 of Regulation S-T, the information in this Current Report on Form 8-K, including Exhibit 100, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document.


ITEM 9.01.     FINANCIAL STATEMENTS AND EXHIBITS

(d)      Exhibits

            Exhibit No.                Description

EX-100.INS               XBRL Report Instance Document

EX-100.SCH              XBRL Taxonomy Extension Schema Document

EX-100.PRE               XBRL Taxonomy Presentation Linkbase Document

EX-100.CAL              XBRL Taxonomy Calculation Linkbase Document

EX-100.LAB              XBRL Taxonomy Label Linkbase Document

EX-100.DEF              XBRL Taxonomy Definition Linkbase Document



Forward Looking Statements

This Current Report on Form 8-K and any exhibits to this Report may contain "forward-looking statements" about our expected future business and financial performance.  Pitney Bowes Inc. 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. 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: the uncertain economic environment, 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; changes in foreign currency e xchange rates; changes in tax rates; and negative income tax adjustments for prior audit years and changes in tax laws or regulations; as more fully outlined in the company's 2008 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission. 

 


SIGNATURES                  


Pursuant to the requirements 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.                 

 

April 6, 2009




                   /s/ S.J. Green                                         

S.J. Green                            

Vice President Finance and    

Chief Accounting Officer       

(Principal Accounting Officer)





EXHIBIT INDEX              



Exhibit No.                  Description

EX-100.INS               XBRL Report Instance Document

EX-100.SCH              XBRL Taxonomy Extension Schema Document

EX-100.PRE               XBRL Taxonomy Presentation Linkbase Document

EX-100.CAL              XBRL Taxonomy Calculation Linkbase Document

EX-100.LAB              XBRL Taxonomy Label Linkbase Document

EX-100.DEF              XBRL Taxonomy Definition Linkbase Document

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Description of Business and Summary of Significant Accounting Policies<BR><BR>Description of Business<BR>We are a provider of global, integrated mail and document management solutions for organizations of all sizes. We operate in two business groups: Mailstream Solutions and Mailstream Services. We operate both inside and outside the United States. See Note 18 to the Consolidated Financial Statements for financial information concerning revenue, earnings before interest and taxes (EBIT) and identifiable assets, by reportable segment and geographic area.<BR><BR>Basis of Presentation and Consolidation<BR>We have prepared the Consolidated Financial Statements of t he Company in conformity with accounting principles generally accepted in the United States of America (GAAP). Operating results of acquired companies are included in the Consolidated Financial Statements from the date of acquisition. Intercompany transactions and balances have been eliminated in consolidation.<BR><BR>Use of Estimates<BR>The preparation of the Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses that are reported in the Consolidated Financial Statements and accompanying disclosures, including the disclosure of contingent assets and liabilities. These estimates are based on our best knowledge of current events, historical experience, actions that we may undertake in the future, and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results could differ from those estimates and assumptions.<BR ><BR>Reclassification<BR>Certain prior year amounts in the Consolidated Financial Statements have been reclassified to conform to the current year presentation. <BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Cash Equivalents and Short-Term Investments<BR>Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the date of acquisition. We place our temporary cash and highly liquid short-term investments with a maturity of greater than three months but less than one year from the reporting date with financial institutions or investment managers and/or invest in highly rated short-term obligations.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Accounts Receivable and Allowance for Doubtful Accounts <BR>We estimate our accounts receivable risks and provide allowances for doubtful accounts accordingly. We believe that our credit risk for accounts receivable is limited because of our large number of customers and the relatively small account balances for most of our customers. Also, our customers are dispersed across different business and geographic areas. We evaluate the adequacy of the allowance for doubtful accounts on a periodic basis. The evaluation includes historical loss experience, length of time receivables are past due, adverse situations that may affect a customer&#8217;s ability to repay and prevailing economic conditions. We make adjustments to our allowance if the eva luation of allowance requirements differs from the actual aggregate reserve. This evaluation is inherently subjective and estimates may be revised as more information becomes available.<BR><BR>Finance Receivables and Allowance for Credit Losses<BR>We estimate our finance receivables risks and provide allowances for credit losses accordingly. Our financial services businesses establish credit approval limits based on the credit quality of the customer and the type of equipment financed. We charge finance receivables through the allowance for credit losses after collection efforts are exhausted and we deem the account uncollectible. Our financial services businesses base credit decisions primarily on a customer&#8217;s financial strength and we may also consider collateral values. We believe that our concentration of credit risk for finance receivables in our internal financing division is limited because of our large number of customers, small account balances and customer geographi c and industry diversification.<BR><BR>Our general policy for finance receivables contractually past due for over 120 days is to discontinue revenue recognition. We resume revenue recognition when payments reduce the account to 60 days or less past due. <BR><BR>We evaluate the adequacy of allowance for credit losses on a periodic basis. Our evaluation includes historical loss experience, the nature and volume of its portfolios, adverse situations that may affect a customer&#8217;s ability to repay, and prevailing economic conditions. We make adjustments to our allowance for credit losses if the evaluation of reserve requirements differs from the actual aggregate reserve. This evaluation is inherently subjective and estimates may be revised as more information becomes available.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Inventories<BR>Inventories are stated at the lower of cost or market. Cost is determined on the last-in, first-out (LIFO) basis for most U.S. inventories, and on the first-in, first-out (FIFO) basis for most non-U.S. inventories.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Other Current Assets and Prepayments<BR>Other current assets and prepayments include postage meter receivables billed in advance of $60.0 million and $57.0 million, respectively, at December 31, 2008 and 2007.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Fixed Assets and Depreciation<BR>Property, plant and equipment and rental equipment are stated at cost and depreciated principally using the straight-line method over their estimated useful lives. The estimated useful lives of depreciable fixed assets are as follows: buildings, up to 50 years; plant and equipment, 3 to 15 years; and computer equipment, 3 to 5 years. Major improvements which add to productive capacity or extend the life of an asset are capitalized while repairs and maintenance are charged to expense as incurred. Leasehold improvements are amortized over the shorter of the estimated useful life or their related lease term. <BR><BR>Fully depreciated assets are retained in fixed assets and accumulated depreci ation until they are removed from service. In the case of disposals, assets and related accumulated depreciation are removed from the accounts, and the net amounts, less proceeds from disposal, are included in income.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Capitalized Software Development Costs<BR>We capitalize certain costs of software developed for internal use in accordance with Statement of Position No. 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. Capitalized costs include purchased materials and services, payroll and payroll-related costs and interest costs. The cost of internally developed software is amortized on a straight-line basis over its estimated useful life, principally 3 to 10 years.<BR><BR>We capitalize software development costs related to software to be sold, leased, or otherwise marketed in accordance with Statement of Financial Accounting Standards (SFAS) No. 86, Accounting for the Costs of Comp uter Software to Be Sold, Leased, or Otherwise Marketed. Software development costs are expensed as incurred until technological feasibility has been established, at which time such costs are capitalized until the product is available for general release to the public. Capitalized software development costs include purchased materials and services, payroll and payroll-related costs attributable to programmers, software engineers, quality control and field certifiers, and interest costs. Capitalized software development costs are amortized over the estimated product useful life, principally 3 to 5 years, using the greater of the straight-line method or the ratio of current product revenues to total projected future revenues. Other assets on our Consolidated Balance Sheets include $19.6 million and $21.6 million of capitalized software development costs at December 31, 2008 and 2007, respectively. The Consolidated Statements of Income include the related amortization expense of $6.1 million, $3.9 million, and $1.6 million for the years ended December 31, 2008, 2007, and 2006, respectively. Total software development costs capitalized in 2008 and 2007 were $7.1 million and $10.1 million, respectively.<BR><BR>Research and Development Costs<BR>Research and product development costs not subject to SFAS No. 86 are expensed as incurred. These costs primarily include personnel related costs. <BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Business Combinations<BR>We account for business combinations using the purchase method of accounting which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. Goodwill represents the excess of the purchase price over the estimated fair values of net tangible and intangible assets acquired in business combinations. Goodwill is tested for impairment on an annual basis or as circumstances warrant. We estimate the fair value of intangible assets primarily using a cost, market and income approach. Intangible assets with finite lives acquired under business combinations are amortized over their estimated useful lives, principally 3 to 15 years. Customer relationshi p intangibles are generally amortized using an accelerated attrition method. All other intangibles are amortized on a straight-line method. See Note 6 to the Consolidated Financial Statements.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Impairment Review for Long-Lived Assets<BR>Long-lived assets are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. If such a change in circumstances occurs, the related estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are compared to the carrying amount. If the sum of the expected cash flows is less than the carrying amount, we record an impairment charge. The impairment charge is measured as the amount by which the carrying amount exceeds the fair value of the asset. The fair values of impaired long-lived assets are determined using probability weighted expected cash flow estimates, quoted market prices when available and appraisals as appropriate in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. See Note 14 to the Consolidated Financial Statements for further details. <BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Retirement Plans<BR>In accordance with SFAS No. 87, Employers&#8217; Accounting for Pensions, and SFAS No. 106, Employers&#8217; Accounting for Postretirement Benefits Other Than Pensions, actual results that differ from our assumptions and estimates are accumulated and amortized over the estimated future working life of the plan participants and will therefore affect pension expense recognized in future periods. Net pension expense is based primarily on current service costs, interest costs and the returns on plan assets. In accordance with this approach, differences between the actual and expected return on plan assets are recognized over a five-year period. In accordance with SFAS No. 158, Employers&#8217; Accounting fo r Defined Pension and Other Post Retirement Plans an amendment to FASB Statements No. 87, 88, 106 and 132(R), we recognize the overfunded or underfunded status of pension and other postretirement benefit plans on the balance sheet. Under SFAS No. 158, gains and losses, prior service costs and credits, and any remaining transition amounts under SFAS No. 87 and SFAS No. 106 that have not yet been recognized in net periodic benefit costs are recognized in accumulated other comprehensive income, net of tax, until they are amortized as a component of net periodic benefit cost. We use a measurement date of December 31 for all of our retirement plans. See Note 13 to the Consolidated Financial Statements for further details.<BR><BR>Stock-based Compensation<BR>Effective January 1, 2006, we adopted the provisions of SFAS No. 123(R), Share-Based Payment (&#8220;SFAS 123(R)&#8221;) which established accounting for stock-based awards exchanged for employee service. We measure stock-based com pensation cost at grant date, based on the estimated fair value of the award, and recognize the cost as expense on a straight-line basis (net of estimated forfeitures) over the employee requisite service period. We estimate the fair value of stock options using a Black-Scholes valuation model. The expense is recorded in costs; selling, general and administrative expense; and research and development expense in the Consolidated Statements of Income based on the employees&#8217; respective functions. <BR><BR>We record deferred tax assets for awards that will result in deductions on our income tax returns, based on the amount of compensation cost recognized and our statutory tax rate in the jurisdiction in which we will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported in our income tax return are recorded in expense or in capital in excess of par value (if the tax deduction exceeds the deferred t ax asset or to the extent that previously recognized credits to paid-in-capital are still available if the tax deduction is less than the deferred tax asset).<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Revenue Recognition<BR>We derive our revenue from the following sources:<BR><BR><ul><li>equipment sales;<BR></li><li>supplies;<BR></li><li>software;<BR></li><li>rentals;<BR></li><li>financing; <BR></li><li>support services; and<BR></li><li>business services.<BR></li></ul><BR>In accordance with GAAP, the Company recognizes revenue from these sources as follows:<BR><BR>Sales Revenue<BR><BR>Sales of Equipment<BR><BR>We sell equipment to our customers, as well as to distributors and dealers (re-sellers) throughout the world. We recognize revenue from these s ales upon the transfer of title, which is generally at the point of shipment. We do not offer any rights of return or stock balancing rights.<BR><BR>Our sales revenue from customized equipment, mail creation equipment and shipping products is generally recognized when installed. <BR><BR>Embedded Software Sales<BR><BR>We sell equipment with embedded software to our customers. The embedded software is not sold separately, it is not a significant focus of the marketing effort and we do not provide post-contract customer support specific to the software or incur significant costs that are within the scope of SFAS No. 86. Additionally, the functionality that the software provides is marketed as part of the overall product. The software embedded in the equipment is incidental to the equipment as a whole such that SOP No. 97-2, Software Revenue Recognition, is not applicable. Sales of these products are recognized in accordance with either SEC Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition, or SFAS No. 13, Accounting for Leases, for sales-type leases.<BR><BR>Sales of Supplies<BR><BR>Revenue related to supplies is recognized at the point of title transfer, which is upon shipment.<BR><BR>Standalone Software Sales and Integration Services<BR><BR>In accordance with SOP No. 97-2, we recognize revenue from standalone software licenses upon delivery of the product when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed and determinable and collectibility is probable. For software licenses that are included in a lease contract, we recognize revenue upon shipment of the software unless the lease contract specifies that the license expires at the end of the lease or the price of the software is deemed not fixed or determinable based on historical evidence of similar software leases. In these instances, revenue is recognized on a straight-line basis over the term of the lease contract. We r ecognize revenue from software requiring integration services at the point of customer acceptance. We recognize revenue related to off-the-shelf perpetual software licenses upon transfer of title, which is upon shipment.<BR><BR>Rentals Revenue <BR>We rent equipment to our customers, primarily postage meters and mailing equipment, under short-term rental agreements, generally for periods of 3 months to 5 years. Rental revenue includes revenue from the subscription for digital meter services. We invoice in advance for postage meter rentals. We defer the billed revenue and include it initially in advance billings. Rental revenue is recognized on a straight-line basis over the term of the rental agreement. We defer certain initial direct costs incurred in consummating a transaction and amortize these costs over the term of the agreement. The initial direct costs are primarily personnel related costs. Other assets on our Consolidated Balance Sheets include $47.2 million and $57.1 million of these deferred costs at December 31, 2008 and 2007, respectively. The Consolidated Statements of Income include the related amortization expense of $24.9 million, $23.7 million and $22.3 million for the years ended December 31, 2008, 2007 and 2006, respectively. <BR><BR>Financing Revenue<BR>We provide lease financing of our products primarily through sales-type leases. When a sales-type lease is consummated, we record the gross finance receivable, unearned income and the estimated residual value of the leased equipment. Residual values are estimated based upon the average expected proceeds to be received at the end of the lease term. We evaluate recorded residual values at least on an annual basis or as circumstances warrant. A reduction in estimated residual values could require an impairment charge as well as a reduction in future financing income.<BR><BR>Unearned income represents the excess of the gross finance receivable plus the estimated residual value over the sa les price of the equipment. We recognize the equipment sale at the inception of the lease. We recognize unearned income as financing revenue using the interest method over the lease term. <BR><BR>We provide financing to our customers for the purchase of postage and related supplies. Financing revenue includes interest which is earned over the term of the loan and related fees which are recognized as services are provided.<BR><BR>Support Services Revenue<BR>We provide support services for our equipment primarily through maintenance contracts. Revenue related to these agreements is recognized on a straight-line basis over the term of the agreement, which typically is 1 to 5 years in length.<BR><BR>Business Services Revenue<BR>Business services revenue includes revenue from management services, mail services, and marketing services. Management services, which includes outsourcing of mailrooms, copy centers, or other document management functions, are typicall y 1 to 5 year contracts that contain a monthly service fee and in many cases a &#8220;click&#8221; charge based on the number of copies made, machines in use, etc. Revenue is recognized over the term of the agreement, based on monthly service charges, with the exception of the &#8220;click&#8221; charges, which are recognized as earned. Mail services include the preparation, sortation and aggregation of mail to earn postal discounts and expedite delivery and revenue is recognized as the services are provided. Marketing services include direct mail marketing services, and revenue is recognized over the term of the agreement as the services are provided.<BR><BR>Multiple Element Arrangements<BR>Certain of our transactions are consummated at the same time. The most common form of these transactions involves the sale or lease of equipment, a meter rental and/or an equipment maintenance agreement. In these cases, revenue is recognized for each of the elements based on their r elative fair values in accordance with SFAS No. 13, Emerging Issues Task Force (EITF) No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables, and SAB No. 104. Fair values of any meter rental or equipment maintenance agreement are determined by reference to the prices charged in standalone and renewal transactions. Fair value of equipment is determined based upon the present value of the minimum lease payments.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Deferred Marketing Costs<BR>We capitalize certain direct mail, telemarketing, Internet, and retail marketing costs, associated with the acquisition of new customers in accordance with SOP No. 93-7, Reporting on Advertising Costs. These costs are amortized over the expected revenue stream ranging from 5 to 9 years. We review individual marketing programs for impairment on a periodic basis or as circumstances warrant.<BR><BR>Other assets on our Consolidated Balance Sheets at December 31, 2008 and 2007 include $130.8 million and $135.7 million, respectively, of deferred marketing costs. The Consolidated Statements of Income include the related amortization expense of $43.1 million, $43.7 million and $49.6 million for the years ended D ecember 31, 2008, 2007 and 2006, respectively.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Restructuring Charges<BR>We apply the provisions of SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, to account for one-time benefit arrangements and exit or disposal activities. SFAS No. 146 requires that a liability for costs associated with an exit or disposal activity be recognized when the liability is incurred. We account for ongoing benefit arrangements under SFAS No. 112, Employers&#8217; Accounting for Postemployment Benefits, which requires that a liability be recognized when the costs are probable and reasonably estimable. See Note 14 to the Consolidated Financial Statements.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Income Taxes<BR>We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in this assessment. Deferred tax assets and liabilities are measured using the e nacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of such change. <BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Earnings per Share<BR>Basic earnings per share is based on the weighted average number of common shares outstanding during the year, whereas diluted earnings per share also gives effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares include preference stock, preferred stock, stock option and purchase plan shares.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Translation of Non-U.S. Currency Amounts<BR>Assets and liabilities of subsidiaries operating outside the U.S. are translated at rates in effect at the end of the period and revenue and expenses are translated at average monthly rates during the period. Net deferred translation gains and losses are included in accumulated other comprehensive income in stockholders&#8217; (deficit) equity in the Consolidated Balance Sheets.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Derivative Instruments <BR>In the normal course of business, the company is exposed to the impact of interest rate changes and foreign currency fluctuations. The company limits these risks by following established risk management policies and procedures, including the use of derivatives. The derivatives are used to manage the related cost of debt and to limit the effects of foreign exchange rate fluctuations on financial results.<BR><BR>In our hedging program, we normally use forward contracts, interest-rate swaps, and currency swaps depending upon the underlying exposure. We do not use derivatives for trading or speculative purposes. Changes in the fair value of the derivatives are reflected as gains or losses. The accounting for th e gains or losses depends on the intended use of the derivative, the resulting designation, and the effectiveness of the instrument in offsetting the risk exposure it is designed to hedge. <BR><BR>To qualify as a hedge, a derivative must be highly effective in offsetting the risk designated for hedging purposes. The hedge relationship must be formally documented at inception, detailing the particular risk management objective and strategy for the hedge. The effectiveness of the hedge relationship is evaluated on a retrospective and prospective basis. <BR><BR>As a result of the use of derivative instruments, we are exposed to counterparty risk. To mitigate such risks, we enter into contracts with only those financial institutions that meet stringent credit requirements as set forth in our derivative policy. We regularly review our credit exposure balances as well as the creditworthiness of our counterparties. See Note 19 to the Consolidated Financial Statements for additional d isclosures on derivative instruments.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>New Accounting Pronouncements<BR>In June 2006, the Financial Accounting Standards Board (&#8220;FASB&#8221;) issued FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes (&#8220;FIN 48&#8221;), which supplements Statement of Financial Accounting Standard No. 109, Accounting for Income Taxes, by defining the confidence level that a tax position must meet in order to be recognized in the financial statements. FIN 48 requires the tax effect of a position to be recognized only if it is &#8220;more-likely-than-not&#8221; to be sustained based solely on its technical merits as of the reporting date. If a tax position is not considered more-likely-than-not to be sustained based solely on its technical merits, no benefits of the position are recognized. This is a different standard for recognition than was previously required. The more-likely-than-not threshold must continue to be met in each reporting period to support continued recognition of a benefit. At adoption, companies adjusted their financial statements to reflect only those tax positions that were more-likely-than-not to be sustained as of the adoption date. Any necessary adjustment was recorded directly to opening retained earnings in the period of adoption and reported as a change in accounting principle. We adopted the provisions of FIN 48 on January 1, 2007 which resulted in a decrease to opening retained earnings of $84.4 million, with a corresponding increase in our tax liabilities.<BR><BR>In September 2006, the FASB issued Statement of Financial Accounting Standards (&#8220;SFAS&#8221;) No. 157, Fair Value Measurements (&#8220;SFAS 157&#8221;), to define how the fair v alue of assets and liabilities should be measured in accounting standards where it is allowed or required. In addition to defining fair value, the Statement established a framework within GAAP for measuring fair value and expanded required disclosures surrounding fair value measurements. In February 2008, the FASB issued FASB Staff Position (FSP) FAS 157-2, Effective Date of FASB Statement No. 157, which delayed the effective date by one year for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. In October 2008, the FASB issued FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active. This FSP is effective immediately and includes those periods for which financial statements have not been issued. We adopted this Statement for financial assets and financial liabilities on January 1, 2008, and the adoption did not have a material impact on our financial position, results of operations, or cash flows. We do not expect the adoption of this Statement for nonfinancial items effective January 1, 2009 to have a material impact on our financial position, results of operations, or cash flows. We currently do not have any financial assets that are valued using inactive markets, and as such are not impacted by the issuance of FSP 157-3. See Note 19 to the Consolidated Financial Statements for additional discussion on fair value measurements.<BR><BR>In September 2006, the FASB issued SFAS No. 158, Employers&#8217; Accounting for Defined Benefit Pension and Other Postretirement Plans an amendment of FASB Statements No. 87, 88, 106 and 132(R) (&#8220;SFAS 158&#8221;), which required recognition of the overfunded or underfunded status of pension and other postretirement benefit plans on the balance sheet. Under SFAS 158, gains and losses, prior service costs and credits, and any remaining transition amounts under SFAS No. 87 and SFA S No. 106 that have not yet been recognized through net periodic benefit cost were recognized in accumulated other comprehensive income, net of tax effects, until they are amortized as a component of net periodic cost. Our adoption of the provisions of SFAS 158 reduced stockholders&#8217; equity by $297 million at December 31, 2006. SFAS 158 did not affect our results of operations or cash flows.<BR><BR>In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (&#8220;SFAS 141(R)&#8221;). SFAS 141(R) establishes principles and requirements for how a company (a) recognizes and measures in their financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest (previously referred to as minority interest); (b) recognizes and measures the goodwill acquired in a business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the na ture and financial effects of a business combination. SFAS 141(R) requires fair value measurements at the date of acquisition, with limited exceptions specified in the Statement. Some of the major impacts of this new standard include expense recognition for transaction costs and restructuring costs. SFAS 141(R) is effective for fiscal years beginning on or after December 15, 2008 and will be applied prospectively. We do not expect the adoption of this Statement to have a material impact on our financial position, results of operations, or cash flows.<BR><BR>In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (&#8220;SFAS 160&#8221;). SFAS 160 addresses the accounting and reporting for the outstanding noncontrolling interest (previously referred to as minority interest) in a subsidiary and for the deconsolidation of a subsidiary. It also establishes additional disclosures in the consolidated financi al statements that identify and distinguish between the interests of the parent&#8217;s owners and of the noncontrolling owners of a subsidiary. SFAS 160 requires changes in ownership interest that do not result in deconsolidation to be accounted for as equity transactions. This Statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. This gain or loss is measured using the fair value of the noncontrolling equity investment. This Statement is effective for fiscal years beginning on or after December 15, 2008. SFAS 160 requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of SFAS 160 are applied prospectively. We do not expect the adoption of this Statement to have a material impact on our financial position, results of operations, or cash flows. <BR><BR>In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activi ties (&#8220;SFAS 161&#8221;). SFAS 161 requires enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity&#8217;s financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The adoption of this Statement will require us to present currently disclosed information in a tabular format and will also expand our disclosures concerning where derivatives are reported on the balance sheet and where gains/losses are recognized in the results of operations. The Company will c omply with the disclosure requirements of this Statement beginning in the first quarter of 2009. <BR><BR>In April 2008, the FASB issued FASB FSP No. 142-3, Determination of the Useful Life of Intangible Assets (&#8220;FSP FAS 142-3&#8221;). FSP FAS 142-3 removed the requirement of SFAS No. 142, Goodwill and Other Intangible Assets (&#8220;SFAS 142&#8221;), for an entity to consider, when determining the useful life of an acquired intangible asset, whether the intangible asset can be renewed without substantial cost or material modification to the existing terms and conditions associated with the intangible asset. FSP FAS 142-3 replaces the previous useful life assessment criteria with a requirement that an entity considers its own experience in renewing similar arrangements. If the entity has no relevant experience, it would consider market participant assumptions regarding renewal. This should lead to greater consistency between the useful life of recognized intangibles unde r SFAS 142 and the period of expected cash flows used to measure fair value of such assets under SFAS No. 141(R), Business Combinations. FSP FAS 142-3 will be applied prospectively beginning January 1, 2009. We do not expect the adoption of this Statement to have a material impact on our financial position, results of operations, or cash flows. <BR><BR>In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (&#8220;SFAS 162&#8221;). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with U.S. GAAP. SFAS 162 is effective for fiscal years beginning after November 15, 2008. The adoption of this Statement did not result in a change in current practice. <BR><BR>In September 2008, the FASB issued FSP FAS 133-1 and FASB Interpretation (FIN) No. 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161. The FSP amends SFAS No. 133 to require a seller of credit derivatives, including credit derivatives embedded in a hybrid instrument, to provide certain disclosures for each statement of financial position presented. These disclosures are required even if the likelihood of having to make payments is remote. To make the disclosures consistent with the disclosures that will now be required for credit derivatives, FIN No. 45-4 was issued to require guarantors to disclose the current status of the payment/performance risk of the guarantee. This FSP also clarifies that SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The FSP is effective for reporting periods ending after November 15, 2008. The Company does not sell credit derivatives. The Company has c omplied with the additional disclosure requirement for guarantees in the fourth quarter of 2008.<BR><BR>In December 2008, the FASB issued FSP FAS 132(R)-1, Employers&#8217; Disclosures about Postretirement Benefit Plan Assets, which amends Statement No. 132(R) to require more detailed disclosures about employer&#8217;s plan assets, including investment strategies, major categories of assets, concentrations of risk within plan assets and valuation techniques used to measure the fair value of assets. The FSP is effective for fiscal years ending after December 15, 2009. The Company will comply with the additional disclosure requirements.</font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>2. Discontinued Operations<BR><BR>On May 1, 2006, we completed the sale of our Imagistics lease portfolio to De Lage Landen Operational Services, LLC, a subsidiary of Rabobank Group, for approximately $288 million. Net proceeds on the sale were approximately $282 million after transaction expenses. We reported the results of the Imagistics lease portfolio in discontinued operations including an after-tax gain of approximately $11 million from the sale of this portfolio.<BR><BR>On July 14, 2006, we completed the sale of our Capital Services external financing business to Cerberus Capital Management, L.P. (Cerberus) for approximately $747 million and the assumption of approximately $470 million of non-recourse debt and other liabilities. This sale resulted in the disposition of most of the external financing activity in the Capital Services segment. The proceeds received at closing were used to pay our tax obligations. We reported the results of the Capital Services business in discontinued operations, including an after-tax loss of $445 million from the sale of this business. We retained certain leveraged leases in Canada which are included in our International Mailing segment. <BR><BR>In August 2006, we reached a settlement with the Internal Revenue Service (IRS) on all outstanding tax audit issues in dispute for tax years through 2000. Years after 2000 are still under review by the IRS. In connection with the settlement, we recorded $61 million of additional tax expense of which $41 million was included in discontinued operations. See Note 9 for further discussion of the IRS settlement.<BR><BR>In 2006, we accrued in discontinued operations an additional tax expen se of $16 million to record the impact of the Tax Increase Prevention and Reconciliation Act (TIPRA). The TIPRA legislation repealed the exclusion from federal income taxation of a portion of the income generated from certain leveraged leases of aircraft by foreign sales corporations (FSC).<BR><BR>In December 2006, we sold our bankruptcy claim related to certain aircraft leases with Delta Airlines. We received proceeds of $14.5 million, which represent a contingent gain pending the bankruptcy court decision. 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align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=82 height=17 align=right><font size=2> 29,465&#160;</font></td></tr><tr><td width=337 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2>< ;B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2>&#160;</font></td></tr><tr><td width=337 height=17 align=left><font size=2>&#160;&#160;(Loss) income </font></td><td width=12 height=17 align=left><font size=2><B>$</B></font></td><td width=82 height=17 align=right><font 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size=2>&#160;</font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2> 864,848&#160;</font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2> 375,543&#160;</font></td><td width=12 height=18 align=left>< font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2> 45,035&#160;</font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 2px solid 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size=2> 79,023&#160;</font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2> 9,100&#160;</font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2> 1,014,432&#160;</font>&l t;/td></tr><tr><td width=306 height=18 align=left><font size=2>Total </font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=82 height=18 align=right style="border-top: 2px 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size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>Reserve account deposits </font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2><B> 555,557&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2> 522,198&#160;</font></td><td width=12 height=17 align=right><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2>& amp;#160;</font></td><td width=12 height=17 align=right><font size=2>&#160;</font></td><td width=82 height=17 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>Accrued salaries, wages and commissions </font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2><B> 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size=2>&#160;</font></td><td width=82 height=17 align=righ t><font size=2>&#160;</font></td><td width=12 height=17 align=right><font size=2>&#160;</font></td><td width=82 height=17 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=18 align=left><font size=2>Miscellaneous accounts payable and accrued liabilities </font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> 628,351&#160;</B></font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #00 0000;"><font size=2> 691,033&#160;</font></td><td width=12 height=18 align=right><font size=2>&#160;</font></td><td width=82 height=18 align=right><font size=2>&#160;</font></td><td width=12 height=18 align=right><font size=2>&#160;</font></td><td width=82 height=18 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=18 align=left><font size=2>Accounts payable and accrued liabilities </font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 1,922,399&#160;</B></font></td><td width=12 height=18 align=left><font size=2> &#160;</font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 1,965,567&#160;</font></td><td width=12 height=18 align=right><font size=2>&#160;</font></td><td width=82 height=18 align=right><font size=2>&#160;</font></td><td width=12 height=18 align=right><font size=2>&#160;</font></td><td width=82 height=18 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width= 82 height=18 align=right style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=82 height=18 align=right style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=12 height=18 align=right><font size=2>&#160;</font></td><td width=82 height=18 align=right><font size=2>&#160;</font></td><td width=12 height=18 align=right><font size=2>&#160;</font></td><td width=82 height=18 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>Notes payable </font></td><td width=12 height=17 ali gn=left><font size=2><B>$</B></font></td><td width=82 height=17 align=right><font size=2><B> 610,460&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=82 height=17 align=right><font size=2> 405,213&#160;</font></td><td width=12 height=17 align=right><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2>&#160;</font></td><td width=12 height=17 align=right><font size=2>&#160;</font></td><td width=82 height=17 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=18 align=left><font size=2>Current portion of long-term debt and capital leases </font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> 160,041&#160;</B></font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2> 548,554&#160;</font></td><td width=12 height=18 align=right><font size=2>&#160;</font></td><td width=82 height=18 align=right><font size=2>&#160;</font></td><td width=12 height=18 align=right><font size=2>&#160;</font></td><td width=82 height=18 align=left><font size=2>&#160 ;</font></td></tr><tr><td width=334 height=18 align=left><font size=2>Notes payable and current portion of long-term obligations </font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 3px 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align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2>&#160;</font></td></tr><tr><td width=334 height=20 align=left><font size=2><B>Mortgage</B></font></td><td width=12 height= 20 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=20 align=right><font size=2> -&#160;</font></td><td width=12 height=20 align=left><font size=2>&#160;</font></td><td width=12 height=20 align=left><font size=2>&#160;</font></td><td width=82 height=20 align=right><font size=2> 13,186&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right>< ;font size=2>&#160;</font></td></tr><tr><td width=334 height=20 align=left><font size=2><B>Other (3) </B></font></td><td width=12 height=20 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=20 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> (16,178)</B></font></td><td width=12 height=20 align=left><font size=2>&#160;</font></td><td width=12 height=20 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=20 align=right style="border-bottom: 2px solid #000000;"><font size=2> (11,864)</font></td></tr><tr><td width=334 height=20 align=left><font size=2><B>Total long-term debt </B></font></td><td width=12 height= 20 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td 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These notes are reported in current portion of long-term debt at December 31, 2008.<BR><BR>(2)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;In April 2003, we entered into an interest rate swap for an aggregate notional amount of $350 million. The interest rate swap effectively converted the fixed rate of 4.75% on $350 million of our notes, due 2018, into variable interest rates. The variable rates payable by us in connection with the swap agreement were based on six month LIBOR less a spread of 22.8 basis points and the fixed rate received by us matched the fixed interest payment due on the notes. On November 21, 2008, we unwound this interest rate swap. This transaction was not undertaken for liquidity purposes but rather to fix our effective interest rate to 3.2% for the remaining term of these notes. We received $44 million, excluding accrued interest, associated with the unwind of this interest rate swap. This amount will be reflected as a reduction of interest expense over the remaining term of these notes.<BR><BR>(3)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Other consists primarily of debt discounts and premiums.<BR><BR>On March 4, 2008, we issued $250 million of 10 year fixed rate notes with a coupon rate of 5.60%. The interest is paid semi-annually beginning September 2008. The notes mature on March 15, 2018. We simultaneously entered into two interest rate swaps for a total notional amount of $250 million to convert the fixed rate debt to a floating rate obligation bearing interest at 6 month LIBOR plus 111.5 basis points. The proceeds from these notes were used for general corporate purposes, including the repayment of commercial paper and repurchase of our stock.<BR><BR>In December 2007, we entered into a $150 million syndicated bank transaction priced at 3 month LIBOR plus 35 basis points. The proceeds from this credit facility, due 2 012, were used to pay off the $150 million variable rate debt that was due in 2010. <BR><BR>In September 2007, we issued $500 million of unsecured fixed rate notes maturing in September 2017. These notes bear interest at an annual rate of 5.75% and pay interest semi-annually beginning in March 2008. The proceeds from these notes were used for general corporate purposes, including the repayment of commercial paper, the financing of acquisitions, and repurchase of our stock.<BR><BR>In June 2008, we filed a &#8220;Well-known Seasoned Issuer&#8221; registration statement with the SEC which permits the issuance of debt securities, preferred stock, preference stock, common stock, purchase contracts, depositary shares, warrants and units. <BR><BR>The annual maturities of the outstanding long-term debt during each of the next five years are as follows: 2010 &#8211; no maturities; 2011 &#8211; no maturities; 2012 &#8211; $550 million; 2013 &#8211; $375 mi llion; and $2,950 million thereafter. The remaining outstanding notes with a $150 million face value are reported in current portion of long-term debt at December 31, 2008.<BR><BR>The fair value hedges basis adjustment represents the revaluation of fixed rate debt that has been hedged in accordance with SFAS No. 133. 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size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;&#160;Federal statutory provision </font></td><td width=12 height=17 align=left><font size=2><B>$</B></font></td><td width=82 height=17 align=right><font size=2><B> 249,612&#160;</B></font>& lt;/td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=center><font size=2>$</font></td><td width=82 height=17 align=right><font size=2> 231,249&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=82 height=17 align=right><font size=2> 320,072&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;&#160;Life insurance tax reserve, federal and state </font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=17 align=center><font size=2>& amp;#160;</font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2> -&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2> 20,000&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;&#160;State and local income taxes </font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2><B> 19,820&#160;</B></font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=center&g t;<font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2> 12,281&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td 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height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2> 51,724&#160;</font></td>< td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2> -&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;&#160;Rate change </font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2> 2,485&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2> -&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;&#160;Tax exempt income/reimbursement </font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2><B> (5,404)</B></font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2> (6,743)</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td>&l t;td width=82 height=17 align=right><font size=2> (15,110)</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;&#160;Federal income tax credits/incentives </font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2><B> (15,118)</B></font></td><td width=12 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size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> -& #160;</font></td></tr><tr><td width=334 height=18 align=left><font size=2>&#160;&#160;&#160;Other, net </font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> 3,614&#160;</B></font></td><td width=12 height=18 align=center><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2> (421)</font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2> 3,069&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;&#160;&#160;&#160;&#160;Provision for income taxes </font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;"><font size=2><B> 244,929&#160;</B></font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;"><font size=2> 280,222&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;"><font size=2> 335,004&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>Discontinued operations:</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td widt h=82 height=17 align=right><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;&#160;Federal statutory provision </font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right>< ;font size=2> -&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> (238,753)</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;&#160;State and local income taxes </font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> -&#160;&l t;/font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> 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height=18 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2><B>2008&#160;</B></font></td><td width=12 height=18 align=center style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td colspan=2 width=94 height=18 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td><td width=12 height=18 align=center style="border-top: 2px solid #000000;"><font size=2>&#160;</font& gt;</td><td colspan=2 width=94 height=18 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2006&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;U.S. Federal:</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=12 height=17 align=left><font s ize=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;&#160;&#160;Current </font></td><td width=12 height=17 align=left><font size=2><B>$</B></font></td><td width=82 height=17 align=right><font size=2><B> 112,931&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=82 height=17 align=right><font size=2> 136,528&#160;</font></td><td width=12 height=17 align=left><font size=2>& amp;#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=82 height=17 align=right><font size=2> 1,090,252&#160;</font></td></tr><tr><td width=334 height=18 align=left><font size=2>&#160;&#160;&#160;&#160;Deferred </font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> 81,936&#160;</B></font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;">&l t;font size=2> 53,235&#160;</font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2> (1,021,669)</font></td></tr><tr><td width=334 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2><B> 194,867&#160;</B></font></td><td width=12 height=18 align=left><font size=2>&#160;</font></t d><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2> 189,763&#160;</font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 2px 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size=2><B>&#160;</B></font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td></tr><tr><td wi dth=334 height=17 align=left><font size=2>&#160;&#160;&#160;&#160;Current </font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2><B> 17,058&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> 12,813&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> 179,602&#160;</font></td></tr><tr><td width=334 height=18 align=l eft><font size=2>&#160;&#160;&#160;&#160;Deferred </font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font 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size=2><B>&#160;</B></font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2&g t;&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;&#160;&#160;Current </font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2>& lt;B> 39,974&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> 5,964&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> 7,567&#160;</font></td></tr><tr><td width=334 height=18 align=left><font size=2>&#160;&#160;&#160;&#160;Deferred </font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="b order-bottom: 2px solid #000000;"><font size=2><B> 7,296&#160;</B></font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font 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width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;Total Current </font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2><B> 169,963&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2& gt; 155,305&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> 1,277,421&#160;</font></td></tr><tr><td width=334 height=18 align=left><font size=2>&#160;&#160;Total Deferred </font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> 102,666&#160;</B></font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160 ;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2> 119,383&#160;</font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2> (1,164,255)</font></td></tr><tr><td width=334 height=18 align=left><font size=2>Total provision for income taxes </font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 27 2,629&#160;</B></font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 274,688&#160;</font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=82 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 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align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2><B>2008&#160;</B></font></td><td width=12 height=18 align=center style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td colspan=2 width=94 height=18 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>Deferred tax liabilities:</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>Depreciation </font></td><td width=12 height=17 align=left><font size=2><B>$</B></font></td><td width=82 height=17 align=right><font size=2><B> 67,835&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=82 height=17 align=right><font size=2> 44,125&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>Deferred profit (for tax purposes) on </font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;&#160;sales to finance 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size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> 76,830&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>Amortizable intangibles</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2>& lt;B> 61,866&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> 45,311&#160;</font></td></tr><tr><td width=334 height=18 align=left><font size=2>Other </font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=18 align=right 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size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>Net deferred taxes </font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2><B> 314,173&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2> 518,093&#160;</font></t d></tr><tr><td width=334 height=17 align=left><font size=2>Less amounts included in current and</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2><B>&#160;</B></font></td><td rowspan=2 width=12 height=35 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=right><font size=2>&#160;</font></td></tr><tr><td width=334 height=18 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Most of these losses can be carried forward indefinitely. <BR><BR>It has not been necessary to provide for income taxes on $710 million of cumulative undistributed earnings of subsidiaries outside the U.S. These earnings will be either indefinitely reinvested or remitted substantially free of additional tax. Determination of the liability that would result in the event all of these earnings were remitted to the U.S. is not practicable. It is estimated, however, that withholding taxes on such remittances would approximate $15 million.<BR><BR>In June 2006, the FASB issued FIN No. 48, Accounting for Uncertainty in Income Taxes, which supplements SFAS No. 109, Accounting for Income Taxes, by defining the confidence level that a tax position must meet in order to be recognized in the financial statements. FIN No. 48 requires a two-step approach under which the tax effect of a position is recognized only if it is &#8220;more-likely-than-not&#8221; to be sustained and the amount of tax benefit recognized is equal to the largest tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement of the tax position. This is a different standard for recognition than the approach previously required. Both approaches require us to exercise considerable judgment and estimates are inherent in both processes. We adopted the provisions of FIN No. 48 on January 1, 2007. As a resul t, on initial adoption we recognized an $84.4 million increase in our liability for uncertain tax positions and a corresponding reduction to our opening retained earnings. The total amount of unrecognized tax benefits at December 31, 2008 and 2007 were $434.2 million and $398.9 million, respectively, of which $370.9 million and $335.7 million, respectively, would affect the effective tax rate if recognized. 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height=17 align=right><font size=2> -&#160;</font></td></tr><tr><td width=418 height=17 align=left><font size=2>Decreases relating to settlements with tax authorities </font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=89 height=17 align=right><font size=2><B> (7,426)</B></font></td><td width=12 height=17 align=right><font size=2>&#160;</font></td><td width=12 height=17 a lign=right><font size=2>&#160;</font></td><td width=89 height=17 align=right><font size=2> (2,165)</font></td></tr><tr><td width=418 height=18 align=left><font size=2>Reductions as a result of a lapse of the applicable statute of limitations </font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=89 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> (3,040)</B></font></td><td width=12 height=18 align=right><font size=2>&#160;</font></td><td width=12 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=89 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2> (25,497)</font></td></tr> <tr><td width=418 height=18 align=left><font size=2>Balance at end of year</font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=89 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 434,164&#160;</B></font></td><td width=12 height=18 align=right><font size=2>&#160;</font></td><td width=12 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=89 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 398,878&#160;</font></td></tr></table></DIV><div><font size=2><p>Tax authorities continually examin e our tax filings. On a regular basis, we conclude tax return examinations, statutes of limitations expire, and court decisions interpret tax law. We regularly assess tax uncertainties in light of these developments. As a result, it is reasonably possible that the amount of our unrecognized tax benefits will increase or decrease in the next 12 months, but we expect this change to be less than 10% of our unrecognized tax benefits. We recognize interest and penalties related to uncertain tax positions in our provision for income taxes or discontinued operations as appropriate. During the years ended December 31, 2008 and 2007 we recorded $25.6 million and $9.5 million, respectively, in interest and penalties and this amount was included in discontinued operations. We had $139.2 million and $113.6 million accrued for the payment of interest and penalties at December 31, 2008 and December 31, 2007, respectively.<BR><BR>Other Tax Matters<BR><BR>We regularly assess the likelihood of t ax adjustments in each of the tax jurisdictions in which we have operations and account for the related financial statement implications. Tax reserves have been established which we believe to be appropriate given the possibility of tax adjustments. Determining the appropriate level of tax reserves requires us to exercise judgment regarding the uncertain application of tax law. The amount of reserves is adjusted when information becomes available or when an event occurs indicating a change in the reserve is appropriate. Future changes in tax reserve requirements could have a material impact on our results of operations.<BR><BR>We are continually under examination by tax authorities in the United States, other countries and local jurisdictions in which we have operations. The years under examination vary by jurisdiction. The current IRS exam of tax years 2001-2004 is estimated to be completed within the next two years. In connection with this exam, we have recently received notices of propo sed adjustments to our filed returns. We have accrued our best estimate of the tax, interest and penalties that may result from these proposed adjustments in accordance with FIN 48. We are disputing a formal request from the IRS in the form of a civil summons to provide certain company workpapers. We believe that certain documents being sought should not be produced because they are privileged. In a similar case, the U.S. Court of Appeals for the First Circuit ruled that certain company workpapers were privileged, however, the case was remanded to the lower court to consider other related issues. Also in connection with the 2001-2004 audits, we have entered into a settlement with the IRS regarding the tax treatment of certain lease transactions related to the Capital Services business that we sold in 2006. Prior to 2007, we accrued and paid the IRS the additional tax and interest associated with this settlement. A variety of post-1999 tax years remain subject to examination by other tax authorities, i ncluding the U.K., Canada, France, Germany and various U.S. states. We have accrued our best estimate of the tax, interest and penalties that may result from these tax uncertainties in these and other jurisdictions in accordance with FIN 48. However, the resolution of such matters could have a material impact on our results of operations, financial position and cash flows.<BR><BR>In August 2006, we reached a settlement with the IRS governing all outstanding tax audit issues in dispute for the tax years through 2000. Accordingly, in 2006 we recorded $61 million of additional tax expense. Of the $61 million, $41 million related to the Capital Services business and was included in discontinued operations and $20 million was included in continuing operations. The federal statute of limitations for these years has now expired. In 2006, we accrued in discontinued operations an additional tax expense of $16.2 million to record the impact of the Tax Increase Prevention and Reconciliation Act (& #8220;TIPRA&#8221;). The TIPRA legislation repealed the exclusion from federal income taxation of a portion of the income generated from certain leveraged leases of aircraft by foreign sales corporations. See Note 2 to the Consolidated Financial Statements for further discussion of the discontinued operations. <BR><BR>In 2008, an analysis of the book and tax bases of leasing assets indicated that an adjustment to the deferred tax accounts was required. A deferred tax asset related to the acceleration of rental income for tax purposes was not properly captured in prior years. A benefit of $9.5 million related to years presented was recorded in the 2008 tax provision and an adjustment of $16.9 million was made to opening retained earnings related to earlier years to establish the related deferred tax assets. The impact of the adjustments was not material to any individual year. <BR><BR>During 2009, we expect to reverse tax benefits of approximately $11 to $13 million associated with the expiration of vested stock options and the vesting of restricted stock units previously granted to our employees. This write-off of deferred tax assets will not increase the amount of tax to be paid.<BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>10. Preferred Stockholders&#8217; Equity in Subsidiary Companies<BR><BR>Pitney Bowes International Holdings, Inc., a subsidiary of the Company, has 3,750,000 shares outstanding or $375 million of variable term voting preferred stock owned by certain outside institutional investors. These preferred shares are entitled to 25% of the combined voting power of all classes of capital stock. All outstanding common stock of Pitney Bowes International Holdings, Inc., representing the remaining 75% of the combined voting power of all classes of capital stock, is owned directly or indirectly by Pitney Bowes Inc. The preferred stock, $.01 par value, is entitled to cumulative dividends at rates set at auction. The weighted average dividend rate in 2008 and 2007 was 4.9%. Preferred dividends are included in minority interest (preferred stock dividends of subsidiaries) in the Consolidated Statements of Income. The preferred stock is subject to mandatory redemption based on certain events, at a redemption price not less than $100 per share, plus the amount of any dividends accrued or in arrears. No dividends were in arrears at December 31, 2008 or 2007.<BR><BR>At December 31, 2007, a subsidiary of the Company had 100 shares or $10 million of 9.11% Cumulative Preferred Stock, mandatorily redeemable in 20 years, owned by an institutional investor. In August 2008, we redeemed 100% of this Preferred Stock resulting in a net loss of $1.8 million.<BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>11. Stockholders&#8217; (Deficit) Equity<BR><BR>At December 31, 2008, 480,000,000 shares of common stock, 600,000 shares of cumulative preferred stock, and 5,000,000 shares of preference stock were authorized. At December 31, 2008, 206,181,193 shares of common stock (net of 117,156,719 shares of treasury stock), 135 shares of 4% convertible cumulative preferred stock (4% preferred stock) and 36,056 shares of $2.12 convertible preference stock ($2.12 preference stock) were issued and outstanding. In the future, the Board of Directors can issue the balance of unreserved and unissued preferred stock (599,865 shares) and preference stock (4,963,944 shares). The Board will determine the dividend rate, terms of redemption, term s of conversion (if any) and other pertinent features. At December 31, 2008, unreserved and unissued common stock (exclusive of treasury stock) amounted to 115,142,879 shares.<BR><BR>The 4% preferred stock outstanding, entitled to cumulative dividends at the rate of $2 per year, can be redeemed at the Company&#8217;s option, in whole or in part at any time, at the price of $50 per share, plus dividends accrued to the redemption date. Each share of the 4% preferred stock can be converted into 24.24 shares of common stock, subject to adjustment in certain events. <BR><BR>The $2.12 preference stock is entitled to cumulative dividends at the rate of $2.12 per year and can be redeemed at the Company&#8217;s option at the rate of $28 per share. Each share of the $2.12 preference stock can be converted into 16.53 shares of common stock, subject to adjustment in certain events. <BR><BR>Cash dividends paid on common stock were $1.40 per share, $1.32 per share and $1.28 per share for 2008, 2007, and 2006 respectively. <BR><BR>At December 31, 2008, a total of 599,278 shares of common stock were reserved for issuance upon conversion of the 4% preferred stock (3,272 shares) and $2.12 preference stock (596,006 shares). 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size=2>&#160;</font></td><td width=82 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;< /font></td><td width=82 height=17 align=left><font size=2>&#160;</font></td><td width=75 height=17 align=left><font size=2>&#160;</font></td></tr><tr><td width=338 height=18 align=left><font size=2>&#160;</font></td><td colspan=2 width=94 height=18 align=center style="border-bottom: 2px solid #000000;"><font size=2><B>2008&#160;</B></font></td><td width=12 height=18 align=center><font size=2>&#160;</font></td><td colspan=2 width=94 height=18 align=center style="border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td><td width=12 height=18 align=center><font 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size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2> 22,172&#160;</font></td><td width=12 height=17 align=left><font size=2> ;&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=82 height=17 align=right><font size=2> -&#160;</font></td><td width=75 height=17 align=left><font size=2>&#160;</font></td></tr><tr><td width=338 height=21 align=left><font size=2>Net unamortized loss on pension and postretirement plans (2) </font></td><td width=12 height=21 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=21 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> (650,382)</B></font></td><td width=12 height=21 align=left><font size=2>&#160;</font></td><td width=12 height=21 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></fon t></td><td width=82 height=21 align=right style="border-bottom: 2px solid #000000;"><font size=2> 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width=82 height=18 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=12 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=82 height=18 al ign=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=75 height=18 align=left><font size=2>&#160;</font></td></tr><tr><td colspan=10 width=719 height=52 align=left><font size=2>(1) Includes net deferred translation gains of $41.7 million and $47.6 million for the years ended December 31, 2008 and 2007, respectively. 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At December 31, 2008, $24.5 million of unrecognized compensation cost related to non-vested restricted stock units is expected to be recognized over a weighted average period of 1.8 years.<BR><BR>The total intrinsic value of options exercised during the years ended December 31, 2008, 2007 and 2006, was $1.1 million, $28.1 million and $23.2 million, respectively. The total intrinsic value of restricted stock units converted during 2008 was $4.2 million. Proceeds from issuance of stock in our Consolidated Statements of Cash Flows for 2007 and 2006 include $5.0 million and $3.4 million, respectively, of windfall tax benefits from stock options exercised and restricted stock units converted.<BR><BR>We settle employee stock compensation awards with treasury shares.<BR><BR>Our stock-based compensation awards require a minimum requisite service period of one year for retirement eligible employees.<BR><BR>At December 31, 2008, there were 14,677,468 shares available for future grants of stock options and restricted stock units under our stock plans. <BR><BR>Incentive Awards<BR>Long-term incentive awards are provided to employees under the terms of our plans. The Executive Compensation Committee of the Board of Directors administers these plans. Awards granted under these plans may include stock options, restricted stock units, other stock based awards, cash or a ny combination thereof.<BR><BR>Effective in 2006, we changed the components of our long-term incentive compensation structure. This change increased the amount of restricted stock units and cash incentive awards issued to employees and reduced the number of stock options granted.<BR><BR>We have the following stock plans that are described below: the U.S. and U.K. Stock Option Plans (ESP), the U.S. and U.K. Employee Stock Purchase Plans (ESPP), and the Directors&#8217; Stock Plan.<BR><BR>Stock Options<BR>Under our stock plan, certain officers and employees are granted options at prices equal to the market value of our common shares at the date of grant. Options granted in 2004 and prior thereto generally became exercisable in three equal installments during the first three years following their grant and expire after ten years. 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We believe that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in estimating the fair value of our stock option grants. 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The compensation expense for each award is recognized over the performance period. We issued 10,000 shares of restricted stock in August 2008. We did not issue any shares of restricted stock during 2007 and 2006. During 2008 , compensation expense was offset by forfeiture reversals. 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The weighted average grant price was $47.91 and $42.63 for 2007 and 2006, respectively. The intrinsic value of the outstanding restricted stock units at December 31, 2008 was $20.2 million, with a weighted average remaining term of 2.6 years.<BR><BR>Employee Stock Purchase Plans<BR>The U.S. Employee Stock Purchase Plan enables substantially all U.S. and Canadian employees to purchase shares of our common stock at a discounted offering price and is considered a compensatory plan in accordance with SFAS No. 123(R). In 2008, the offering price was 85% of the average price of our common stock on the New York Stock Exchange on the offering date. At no time will the exercise price be less than the lowest price permitted under Section 423 of the Internal Revenue Code. The U.K. S.A.Y.E. Plan also enables eligible employees of our participating U.K. subsidiaries to purchase shares of our stock at a discounted offering price which, in 2008, was 90% of the average closing pr ice of our common stock on the New York Stock Exchange for the three business days preceding the offering date. We may grant rights to purchase up to 6,226,677 common shares to our regular employees under the U.S. and U.K. Plans. Compensation expense relating to the U.S. Plan is recognized over a twelve month participation period. Compensation expense for the U.K. Plan is recognized over participation periods of 3 or 5 years.<BR><BR>We granted rights to purchase 437,350 shares in 2008, 446,755 shares in 2007 and 435,592 shares in 2006. The per share fair value of rights granted was $5 in 2008, $8 in 2007 and $7 in 2006 for the U.S. ESPP and $4 in 2008, $7 in 2007 and $8 in 2006 for the U.K. ESPP.<BR><BR>Directors&#8217; Stock Plan<BR>Under this plan, each non-employee director is granted 2,200 shares of restricted common stock annually. Shares granted at no cost to the directors were 26,400 in 2008 and 24,665 in 2007. Compensation expense, net of taxes, was $0.6 millio n for 2008, $0.8 million for 2007 and $0.4 for 2006. The shares carry full voting and dividend rights but, except as provided herein, may not be transferred or alienated until the later of (1) termination of service as a director, or, if earlier, the date of a change of control, or (2) the expiration of the six-month period following the grant of such shares. If a director terminates service as a director prior to the expiration of the six-month period following a grant of restricted stock, that award will be forfeited. The Directors&#8217; Stock Plan permits certain limited dispositions of restricted common stock to family members, family trusts or partnerships, as well as donations to charity after the expiration of the six-month holding period, provided the director retains a minimum of 7,500 shares of restricted common stock.<BR><BR>Non-employee directors may defer up to 100% of their eligible compensation, subject to the terms and conditions of the Pitney Bowes Deferred Incentive Savi ngs Plan for directors. Participants may allocate deferred compensation among specified investment choices. Previously, the investment choices offered included stock options under the Directors&#8217; Stock Plan. Stock options acquired under this plan were generally exercisable three years following their grant and expired after a period not to exceed ten years. There were 15,269, 22,091 and 41,716 options outstanding under this plan at December 31, 2008, 2007 and 2006, respectively. Beginning with the 2004 plan year, options were no longer offered as an investment choice.<BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>13. Retirement Plans and Postretirement Medical Benefits<BR><BR>We have several defined benefit and defined contribution retirement plans covering substantially all employees worldwide. Benefits are primarily based on employees&#8217; compensation and years of service. Our contributions are determined based on the funding requirements of U.S. federal and other governmental laws and regulations. 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size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&am p;#160;</B></font></td><td width=96 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=left><font size=2>&#160;</font></td></tr><tr><td colspan=12 width=718 height=15 align=left><font size=2>The change in benefit obligations, plan assets and the funded status for defined benefit pension plans are as follows:</font></td></tr><tr><td width=299 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2& gt;&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=left><font size=2>&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>&#160;</font></td><td colspan=5 width=186 height=15 align=center style="border-bottom: 2px solid #000000;"><font size =2><B>United States</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td colspan=5 width=221 height=15 align=center style="border-bottom: 2px solid #000000;"><font size=2><B>Foreign</B></font></td></tr><tr><td width=299 height=15 align=left><font size=2><B>&#160;</B></font></td><td colspan=2 width=87 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2><B>2008&#160;</B></font></td><td width=12 height=15 align=center style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td colspan=2 width=87 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td><td width=12 height=15 align=left><font size=2 >&#160;</font></td><td colspan=2 width=108 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2><B>2008&#160;</B></font></td><td width=12 height=15 align=center style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td colspan=2 width=101 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2><B>Change in benefit obligation:</B></font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width= 12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=75 height=15 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=96 height=15 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=89 height=15 align=left style="border-top: 2px solid #000000;"><font size=2> ;&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Benefit obligation at beginning of year </font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=75 height=15 align=right><font size=2><B> 1,596,486&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$</font></td><td width=75 height=15 align=right><font size=2> 1,624,743&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=96 height=15 align=right><font size=2><B> 557,185&#160;</B></font></td><td width=12 hei ght=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$</font></td><td width=89 height=15 align=right><font size=2> 523,958&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Service cost </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size=2><B> 29,699&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2> 28,500&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=l eft><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right><font size=2><B> 10,562&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> 13,427&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Interest cost </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size=2><B> 96,205&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td> <td width=75 height=15 align=right><font size=2> 94,173&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right><font size=2><B> 29,140&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> 27,720&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Plan participants&#8217; contributions </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2> -&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right><font size=2><B> 2,978&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> 3,004&#160;</font></td></tr><tr><td width=299 height=15 align=left>< font size=2>Actuarial loss (gain)</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size=2><B> 528&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2> (41,049)</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right><font size=2><B> (75,728)</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><f ont size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> (25,744)</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Foreign currency changes </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2> -&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right& gt;<font size=2><B> (117,234)</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> 32,399&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Curtailment </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2> -&#160;</font></td><td width=12 height=15 align=le ft><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> 906&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Special termination benefits </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size=2><B> 2,105&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></ td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2> 1,187&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right><font size=2><B> 632&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> -&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Benefits paid </font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2> <B>&#160;</B></font></td><td width=75 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> (119,643)</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=75 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2> (111,068)</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=center style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> (23,028)</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=89 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2> (18,485)</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Benefit obligation at end of year </font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=75 height=15 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 1,605,380&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000 000;"><font size=2>$</font></td><td width=75 height=15 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 1,596,486&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=96 height=15 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 384,507&#160;</B></font></td><td width=12 height=15 align=center><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=89 height=15 align=right style="border-top: 2px solid #000000;bor der-bottom: 3px double #000000;"><font size=2> 557,185&#160;</font></td></tr></table></DIV><DIV><table style="border-collapse: collapse; margin-top: 20px;"><tr><td width=299 height=15 align=left><font size=2>&#160;</font></td><td colspan=5 width=186 height=15 align=center style="border-bottom: 2px solid #000000;"><font size=2><B>United States</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td colspan=5 width=221 height=15 align=center style="border-bottom: 2px solid #000000;"><font size=2><B>Foreign</B></font></td></tr><tr><td width=299 height=15 align=left><font size=2><B>&#160;</B></font></td><td colspan=2 width=87 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>< B>2008&#160;</B></font></td><td width=12 height=15 align=center style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td colspan=2 width=87 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td><td width=12 height=15 align=center><font size=2>&#160;</font></td><td colspan=2 width=108 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2><B>2008&#160;</B></font></td><td width=12 height=15 align=center style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td colspan=2 width=101 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td></tr><tr><td width=299 heigh t=17 align=left><font size=2><B>Change in plan assets:</B></font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=75 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=75 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=96 h eight=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=89 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Fair value of plan assets at beginning of year </font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=75 height=15 align=right><font size=2><B> 1,675,002&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$& lt;/font></td><td width=75 height=15 align=right><font size=2> 1,655,283&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=96 height=15 align=right><font size=2><B> 532,627&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$</font></td><td width=89 height=15 align=right><font size=2> 478,375&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Actual return on plan assets </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size =2><B> (390,374)</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2> 121,973&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right><font size=2><B> (101,822)</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> 31,554&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Company contributions </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size=2><B> 10,286&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2> 8,814&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right><font size=2><B> 7,868&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align= left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> 9,615&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Plan participants&#8217; contributions </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2> -&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td> <td width=96 height=15 align=right><font size=2><B> 2,978&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> 3,004&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Foreign currency changes </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2> -&#160;< ;/font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right><font size=2><B> (106,417)</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> 28,564&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Benefits paid </font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> (119,643)< ;/B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=75 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2> (111,068)</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> (23,028)</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td> ;<td width=89 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2> (18,485)</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Fair value of plan assets at end of year </font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=75 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width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=left><font size=2>&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Fair value of plan assets at end of year </font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=75 height=15 align=right><font size=2><B> 1,175,271&#160;</B></font>& lt;/td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$</font></td><td width=75 height=15 align=right><font size=2> 1,675,002&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=96 height=15 align=right><font size=2><B> 312,206&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$</font></td><td width=89 height=15 align=right><font size=2> 532,627&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Benefit obligations at end of year </font></td ><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> 1,605,380&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=75 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2> 1,596,486&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right style="border-bottom: 2px solid #000000;" ><font size=2><B> 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#000000;"><font size=2> 78,516&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=96 height=15 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> (72,301)</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</ font></td><td width=89 height=15 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> (24,558)</font></td></tr></table></DIV><DIV><table style="border-collapse: collapse; margin-top: 20px;"><tr><td colspan=12 width=718 height=34 align=left><font size=2>Information provided in the table below is only for pension plans with an accumulated benefit obligation in 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style="border-bottom: 2px solid #000000;"><font size=2><B>United States</B></font></td><td width=12 heigh t=15 align=left><font size=2><B>&#160;</B></font></td><td colspan=5 width=221 height=15 align=center style="border-bottom: 2px solid #000000;"><font size=2><B>Foreign</B></font></td></tr><tr><td width=299 height=15 align=left><font size=2>&#160;</font></td><td colspan=2 width=87 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2><B>2008&#160;</B></font></td><td width=12 height=15 align=center style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=75 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2007&#160;</fo nt></td><td width=12 height=15 align=center><font size=2><B>&#160;</B></font></td><td colspan=2 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align=right><font size=2> 80,497&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=96 height=15 align=right> ;<font size=2><B> 34,747&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$</font></td><td width=89 height=15 align=right><font size=2> 34,428&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Fair value of plan assets </font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=75 height=15 align=right><font size=2><B> 1,175,271&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$</font></td><td width=75 height=15 align=right><font size=2> 1,656&#160;</font></td><td width=12 height=15 align =left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=96 height=15 align=right><font size=2><B> 9,120&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$</font></td><td width=89 height=15 align=right><font size=2> 10,885&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=left><font size=2>&#160;</font></td></tr><tr><td colspan=12 width=718 height=49 align=left><font size=2>The accumulated benefit obligation for all U.S. defined benefit plans at December 31, 2008 and 2007 was $1.5 billion for both years. 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solid #000000;"><font size=2>&#160;</font></td><td colspan=2 width=87 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td colspan=2 width=108 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2><B>2008&#160;</B></font></td><td width=12 height=15 align=center style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td colspan=2 width=101 height=15 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td ></tr><tr><td width=299 height=17 align=left><font size=2>Non-current asset </font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>$</B></font></td><td width=75 height=17 align=right style="border-top: 2px solid #000000;"><font size=2><B> -&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>$</font></td><td width=75 height=17 align=right style="border-top: 2px solid #000000;"><font size=2> 178,288&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>$</B></font></td><td w idth=96 height=17 align=right style="border-top: 2px solid #000000;"><font size=2><B> 184&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>$</font></td><td width=89 height=17 align=right style="border-top: 2px solid #000000;"><font size=2> 6,921&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Current liability </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td 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style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=l eft style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=89 height=15 align=right style="border-top: 3px double #000000;"><font size=2>&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2><B>Pre-tax amounts recognized in accumulated other</B></font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2& gt;&#160;</font></td><td width=75 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2>&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2><B>comprehensive income (&#8220;AOCI&#8221;) consist of:</B></font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td> ;<td width=75 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2>&#160;</font></td></tr><tr><td width= 299 height=15 align=left><font size=2>Net actuarial loss </font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=75 height=15 align=right><font size=2><B> 833,674&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$</font></td><td width=75 height=15 align=right><font size=2> 328,968&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=96 height=15 align=right><font size=2><B> 119,733&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 heig ht=15 align=left><font size=2>$</font></td><td width=89 height=15 align=right><font size=2> 93,186&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Prior service cost/(credit) </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right><font size=2><B> (113)</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2> (2,673)</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 heigh t=15 align=right><font size=2><B> 1,211&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=right><font size=2> 2,266&#160;</font></td></tr><tr><td width=299 height=15 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solid #000000;"><font size=2>&#160;</font></td><td width=89 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2> (14)</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Total </fo nt></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=75 height=15 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 833,561&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=75 height=15 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 326,295&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left style="border-top: 2px solid 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width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B& gt;</font></td><td width=96 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=left><font size=2>&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2><B>AOCI into net periodic benefits cost in 2009 are as</B></font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 heig ht=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=left><font size=2>&#160;</font></td></tr><tr><td width=299 height=17 align=left><font size=2><B>follows:</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=17 align=left><font size=2><B>&#160;</B></font></td&g t;<td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=75 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=96 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=89 height=17 align=left><font size=2>&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Net actuarial loss </font></td><td width=12 height =15 align=left><font size=2><B>$</B></font></td><td width=75 height=15 align=right><font size=2><B> 27,309&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=96 height=15 align=right><font size=2><B> 2,645&#160;</B></font></td><td width=12 height=15 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size=2>&#160;</font></td></tr><tr><td width=299 height=15 align=left><font size=2>Transition obligation </font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=75 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2><B>-</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font siz e=2>&#160;</font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=96 height=15 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> (10)</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=89 height=15 align=left><font 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size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=65 height=16 align=right><font size=2> -&#160;</font></td><td width=9 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align= left><font size=2>&#160;</font></td><td width=65 height=16 align=right><font size=2> -&#160;</font></td><td width=9 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=65 height=16 align=right><font size=2><B> 142&#160;</B></font></td><td width=9 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=65 height=16 align=right><font size=2> (706)</font></td><td width=9 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=65 height=16 align=right><font size=2> (654)</font></t d></tr><tr><td width=215 height=16 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size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160 ;</font></td><td width=75 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=50 height=15 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=15 align=left><font size=2>Fair value of plan assets at beginning of year </font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=82 height=15 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$</font></td><td width=82 height=15 align=right><font size=2> -&#160;</fo nt></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=50 height=15 align=right><font size=2>&#160;</font></td></tr><tr><td width=334 height=15 align=left><font size=2>Company contribution </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=15 align=right><font size=2><B> 31,060&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font>&l t;/td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=82 height=15 align=right><font size=2> 30,183&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=50 height=15 align=right><font size=2>&#160;</font></td></tr><tr><td width=334 height=15 align=left><font size=2>Plan participants&#8217; contributions </font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td ><td width=82 height=15 align=right><font size=2><B> 8,627&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=82 height=15 align=right><font size=2> 7,951&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=50 height=15 align=right><font 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align=right><font size=2>&#160;</font></td></tr><tr><td width=334 height=15 align=left><font size=2><B>Funded status, end of year:</B></font></td><td width=12 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=15 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=82 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>& ;#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=75 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=50 height=15 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=15 align=left><font size=2>Fair value of plan assets at end of year </font></td><td width=12 height=15 align=left><font size=2><B>$</B></font></td><td width=82 height=15 align=right><font size=2><B> -&#160;</B></font></td><td width=12 height=15 align=left><font size=2>&#160;</font></td><td width=12 height=15 align=left><font size=2>$</font&g t;</td><td width=82 height=15 align=right><font size=2> -&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=75 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=12 height=15 align=right><font size=2>&#160;</font></td><td width=50 height=15 align=right><font size=2>&#160;</font></td></tr><tr><td width=334 height=15 align=left><font size=2>Benefit obligations at end of year </font></td><td width=12 height=15 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=15 align=right style="border-bott om: 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align=left><font size=2><B>Amounts recognized in the Consolidated </B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=17 align=center><font size=2><B>&#160;</B></font></td><td rowspan=2 width=12 height=34 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=82 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><t d width=12 height=17 align=center><font size=2>&#160;</font></td><td width=75 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=50 height=17 align=center><font size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2><B>Balance Sheets consist of:</B></font></td><td colspan=2 width=94 height=17 align=center style="border-bottom: 2px solid #000000;"><font size=2><B>2008&#160;</B></font></td><td colspan=2 width=94 height=17 align=center style="border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td><td width=12 height=17 align=center><font size=2>&#160;</font&g t;</td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=75 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=12 height=17 align=center><font size=2>&#160;</font></td><td width=50 height=17 align=center><font size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>Current liability </font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B>$</B></font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;"><font size=2><B> (26,920)</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 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For the year ended December 31, 2007, the asset impairment charges included in restructuring activities related to the wri te-off of inventory of $48.1 million, rental assets of $61.5 million, lease residual values of $46.1 million and other assets of $8.8 million. <BR><BR>Additional asset impairments, unrelated to restructuring, were also recorded in 2008 and 2007. For 2008, these other impairment charges are related to intangible assets of $16.0 million principally due to a loss of a customer in our Marketing Services business and the ongoing shift in market conditions for the litigation support vertical in our Management Services business. For 2007, additional asset impairment charges included the write-down of certain intangible assets for $8.5 million.<BR><BR>Other exit costs of $35.3 million and $5.8 million in 2008 and 2007, respectively, relate primarily to lease termination fees, facility closing costs, contract cancellation costs and outplacement costs.<BR><BR>As of December 31, 2008, 1,926 terminations have occurred under the restructuring program and approximately 300 additional unfilled positions have been eliminated. 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size=2>&#160;</font></td><td width=91 height=17 align=right><font size=2> -&#160;</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=17 align=right><font size=2><B> 46,695&#160;</B></font></td><td width=9 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&a mp;#160;</B></font></td><td width=75 height=17 align=right><font size=2><B> -&#160;</B></font></td><td width=9 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=68 height=17 align=right><font size=2><B> (46,695)</B></font></td><td width=9 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=99 height=17 align=right><font size=2><B> -&#160;</B></font></td></tr><tr><td width=171 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style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=68 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> -&#160;</B></font></td><td width=9 height=18 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=99 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> 32,678&#160;</B></font></td></tr><tr><td width=171 height=18 align=left><font size=2>Total </font></td><td width=12 height=18 align=left style="border-to p: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=91 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 87,046&#160;</font></td><td width=9 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 2px solid 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size=2><B>&#160;</B></font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=99 height=18 align=right style="border-top: 2px solid #000000; border-bottom: 3px double #000000;"><font size=2><B> 141,109&#160;</B></font></td></tr><tr><td width=171 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=91 height=18 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=9 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=75 height=18 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=9 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top : 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=75 height=18 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=9 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=68 height=18 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=9 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=99 height=18 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td></tr><tr><td width=171 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=91 height=17 align=left><font size=2>&#160;</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=17 align=left><font size=2>&#160;</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=17 align=left><font size=2>&#160;</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&# 160;</B></font></td><td width=68 height=17 align=left><font size=2>&#160;</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=99 height=17 align=left><font size=2>&#160;</font></td></tr><tr><td width=171 height=36 align=left><font size=2>&#160;</font></td><td colspan=2 width=103 height=36 align=center style="border-bottom: 2px solid #000000;"><font size=2>Balance at December 31, 2006</font></td><td width=9 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style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=75 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=75 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=68 heigh t=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=99 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td></tr><tr><td width=171 height=17 align=left><font size=2>Severance and benefit costs </font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=91 height=17 align=right><font size=2> -&#160;</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=75 height=17 align=right><font size=2> 85 ,137&#160;</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=75 height=17 align=right><font size=2> (3,886)</font></td><td width=9 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=68 height=17 align=right><font size=2> -&#160;</font></td><td width=9 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height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2> -&#160;</font></td><td width=9 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=68 height=18 align=right style="border-bottom: 2px solid #000000;"><font size=2> -&#160;</font></td><td width=9 height=18 align=left><font size=2>&#160;</font></td><td width=12 height=18 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=99 height=18 align=right style="border-bottom: 2px solid #00000 0;"><font size=2> 5,795&#160;</font></td></tr><tr><td width=171 height=18 align=left><font size=2>Total </font></td><td width=12 height=18 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=91 height=18 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 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In connection with this plan, we recorded pre-tax restructuring charges of $36 million for the year ended December 31, 2006. The program was completed during 2006 and, therefore, there were no additional restructuring charges after December 31, 2006. We made restructuring payments of $3 million, $29 million and $51 million during 2008, 2007 and 2006, respectively. See Note 1 to the Consolidated Financial Statements for our accounting policy related to restructuring charges and asset impairments. </font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>15. Commitments, Contingencies and Regulatory Matters<BR><BR>Legal Proceedings<BR><BR>In the ordinary course of business, we are routinely defendants in or party to a number of pending and threatened legal actions. These may involve litigation by or against us relating to, among other things, contractual rights under vendor, insurance or other contracts; intellectual property or patent rights; equipment, service, payment or other disputes with customers; or disputes with employees. Some of these actions may be brought as a purported class action on behalf of a purported class of employees, customers or others. <BR><BR>Our wholly-owned subsidiary, Imagitas, Inc., is a defendant in ten purported cla ss actions filed in six different states. These lawsuits have been coordinated in the United States District Court for the Middle District of Florida, In re: Imagitas, Driver&#8217;s Privacy Protection Act Litigation (Coordinated, May 28, 2007). Each of these lawsuits alleges that the Imagitas DriverSource program violates the federal Drivers Privacy Protection Act (DPPA). Under the DriverSource program, Imagitas enters into contracts with state governments to mail out automobile registration renewal materials along with third party advertisements, without revealing the personal information of any state resident to any advertiser. The DriverSource program assists the state in performing its governmental function of delivering these mailings and funding the costs of them. The plaintiffs in these actions are seeking both statutory damages under the DPPA and an injunction against the continuation of the program. On April 9, 2008, the District Court granted Imagitas&#8217; motion for summary judgme nt in one of the coordinated cases, Rine, et al. v. Imagitas, Inc. (United States District Court, Middle District of Florida, filed August 1, 2006). On July 30, 2008, the District Court issued a final judgment in the Rine lawsuit and stayed all of the other cases filed against Imagitas pending an appellate decision in Rine. On August 27, 2008, the Rine plaintiffs filed an appeal of the District Court&#8217;s decision in the United States Court of Appeals, Eleventh Judicial Circuit. The appellate process in this case is proceeding. <BR><BR>We expect to prevail in the lawsuits against Imagitas; however, as litigation is inherently unpredictable, there can be no assurance in this regard. If the plaintiffs do prevail, the results may have a material effect on our financial position, future results of operations or cash flows, including, for example, our ability to offer certain types of goods or services in the future.<BR><BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>Product Warranty<BR><BR>We provide product warranties in conjunction with certain product sales, generally for a period of 90 days from the date of installation. 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size=2>&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>2013</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=96 height=16 align=right><font size=2> 21,163&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=left&g t;<font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=75 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=75 height=16 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>Thereafter </font></td><td width=12 height=16 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=96 height=16 align=right style="border-bottom: 2px solid #000000;"><font size=2> 25,338&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td 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size=2>&#160;</font></td><td width=75 height=16 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=13 align=left><font size=2>&#160;</font></td><td width=12 height=13 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=96 height=13 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=12 height=13 align=left><font size=2>&#160;</font></td><td width=82 height=13 align=left><font size=2>&#160;</font></td><td width=12 height=13 align=left><font size=2>&#160;</font></td><td width=75 height=13 align=left><font size=2>&#160;</font></td><td width=12 height=13 align=left><font size=2>&#160;</font></td><td width=75 height=13 align=left><font size=2>&#160;</font></td></tr><tr><td colspan=9 width=710 height=16 align=left><font size=2>Rental expense was $129.1 million, $146.9 million and $138.8 million in 2008, 2007 and 2006, respectively.</font></td></tr></table></DIV></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><div><font size=2><p>17. 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respectively. Customer loan receivables arise primarily from financing services offered to our customers for postage, supplies, and shipping payments. Customer loan receivables are generally due each month, however, customers may rollover outstanding balances. See discussion on Pitney Bowes Bank below. As part of our transition initiatives, we recorded a charge of $46.1 million in 2007 for the impairment of unguaranteed residual values which was included in the restructuring charges and asset impairments line of the Consolidated Statement of Income. 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size=2>&#160;</font></td><td width=61 height=17 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=17 align=le ft><font size=2>Pre-tax leveraged lease income </font></td><td width=12 height=17 align=left><font size=2><B>$</B></font></td><td width=82 height=17 align=right><font size=2><B> 316&#160;</B></font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=82 height=17 align=right><font size=2> 4,270&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=82 height=17 align=right><font size=2> 8,019&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=61 height=17 align=left><font size=2>&#160;</fo nt></td></tr><tr><td width=334 height=18 align=left><font size=2>Income tax effect </font></td><td width=12 height=18 align=left 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size=2><B>&#160;</B></font></td><td width=82 height=16 align=right style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2> 105,715&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=16 align=right style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2> 104,307&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;Total </font></td><td width=12 height=16 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=82 height=16 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 360,231&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=16 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size=2><B>&#160;</B></font></td><td colspan=2 width=94 height=16 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td><td width=12 height=16 align=center style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td colspan=2 width=94 height=16 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>2006&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;Capital expenditures:</font></td><td width=12 height=16 align=left style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 heig ht=16 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=16 align=left style="border-top: 2px 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size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;Total </font></td><td width=12 height=16 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=82 height=16 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font s ize=2><B> 3,997,531&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=82 height=16 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 4,335,651&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font 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size=2>&#160;</font></td><td width=12 height=17 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=17 align=right style="border-bottom: 2px solid #000000;"><font size=2> 11,978&#160;</font></td></tr><tr><td width=334 height=17 align=left><font size=2>&#160;Consolidated depreciation and amortization </font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 379,117&#160;</B></font></td><td width=12 height=17 alig n=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 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Fair Value of Financial Instruments<BR><BR>Effective January 1, 2008, we adopted SFAS 157 for financial assets and liabilities. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. SFAS 157 emphasizes that an entity&#8217;s valuation technique for measuring fair value should maximize observable inputs and minimize unobservable inputs. <BR><BR>Non-recurring nonfinancial assets and nonfinancial liabilities for which we have not applied the provisions of SFAS 157 include those measured at fair value in goodwill impairment testing, indefinite-lived intangible assets measured at fair value for impairment testing, and those non-recurring nonfina ncial assets and nonfinancial liabilities initially measured at fair value in a business combination. The new fair value definition and disclosure requirements for these specific nonfinancial assets and nonfinancial liabilities will be effective January 1, 2009.<BR><BR>SFAS 157 established a fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of the fair value hierarchy as defined by SFAS 157 are as follows:<BR><BR>Level 1 &#8211; Unadjusted quoted prices in active markets for identical assets and liabilities. Examples of Level 1 assets include money market securities and U.S. Treasury securities.<BR>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<BR>Level 2 &#8211; Observable inputs other than Level 1 inputs such as quoted prices for similar assets or liabilities; quoted prices in markets that trade infrequently; or other inputs that are observable or can be corroborated by observable ma rket data for substantially the full term of the assets or liabilities. Examples of Level 2 assets and liabilities include derivative contracts whose values are determined using a model with inputs that are observable in the market or can be derived from or corroborated by observable market data, mortgage-backed securities, asset backed securities, U.S. agency securities, and corporate notes and bonds. <BR><BR>Level 3 &#8211; Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability. These inputs may be derived with internally developed methodologies that result in management&#8217;s best estimate of fair value. During the twelve months ended December 31, 2008 we had no Level 3 recurring measurements. <BR><BR>The following table shows, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis at December 31, 2008. As required by SFAS 157, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect their placement within the fair value hierarchy levels.</font></div><DIV><table style="border-collapse: collapse; margin-top: 20px;"><tr><td width=250 height=18 align=left><font size=2><B>&#160;</B></font></td><td colspan=11 width=423 height=18 align=center style="border-bottom: 2px solid #000000;"><font size=2><B>Recurring Fair Value Measurements at December 31, 2008 by Level</B></font></td></tr><tr><td width=250 height=17 align=left><font size=2><B><i>&#160;</i></B></font></td><td colspan=2 width=94 height=17 align=center style="border-top: 2p x solid #000000;border-bottom: 2px solid #000000;"><font size=2><B>Level 1</B></font></td><td width=12 height=17 align=center style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td colspan=2 width=94 height=17 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font 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Money market funds are principally used for overnight deposits and are classified in Level 1 of the fair value hierarchy. <BR><BR>&#160;&#160;&#160;&#160;&#160;&#9679; U.S. Government Issued Debts: U.S. Governmental securities are valued using active, high volume trades for identical securities. Valuation adjustments are not applied so these securities are classified in Level 1 of the fair value hierarchy.<BR><BR>&#160;&#160;&#160;&#160;&#160;&#9679; U.S. Agency Issued Debt: U.S. Agency issued debt is based on active, high volume trades for identical or comparable securities. Non-callable agency issued debt securities are generally valued using quoted market prices. To the extent that the securities are actively traded, they are categorized in Level 1 of the fair value hierarchy. Callable agency issued debt securities are valued through benchmarking model derived prices to quoted market prices and trade data for identical or comparable securities. Callable agency issued debt securities are categorized in Level 2 of the fair value hierarchy. <BR><BR>&#160;&#160;&#160;&#160;&#160;&#9679; Corporate Notes and Bonds: The fair va lue of corporate securities is estimated using recently executed transactions, market price quotations where observable, or bond spreads. The spread data used are for the same maturity as the security. These securities are classified in Level 2 of the fair value hierarchy.<BR><BR>&#160;&#160;&#160;&#160;&#160;&#9679; Asset Backed Securities (&#8220;ABS&#8221;) and Mortgage-Backed Securities (&#8220;MBS&#8221;): These securities are generally valued based on external pricing indices. When external index pricing is not observable, ABS and MBS are valued based on external price/spread data. If neither pricing method is available, we then utilize broker quotes. At December 31, 2008, we had $6.4 million investments valued using non-binding broker quotes. We verify that the unadjusted indices or broker quotes are reasonable by comparing prices across multiple (three or more) dealers and we verify that current trades have occurred at these prices. When inp uts are observable and supported by an active market, asset backed securities and mortgage-backed securities are classified as Level 2 of the fair value hierarchy. <BR><BR>Investment securities are primarily composed of investments by PBB. Our investments are all classified as &#8220;available-for-sale securities&#8221;. PBB&#8217;s investments at December 31, 2008 were $196.9 million. We reported these investments in the Consolidated Balance Sheet as cash and cash equivalents of $125.8 million, short-term investments of $18.3 million and long-term investments of $52.8 million. <BR><BR>The fair value measurements of PBB&#8217;s investments are determined by third party service providers (Zions - Liquid Asset Management and Utendahl Capital Management). To validate the accuracy of the portfolio valuation, we utilize independent third parties to monthly price a minimum of 20% of the portfolio balance, ensuring our sample includes all types of securities held in the portfolio. We review the results of the pricing sample to ensure that the initial fair value valuations are accurate. If the pricing can not be validated reasonably (plus or minus 3% for each security and plus or minus 1% for the entire sample), we take action to investigate the differences. We have not adjusted the initial values as variances have been within these tolerance limits. Additionally, we ensure that the fair value measurements are in accordance with SFAS 157 and that we have properly classified our assets in the fair value hierarchy. <BR><BR>We have no investments either directly or indirectly in the sub-prime mortgage market. We have not experienced any write-offs in our investment portfolio. The majority of our mortgage-backed securities are either guaranteed or supported by the U.S. government. The recent market events have not caused our money market funds to experience declines in their net asset value below $1.00 dollar per share or to incur imposed limits on redemption s. <BR><BR>We have no investments in inactive markets which would warrant a possible change in our pricing methods or classification within the fair value hierarchy. Further, we have no investments in auction rate securities.<BR><BR>Derivatives <BR><BR>In the normal course of business, we are exposed to the impact of interest rate changes and foreign currency fluctuations. The company limits these risks by following established risk management policies and procedures, including the use of derivatives. We use derivatives to manage the related cost of debt and to limit the effects of foreign exchange rate fluctuations on financial results. We do not use derivatives for trading or speculative purposes. <BR><BR>As required by SFAS 157, we have incorporated counterparty risk into the fair value of our derivative assets and our credit risk into the value of our derivative liabilities. We derive credit risk from observable data related to credit default swaps. In light of the current market events, we have not seen a material change in the creditworthiness of those banks acting as derivative counterparties. <BR><BR>The valuation of our interest rate swaps is based on the income approach using a model with inputs that are observable or that can be derived from or corroborated by observable market data. Our foreign exchange derivatives are measured at fair value using observable market inputs, such as forward rates. <BR><BR>Interest Rate Swaps<BR><BR>Derivatives designated as fair value hedges include interest rate swaps related to fixed rate debt. Changes in the fair value of both the derivative and item being hedged are recognized in income. <BR><BR>In April 2003, we entered into an interest rate swap for an aggregate notional amount of $350 million. The interest rate swap effectively converted the fixed rate of 4.75% on $350 million of our notes, due 2018, into variable interest rates. The variable rates payabl e by us were based on six month LIBOR less a spread of 22.8 basis points. At December 31, 2007, the fair value of the derivative was an asset of $6.8 million and long-term debt was increased by the same amount. In November 2008, we unwound this interest rate swap. As a result of this transaction, we received a total payment of $44.2 million, including accrued interest. After adjusting for interest, we recorded $44.0 million as an increase in long-term debt to reflect the fair value hedge basis adjustment. The $44.0 million will be recognized as a reduction in interest expense over the remaining term of the notes and results in an effective interest rate of 3.2%. <BR><BR>In March 2008, we entered into two interest rate swaps for an aggregate notional amount of $250 million to effectively convert the fixed rate of 5.60% on $250 million of our notes, due 2018, into variable interest rates. The variable rates payable by us are based on six month LIBOR plus 111.5 basis points. At December 31, 2008, the fair value of the derivatives was an asset of $32.5 million. Long-term debt was increased by $32.5 million as of December 31, 2008. <BR><BR>Foreign Exchange Contracts<BR><BR>We enter into foreign exchange contracts to minimize the impact of exchange rate fluctuations on inter-company loans and related interest that are denominated in a foreign currency. The revaluation of the short-term inter-company loans and interest and the mark-to-market on the derivatives are both recorded to income. At December 31, 2008, we had 24 outstanding foreign exchange contracts to buy or sell various currencies with a net liability value of $0.1 million. The contracts will expire by April 29, 2009. At December 31, 2007, the asset value of these derivatives was $1.9 million. <BR><BR>We also enter into foreign currency exchange contracts arising from the anticipated purchase of inventory between affiliates. These contracts are designated as cash flow hedges. The effective por tion of the gain or loss on the cash flow hedges is included in other comprehensive income in the period that the change in fair value occurs and is reclassified to income in the same period that the hedged item is recorded in income. We had no outstanding contracts at December 31, 2008 and 2007.<BR><BR>Certain foreign currency derivatives have been entered into to manage foreign currency transactional exposures associated with the transactions between affiliates. These derivatives have no specific hedging designation so gains or losses are recorded in income in the period that changes in fair value occur together with the offsetting foreign exchange gains or losses on the underlying assets and liabilities. The fair value of these derivatives was a liability of $0.2 million and $1.9 million at December 31, 2008 and 2007, respectively. <BR><BR>Treasury Lock & Forward Starting Swap Agreements<BR><BR>We utilize forward starting swap agreements (forward swaps) in order to hedge the interest rate risk on the forecasted issuance of fixed-rate debt. These derivatives are treated as cash flow hedges, protecting against the risk of changes in future interest payments resulting from changes in LIBOR rates between the date of hedge inception and the date of the debt issuance. We consider counterparty credit risk in the hedge assessments and continue to expect the forward-starting swaps to be effective in protecting against the risk of changes in future interest payments. <BR><BR>Net Investment Hedges<BR><BR>A portion of our intercompany loans denominated in a foreign currency is designated as a hedge of net investment. The revaluation of these loans is reflected as a deferred translation gain or loss and thereby offsets a portion of the translation adjustment of the applicable foreign subsidiaries&#8217; net assets. At December 31, 2008, we had one intercompany loan with an outstanding value of $119.2 million designated as a net investment hedge. At December 31, 2007, we had two intercompany loans with an outstanding value of $126.4 million associated with net investment hedges. Net deferred translation gains of $41.7 million and $37.4 million for 2008 and 2007, respectively, were included in accumulated other comprehensive (loss) income in stockholders&#8217; (deficit) equity on the Consolidated Balance Sheets. <BR><BR>The estimated fair value of our financial instruments follows:<BR></font></div><DIV><table style="border-collapse: collapse; margin-top: 20px;"><tr><td width=215 height=18 align=left><font size=2><B>&#160;</B></font></td><td colspan=5 width=190 height=18 align=center style="border-bottom: 2px solid #000000;"><font size=2><B>December 31, 2008</B></font></td><td width=12 height=18 align=center><font size=2><B>&#160;</B></font></td><td colspan=5 width=190 height=18 a lign=center style="border-bottom: 2px solid #000000;"><font size=2>December 31, 2007</font></td></tr><tr><td width=215 height=34 align=left><font size=2>&#160;</font></td><td colspan=2 width=84 height=34 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid 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size=2><B>$</B></font></td><td width=72 height=17 align=right style="border-top: 2px solid #000000;"><font size=2><B> 251,298&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2><B> $</B></font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;"><font size=2><B> 252,776&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>$</font></td><td width=72 height=17 align=right style="border-top: 2px solid #000000;"><font size=2> 200,006&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left style="border-top: 2px solid #000000;"><font size=2>$</font></td><td width=82 height=17 align=right style="border-top: 2px solid #000000;"><font size=2> 200,005&#160;</font></td></tr><tr><td width=215 height=17 align=left><font size=2>Loans receivab le </font></td><td width=12 height=17 align=left><font size=2><B>$</B></font></td><td width=72 height=17 align=right><font size=2><B> 528,800&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>$</B></font></td><td width=82 height=17 align=right><font size=2><B> 528,800&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=72 height=17 align=right><font size=2> 554,370&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><f ont size=2>$</font></td><td width=82 height=17 align=right><font size=2> 554,370&#160;</font></td></tr><tr><td width=215 height=17 align=left><font size=2>Long-term debt </font></td><td width=12 height=17 align=left><font size=2><B>$</B></font></td><td width=72 height=17 align=right><font size=2><B> (3,990,134)</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>$</B></font></td><td width=82 height=17 align=right><font size=2><B> (3,880,418)</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=72 he ight=17 align=right><font size=2> (3,848,359)</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=82 height=17 align=right><font size=2> (3,722,209)</font></td></tr><tr><td width=215 height=17 align=left><font size=2>Derivatives, net </font></td><td width=12 height=17 align=left><font size=2><B>$</B></font></td><td width=72 height=17 align=right><font size=2><B> 874&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2><B>$</B></font></td><td width=82 height=17 align=right><font size=2><B> 874&#160;</B></font></td&g t;<td width=12 height=17 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=72 height=17 align=right><font size=2> 7,623&#160;</font></td><td width=12 height=17 align=left><font size=2>&#160;</font></td><td width=12 height=17 align=left><font size=2>$</font></td><td width=82 height=17 align=right><font size=2> 7,623&#160;</font></td></tr></table></DIV><div><font size=2><p>(1) Carrying value includes accrued interest and deferred fee income, where applicable.<BR><BR>The fair value of long-term debt is estimated based on quoted dealer prices for the same or similar issues. The carrying value for cash, cash equivalents, accounts receivable, loans receivable, accounts payable and notes payable approximate fair value because of t he short maturity of these instruments. <BR></font></div></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><DIV><table style="border-collapse: collapse; margin-top: 20px;"><tr><td width=334 height=20 align=left><font size=2><B><i>20. 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width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=82 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=66 height=11 align=left><font size=2>&#160;</font></td></tr><tr><td colspan=10 width=713 height=31 align=left><font size=2>A reconciliation of the basic and diluted earnings per share computations for income from continuing operations for the years ended December 31, 2008, 2007 and 2006 is as follows:</font></td></tr><tr><td width=334 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=82 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=89 height=11 align=left><font size=2>&#160; </font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=82 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=66 height=11 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;</font></td><td colspan=7 width=301 height=16 align=center style="border-bottom: 2px solid #000000;"><font size=2><B>2008&#160;</B></font></td><td width=12 height=16 align=center><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=center><font size=2><B>&#160;</B></font></td></tr><tr> ;<td width=334 height=16 align=left><font size=2>&#160;</font></td><td colspan=2 width=94 height=16 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2><B>Income</B></font></td><td width=12 height=16 align=center style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=89 height=16 align=center 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#000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=16 align =left style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=16 align=right style="border-top: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=right><font size=2><B>&#160;</B></font></td></tr><tr><td width=334 height=16 align=left><font size=2>Less:</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=89 height=16 align=right><font size=2><B>&#160;</B></fon t></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=right><font size=2><B>&#160;</B></font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;&#160;Preferred stock dividends </font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2> -&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td widt h=89 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=right><font size=2><B>&#160;</B></font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;&#160;Preference stock dividends </font></td><td width=12 height=16 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=16 align=right style="border-bottom: 2px solid # 000000;"><font size=2><B> (77)</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=89 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=right><font size=2><B>&#160;</B></font></td></tr><tr><td width=334 height=16 align=left><font size=2>Basic earnings per share </font></td><td width=12 height=16 align=left style="border-top: 2px solid #000000;border-bottom: 3px double 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size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=right><font size=2><B>&#160;</B></font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;&#160;Preferred stock </font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2> -&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=89 height=16 align=right><font size=2><B> 3,272&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 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align=right><font size=2> -&#160;</font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=89 height=16 align=right><font size=2><B> 567,305&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=right><font size=2><B >&#160;</B></font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;&#160;Other </font></td><td width=12 height=16 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=16 align=right style="border-bottom: 2px solid #000000;"><font size=2> -&#160;</font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=89 height=16 align=right style="border-bottom: 2px 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align=left><font size=2>&#160;</font></td><td width=12 height=13 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=82 height=13 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=12 height=13 align=left><font size=2>&#160;</font></td><td width=66 height=13 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>Basic earnings per share of common stock:</font></td><td width=12 height=16 align=left><fon t size=2>&#160;</font></td><td width=82 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=89 height=16 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td colspan=2 width=94 height=16 align=center><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=center><font size=2><B>&#160;</B></font></td><td 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size=2><B>&#160;</B></font></td><td width=66 height=16 align=right><font size=2><B>&#160;</B></font></td></tr><tr><td colspan=5 width=529 height=16 align=left><font size=2>&#160;&#160;Net income </font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=82 height=16 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 2.01&#160;</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=right> <font size=2><B>&#160;</B></font></td></tr><tr><td width=334 height=13 align=left><font size=2>&#160;</font></td><td width=12 height=13 align=left><font size=2>&#160;</font></td><td width=82 height=13 align=left><font size=2>&#160;</font></td><td width=12 height=13 align=left><font size=2>&#160;</font></td><td width=89 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size=2><B>&#160;</B></font></td><td width=82 height=16 align=left><font size=2><B>&#160;< ;/B></font></td><td width=12 height=16 align=center><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=center><font size=2><B>&#160;</B></font></td></tr><tr><td colspan=5 width=529 height=16 align=left><font size=2>&#160;&#160;Continuing operations </font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2><B>$</B></font></td><td width=82 height=16 align=right><font size=2><B> 2.13&#160;</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=right><font size=2><B>&#160;</B></font></td></tr><tr><td colspan=5 width=529 height=16 align=le ft><font size=2>&#160;&#160;Discontinued operations </font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left style="border-bottom: 2px solid #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=16 align=right style="border-bottom: 2px solid #000000;"><font size=2><B> (0.13)</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=right><font size=2><B>&#160;</B></font></td></tr><tr><td colspan=5 width=529 height=16 align=left><font size=2>&#160;&#160;Net income </font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=82 height=16 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 2.00&#160;</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=right><font size=2><B>&#160;</B></font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=89 height=16 align=left><font size=2>&#160;</font></td><td wi dth=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=82 height=16 align=right style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=16 align=right><font size=2><B>&#160;</B></font></td><td width=66 height=16 align=right><font size=2><B>&#160;</B></font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;</font></td><td colspan=7 width=301 height=16 align=center style="border-bottom: 2px solid #000000;"><font size=2>2007&#160;</font></td><td width=12 height=16 align=center><font size=2>&#160;</font></td><td width=66 height=16 align=center><font size=2>& ;#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;</font></td><td colspan=2 width=94 height=16 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>Income</font></td><td width=12 height=16 align=center style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td width=89 height=16 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>Shares</font></td><td width=12 height=16 align=center style="border-top: 2px solid #000000;"><font size=2>&#160;</font></td><td colspan=2 width=94 height=16 align=center style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;"><font size=2>Per Share</font></td><td width=12 height=16 align=center><font size=2>&#160;</font></td>< ;td width=66 height=16 align=center><font size=2>&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>Income from continuing operations </font></td><td width=12 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height=16 align=left><font size=2>&#160;</font></td><td width=89 height=16 align=right><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2>&#160;</font></td><td width=12 height=16 align=right><font size=2>&#160;</font></td><td width=66 height=16 align=right><font size=2>&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;&#160;Preferred stock dividends </font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2> -&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=89 height=16 align=right><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font 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stock </font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2> 81&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=89 height=16 align=right><font size=2> 637,877&#160;</font></td><td width=12 height=16 align=left><font size=2> &#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2>&#160;</font></td><td width=12 height=16 align=right><font size=2>&#160;</font></td><td width=66 height=16 align=right><font size=2>&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;&#160;Stock options </font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2> -&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=89 height=16 align=right><font size=2> 1,971,010&#160;</font></td><td 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size=2>&#160;</font></td><td width=12 height=16 align=right><font size=2>&#160;</font></td><td width=66 height=16 align=right><font size=2>&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>Diluted earnings per share </font></td><td width=12 height=16 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=82 height=16 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 361,247&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td>& lt;td width=89 height=16 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2> 221,219,746&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left style="border-bottom: 3px double #000000;"><font size=2>$</font></td><td width=82 height=16 align=right style="border-bottom: 3px double 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align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2> -&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=89 height=16 align=right><font size=2> 2,093,517&#160;</font></td><td width=12 height=16 align=left>< font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=right><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=66 height=16 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>&#160;&#160;Other </font></td><td width=12 height=16 align=left style="border-bottom: 2px solid #000000;"><font size=2>&#160;</font></td><td width=82 height=16 align=right style="border-bottom: 2px solid #000000;"><font size=2> -&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=89 height=16 align=right 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style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=82 height=13 align=left style="border-top: 3px double #000000;"><font size=2>&#160;</font></td><td width=12 height=13 align=left><font size=2>&#160;</font></td><td width=66 height=13 align=left><font size=2>&#160;</font></td></tr><tr><td width=334 height=16 align=left><font size=2>Basic earnings per share of common stock:< ;/font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=89 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=left><font size=2>&#160;</font></td><td width=82 height=16 align=left><font size=2>&#160;</font></td><td width=12 height=16 align=center><font size=2>&#160;</font></td><td width=66 height=16 align=center><font 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size=2><B>&#160;</B></font></td></tr><tr><td width=201 height=11 align=left><font size=2>&#160;&#160;&#160;&#160;asset impairments </font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=right><font size=2><B> 17,093&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=86 height=11 align=right><font size=2><B> 18,815&#160;</B></font></td><td width=12 height=11 align=left><font size=2> <B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=right><font size=2><B> 49,229&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=11 align=right><font size=2><B> 115,117&#160;</B></font></td><td width=12 height=11 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size=2><B>&#160;</B></font></td><td width=82 height=11 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=right><font size=2><B>&#160;</B></font></td></tr><tr><td width=201 height=11 align=left><font size=2>&#160;&#160;&#160;&#160;operations </font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=right><font size=2><B> 122,935&#160;</B></font></td><t d width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=86 height=11 align=right><font size=2><B> 131,340&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=right><font size=2><B> 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size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=11 align=right><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=right><font size=2><B>&#160;</B></font></t d></tr><tr><td width=201 height=11 align=left><font size=2>&#160;&#160;&#160;&#160;operations </font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=right><font size=2><B> (3,832)</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=86 height=11 align=right><font size=2><B> (2,831)</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=right><font size=2><B> (2,063)< ;/B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=82 height=11 align=right><font size=2><B> (18,974)</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=right><font size=2><B> (27,700)</B></font></td></tr><tr><td width=201 height=11 align=left><font size=2>Net income</font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=right><font size=2><B> 119,103&#160;</B 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size=2><B>$</B></font></td><td width=75 height=11 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 0.56&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td widt h=12 height=11 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=86 height=11 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 0.62&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B>$</B></font></td><td width=75 height=11 align=right style="border-top: 2px solid #000000;border-bottom: 3px double #000000;"><font size=2><B> 0.47&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 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size=2><B>&#160;</B></font></td><td width=12 height=11 align=left style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=86 height=11 align=left style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=75 height=11 align=left style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=82 height=11 align=left style="border-top: 3px double #000000;"><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left><font size=2><B>&#160;</B></font></td><td width=12 height=11 align=left style="border-top: 3px double #000000;"><font 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size=2>&#160;</font></td><td width=86 height=11 align=right><font size=2>-</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=75 height=11 align=right><font size=2> 4,300&#160;</font></td>& lt;td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=82 height=11 align=right><font size=2> 259,713&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=75 height=11 align=right><font size=2> 264,013&#160;</font></td></tr><tr><td width=201 height=11 align=left><font size=2>Income (loss) from continuing</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=75 height=11 align=right><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=le ft><font size=2>&#160;</font></td><td width=86 height=11 align=right><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=75 height=11 align=right><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=82 height=11 align=right><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=75 height=11 align=right><font size=2>&#160;</font></td></tr><tr><td wi dth=201 height=11 align=left><font size=2>&#160;&#160;&#160;&#160;operations </font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=75 height=11 align=right><font size=2> 146,584&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=86 height=11 align=right><font size=2> 153,581&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=75 height=11 align=right><font size=2> 129,240&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=l eft><font size=2>&#160;</font></td><td width=82 height=11 align=right><font size=2> (68,158)</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=75 height=11 align=right><font size=2> 361,247&#160;</font></td></tr><tr><td width=201 height=11 align=left><font size=2>(Loss) income from discontinued</font></td><td width=12 height=11 align=left><font size=2>&#160;</font></td><td width=75 height=11 align=right><font 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We repurchased 9.2 million, 9.1 million and 9.2 million shares in 2008, 2007 and 2006, respectively. The sum of earnings per share amounts may not equal the totals above due to rounding. 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income Interest income [N] Other non-current liabilities Non-current income taxes Deferred taxes on income ASSETS Net income (loss) Finance receivables Long-term finance receivables Treasury stock, at cost Treasury stock, at cost [N] Amortization of pension and postretirement costs Net income Preferred stock par value Common stock, shares issued Common stock, shares issued, total Other assets Basic earnings per share of common stock: Diluted earnings per share of common stock: Income from continuing operations before income taxes and minority interest Common stock, par value Treasury stock, shares Foreign currency translations Total stockholders' (deficit) equity Stockholders' equity, ending balance Stockholders' equity Stockholders' equity, ending balance Provision for income taxes Provision for income taxes, total Cumulative preferred stock Comprehensive income, net of tax [Abstract] Additional paid-in capital [Member] Retained earnings [Member] Accumulated other comprehensive (loss) income [Member] Restructuring charges and asset impairments Conversions to common stock FIN 48 uncertainties and other income tax liabilities Adjustment to initially apply SFAS 158, net of tax Initial adjustment for FIN 48 Comprehensive (loss) income [Member] Software Repurchase of common stock Commitments and contingencies (see Note 15) Net investment in external financing Net investment in external financing [N] Cost of software Common Preferred Adjustments to additional paid in capital, tax effect from share-based compensation Allowance for credit losses, current The balance in this account represents a reserve for uncollectible amounts established to provide for all reasonably anticipated losses inherent in the current finance receivable balance. Receivables determined to be uncollectible should be charged to the allowance account. Company policy is to discontinue income recognition for finance receivables contractually past due for 120 days. Allowance for credit losses, current [N] Finance receivables, gross, current Finance receivables are receivables from individuals, corporations or governments arising from financing transactions executed by the finance operations. Finance receivables include: gross finance receivables, residual valuation, allowance for credit losses, unearned income, deferred sales assistance fees ("SAF") expense and deferred set-up expense. Finance receivables contractually due within 12 months are classified as current. Other current assets and prepayments This account includes payments made in advance for insurance, rent, postage, advertising, real estate and personal property taxes, freight and related items. This account also includes clearing accounts used to facilitate payroll, lease repurchases, life insurance, health and dental insurance. Rental property and equipment, net Records the standard cost of equipment on rental, including postage meters, scales, mailing machines, copiers, facsimile equipment, voice processing systems, merchandise identification equipment, and other machines on rental, net of accumulated depreciation. This account also includes (1) the standard cost of work in process and commercial and manufactured finished parts, identified with the production of meters as well as other equipment manufactured solely for rental purposes, net of accumulated depreciation; and (2) the variances as they are deferred to rental equipment in process and will be relieved as the amounts are amortized to cost of rentals. Allowance for credit losses, noncurrent The balance in this account represents a reserve for uncollectible amounts established to provide for all reasonably anticipated losses inherent in the long-term finance receivable balance. Receivables determined uncollectible should be charged to the allowance account. Allowance for credit losses, noncurrent [N] Finance receivables, gross, noncurrent Long-term finance receivables are receivables from individuals, corporations or governments arising from financing transactions executed by the finance operations. Finance receivables include gross finance receivables, residual valuation, allowance for credit losses, unearned income, deferred SAF expense and deferred setup expenses. Finance receivables contractually due after one year are classified as long-term. Cumulative preference stock Represents the stated value of $2.12 convertible preference stock outstanding. Increase (decrease) in current and non-current income taxes The net amount of Current and Non current deferred taxes on income and income taxes payable. Equipment sales Represents net sales of equipment, parts, supplies and software to customers, as well as distributors and dealers throughout the world. Patent, license and royalty income for core business activities are recorded in this category. Also included are related discounts and trade-in allowances and sales to the company's consolidated finance operations. Supplies Represents net revenue from sale of parts and supplies. Preference Represents current year dividends declared to Pitney Bowes Inc. shareholders on the $2.12 preference stock. Preference stock [Member] Represents the stated value of $2.12 convertible preference stock outstanding. Pre-tax stock-based compensation Represents the pre-tax stock-based compensation. Adjustment to initially apply SAB 108, net of tax Represents the adjustment to initially apply SAB 108, net of tax. Cost of equipment sales Includes only the standard or, for companies not using a standard cost system, actual cost of equipments sold. Cost of supplies Includes all costs associated with the sale of parts and supplies Preference stock par value Face amount or stated value per share of nonredeemable preference stock (or preference stock redeemable solely at the option of the issuer); generally not indicative of the fair market value per share. Preference stock conversion dollar value Dividend payment percentage rate or fixed dollar amount per share, such as three percent or $2.67 per share. Non-cash expense from FSC tax law change Represents the non-cash tax expense resulted from a tax law change for discontinued operation. Non-cash tax expense related to IRS settlement and sale of a business Represents the non-cash tax expense related to IRS settlement and sale of a business. Tax and bond payments related to IRS settlement and sale of a business Represents the tax and bond payments related to IRS settlement and sale of a business. Notes to consolidated financial statements Net loss on sale of businesses, net of tax The (gain) loss on disposal of a component of the entity, net of income tax, included in net income from discontinued operations. Other Current Assets And Pre-payments Disclosure [TextBlock] Describes Pitney Bowes' accounting policy for other current assets and prepayments. It includes primarily postage meter receivables billed in advance and costs paid in advance. Business Combinations Disclosure [Text Block] Describes the entity's accounting policies for business combinations and other business acquisition transactions accounted for usingthe purchase method, such as an exchange of shares between entities under common control. This accounting policy also may address how an entity assesses and measures impairment of goodwill and intangible assets. Current Liabilities Disclosure [Text Block] Description and amounts of accounts payable, accrued liabilities, notes payable and current portion of long-term obligations at the end of the reporting period. This element may be used as a single block of text to encapsulate the entire disclosure for other liabilities including data and tables. Finance Assets [Text Block] Disclosure of finance assets consisting of (1) total finance receivables from sales-type leases and customer loan receivables; (2) amounts of lessor's leasing arrangements, including capital and leveraged leases; and (3) financial assets from a revolving credit solution and financial liabilities for a deposit solution for prepayment, both for product purchase. Investment in leveraged leases Rentals receivable and estimated residual value of leased assets less principal and interest on nonrecourse debt and unearned income. Adjustments to reconcile net income to net cash provided by (used in) operating activities: This element may be used to capture the complete disclosure pertaining to an entity's earnings per share. Earnings Per Share [Text Block] Cash dividends: Stock Plans [Text Block] Disclosure of compensation-related costs for share-based compensation which may include disclosure of policies, compensation plan details, allocation of stock compensation, incentive distributions, share-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. Loss on redemption of preferred stock issued by a subsidiary Loss on redemption of the outstanding cumulative preferred stock issued previously by a subsidiary company. Deferred tax adjustment (see Note 9) Adjustment to establish the deferred tax asset related to the acceleration of rental income for tax purposes which was not properly captured in prior years. EX-100.DEF 7 pbi-20081231_def.xml XBRL TAXONOMY DEFINITION LINKBASE DOCUMENT -----END PRIVACY-ENHANCED MESSAGE-----