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PITNEY BOWES INC.
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<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>1. Basis of Presentation <BR/><BR/>The terms “we”, “us”, and “our” are used in this report to refer collectively to Pitney Bowes Inc. and its subsidiaries.<BR/><BR/>The accompanying unaudited Condensed Consolidated Financial Statements of Pitney Bowes Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In addition, the December 31, 2008 condensed consolidated balance sheet data was derived from audited financial statements, which were revised in the current period to reflect presentation changes for the adoption of FASB Statement of Financial Accounting Standards (“SFAS”) No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51, but does not include all disclosures required by accounting principles generally accepted in the United States of America. In our opinion, all adjustments (consisting of only normal recurring adjustments) considered necessary to present fairly our financial position at June 30, 2009 and December 31, 2008, our results of operations for the three and six months ended June 30, 2009 and 2008 and our cash flows for the three and six months ended June 30, 2009 and 2008 have been included. Operating results for the three and six months ended June 30, 2009 are not necessarily indicative of the results that may be expected for any other interim period or the year ending December 31, 2009. <BR/><BR/>These statements should be read in conjunction with the financial statements and notes thereto included in our 2008 Annual Report to Stockholders on Form 10-K. <BR/><BR/>Certain prior year amounts have been reclassified to conform with the current period presentation. In the second quarter of 2009, we have separately presented a financing interest expense line item, which represents our cost of borrowing associated with the generation of financing revenues, in the Condensed Consolidated Statements of Income. In computing our financing interest expense, we assumed a 10:1 leveraging ratio of debt to equity and applied our overall effective interest rate to the average outstanding finance receivables.<BR/><BR/>In accordance with SFAS No. 165, Subsequent Events, we have evaluated subsequent events through August 5, 2009, the date of issuance of the unaudited condensed consolidated financial statements. During this period we did not have any material recognizable subsequent events. We did, however, have non-recognizable subsequent events by entering into three interest rate swaps for a combined notional amount of $300 million in July 2009. See Note 11 to the Condensed Consolidated Financial Statements for additional discussion on the interest rate swaps.</P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>2. Nature of Operations<BR/><BR/>We are a provider of leading-edge, global, integrated mail and document management solutions for organizations of all sizes. We operate in two business groups: Mailstream Solutions and Mailstream Services. Mailstream Solutions includes worldwide revenue and related expenses from the sale, rental, and financing of mail finishing, mail creation, shipping equipment and software; production mail equipment; supplies; mailing support and other professional services; payment solutions; and mailing, customer communication and location intelligence software. Mailstream Services includes worldwide revenue and related expenses from facilities management services; secure mail services; reprographics, document management, and other value-added services for targeted customer markets; mail services operations, which include presort mail services and international mail services; and marketing services. See Note 7 to the Condensed Consolidated Financial Statements for details of our reporting segments and a description of their activities.</P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>3. Recent Accounting Pronouncements<BR/><BR/>In September 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements (“SFAS 157”), to define how the fair value 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, to clarify the application of SFAS 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. This FSP was effective immediately. In April 2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, to provide additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. This FSP is effective for interim and annual reporting periods ending after June 15, 2009. We adopted SFAS 157 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 adopted SFAS 157 for nonfinancial items on January 1, 2009, and the adoption did not 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 issuances of FSP 157-3 and FSP 157-4. See Note 17 to the Condensed Consolidated Financial Statements for additional discussion on fair value measurements.<BR/><BR/>In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”). 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 nature 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) was effective for fiscal years beginning on or after December 15, 2008 and is applied prospectively. The adoption of this Statement has not had a material impact on our financial position, results of operations, or cash flows for the six months ended June 30, 2009.<BR/><BR/>In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (“SFAS 160”). 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 financial statements that identify and distinguish between the interests of the parent’s owners and of the noncontrolling owners of a subsidiary. 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 adopted the presentation and disclosure requirements of SFAS 160 on a retrospective basis beginning in the first quarter of 2009.<BR/><BR/>In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”). 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’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 requires us to present currently disclosed information in a tabular format and also expands our disclosures concerning where derivatives are reported on the balance sheet and where gains/losses are recognized in the results of operations. The Company has complied with the disclosure requirements of this Statement beginning in the first quarter of 2009. See Note 17 to the Condensed Consolidated Financial Statements for the additional disclosures.<BR/><BR/>In December 2008, the FASB issued FSP FAS 132(R)-1, Employers’ Disclosures about Postretirement Benefit Plan Assets, which amends Statement No. 132(R) to require more detailed disclosures about employer’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.<BR/><BR/>In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This FSP amends FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. This FSP is effective for interim reporting periods ending after June 15, 2009. The Company has complied with the additional disclosure requirements beginning in the second quarter of 2009. See Note 17 to the Condensed Consolidated Financial Statements for additional discussion on fair value measurements.<BR/><BR/>In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. This FSP amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The FSP does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The FSP is effective for interim and annual reporting periods ending after June 15, 2009. The Company currently does not have any financial assets that are other-than-temporary impaired.<BR/><BR/>In April 2009, the FASB issued FSP No. FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, to address some of the application issues under SFAS 141(R). The FSP deals with the initial recognition and measurement of an asset acquired or a liability assumed in a business combination that arises from a contingency provided the asset or liability’s fair value on the date of acquisition can be determined. When the fair value can’t be determined, the FSP requires using the guidance under SFAS No. 5, Accounting for Contingencies, and FASB Interpretation (FIN) No. 14, Reasonable Estimation of the Amount of a Loss. This FSP is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after January 1, 2009. The adoption of this FSP has not had a material impact on our financial position, results of operations, or cash flows for the six months ended June 30, 2009.<BR/><BR/>In May 2009, the FASB issued SFAS No. 165, Subsequent Events. SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Although there is new terminology, the standard is based on the same principles as those that currently exist in the auditing standards. The standard also includes a required disclosure of the date through which the entity has evaluated subsequent events and whether the evaluation date is the date of issuance or the date the financial statements were available to be issued. The standard is effective for interim or annual periods ending after June 15, 2009. The Company has complied with the disclosure requirements.<BR/><BR/>In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162. The FASB Accounting Standards Codification (Codification) will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. This Statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company will comply with the requirements of the Statement beginning in the third quarter of 2009.</P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>4. Discontinued Operations<BR/><BR/>The following table shows selected financial information included in discontinued operations for the three and six months ended June 30, 2009 and 2008, respectively:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Three Months Ended June 30,</B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="5" width="196" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Six Months Ended June 30,</B></FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"><B>Discontinued Operations </B></FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">Pre-tax income</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 10,851 </B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2">- </FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="center" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 20,624 </B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="center" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2">- </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">Tax provision</FONT></TD><TD width="12" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> (5,749)</B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (2,831)</FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> (12,899)</B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (6,663)</FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">Gain (loss) from discontinued operations, net of tax </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 5,102 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> (2,831)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 7,725 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> (6,663)</FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>For the three months ended June 30, 2009, $10.9 million of pre-tax income, net of $4.2 million in tax, represents the release of reserves related to the expiration of an indemnity agreement in April 2009 associated with the sale of our Capital Services portfolio in 2006. This income was partially offset by the accrual of interest on uncertain tax positions. The net loss for the three months ended June 30, 2008 relates to the accrual of interest on uncertain tax positions. <BR/><BR/>Pre-tax income for the six months ended June 30, 2009 includes the indemnity settlement as discussed and $9.8 million of pre-tax income, net of $3.8 million in tax, for a bankruptcy settlement received during the first quarter of 2009 pertaining to the leasing of certain aircraft from our former Capital Services business which was sold in 2006. This income was partly offset by the accrual of interest on uncertain tax positions. The net loss for the six months ended June 30, 2008 relates to the accrual of interest on uncertain tax positions. <BR/></P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>5. Acquisitions<BR/><BR/>On April 21, 2008, we acquired Zipsort, Inc. for $40 million in cash, net of cash acquired. Zipsort, Inc. acts as an intermediary between customers and the U.S. Postal Service. Zipsort, Inc. offers mailing services that include presorting of first class, standard class, flats, permit and international mail as well as metering services. We assigned the goodwill to the Mail Services segment. <BR/><BR/>The following table summarizes selected financial data for the opening balance sheet of the Zipsort, Inc. acquisition in 2008: </P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="390" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="108" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="108" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Zipsort, Inc.</FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"><B>Purchase price allocation:</B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="center" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Current assets </FONT></TD><TD width="12" height="16" align="left"><FONT size="2">$</FONT></TD><TD width="96" height="16" align="right"><FONT size="2"> 708 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Other non-current assets </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right"><FONT size="2"> 11,707 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Intangible assets </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right"><FONT size="2"> 7,942 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Goodwill </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right"><FONT size="2"> 25,294 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Current liabilities </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right"><FONT size="2"> (2,975)</FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Non-current liabilities </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (2,885)</FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> Purchase price, net of cash acquired </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 39,791 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"><B>Intangible assets: </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Customer relationships </FONT></TD><TD width="12" height="16" align="left"><FONT size="2">$</FONT></TD><TD width="96" height="16" align="right"><FONT size="2"> 7,658 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Non-compete agreements </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 284 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> Total intangible assets </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 7,942 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"><B>Intangible assets amortization period:</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Customer relationships </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right"><FONT size="2">15 years</FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Non-compete agreements</FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2">4 years</FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> Total weighted average </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">15 years</FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>There were no acquisitions during the six months ended June 30, 2009. <BR/><BR/>During the six months ended June 30, 2008, we also completed four smaller acquisitions with an aggregate cost of $29.2 million. These acquisitions did not have a material impact on our financial results. <BR/><BR/>No tax deductible goodwill was added during the six months ended June 30, 2009. The amount of tax deductible goodwill added from acquisitions for the six months ended June 30, 2008 was $27.4 million. <BR/><BR/>Consolidated impact of acquisitions<BR/><BR/>The Condensed Consolidated Financial Statements include the results of operations of the acquired businesses from their respective dates of acquisition. These acquisitions increased our revenue and earnings but, including related financing costs, did not materially impact earnings either on an aggregate or per share basis.<BR/><BR/>The following table provides unaudited pro forma consolidated revenue for the three and six months ended June 30, 2009 and 2008 as if our acquisitions had been acquired on January 1 of each year:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Three Months Ended June 30,</B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="5" width="196" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Six Months Ended June 30,</B></FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="center" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD><TD width="12" height="16" align="center"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="center" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">Total revenue </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 1,378,462 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 1,589,843 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 2,758,046 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 3,164,070 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>The pro forma earnings results of these acquisitions were not material to net income or earnings per share. The pro forma consolidated results do not purport to be indicative of actual results that would have occurred had the acquisitions been completed on January 1, 2009 and 2008, nor do they purport to be indicative of the results that will be obtained in the future.</P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>6. Earnings per Share<BR/><BR/>A reconciliation of the basic and diluted earnings per share computations for the three months ended June 30, 2009 and 2008 is as follows:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="164" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="8" width="252" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="8" width="252" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="82" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Income</B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="82" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Weighted Average Shares</B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="64" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Per
Share</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="82" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Income</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD colspan="2" width="82" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Weighted Average Shares</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD colspan="2" width="64" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Per
Share</FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Pitney Bowes Inc. net
income</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 117,262 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 128,509 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Less:</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">  Preferred stock dividends</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2">- </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD colspan="2" width="176" height="16" align="left"><FONT size="2">  Preference stock dividends</FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> (19)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (19)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Basic earnings per share</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 117,243 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"><B> 206,539 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"><B> 0.57 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 128,490 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"> 208,050 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"> 0.62 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD colspan="2" width="176" height="16" align="left"><FONT size="2">Effect of dilutive securities:</FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="34" align="left"><FONT size="2">  Data for basic earnings
per share</FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="70" height="34" align="right"><FONT size="2"><B> 117,243 </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="34" align="right"><FONT size="2"><B> 206,539 </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="34" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2">$</FONT></TD><TD width="70" height="34" align="right"><FONT size="2"> 128,490 </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="34" align="right"><FONT size="2"> 208,050 </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="34" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">  Preferred stock</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> 3 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2">- </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> 3 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">  Preference stock</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> 19 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> 594 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> 19 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> 601 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="34" align="left"><FONT size="2">  Stock options and stock
purchase plans</FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="34" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="34" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="34" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="34" align="right"><FONT size="2">- </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="34" align="right"><FONT size="2"> 819 </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="34" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">  Other stock plans</FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 2 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2">- </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 70 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Diluted earnings per share</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 117,262 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 207,138 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"><B> 0.57 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 128,509 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 209,543 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"> 0.61 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD colspan="6" width="340" height="17" align="left"><FONT size="2">Basic earnings per share of common stock attributable to
Pitney Bowes Inc. common stockholders:</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="64" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Per
Share</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="17" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="64" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">Per
Share</FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Continuing operations</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 0.54 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 0.63 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Discontinued operations</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 0.02 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (0.01)</FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Net income</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 0.57 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 0.62 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD colspan="6" width="340" height="16" align="left"><FONT size="2">Diluted earnings per share of common stock attributable to
Pitney Bowes Inc. common stockholders:</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="64" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Per
Share</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="64" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">Per
Share</FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Continuing operations</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 0.54 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 0.63 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Discontinued operations</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 0.02 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (0.01)</FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Net income</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 0.57 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 0.61 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>Note: The sum of the earnings per share amounts may not equal the totals above due to rounding. </P></FONT></DIV><DIV><FONT size="2"><P>A reconciliation of the basic and diluted earnings per share computations for the six months ended June 30, 2009 and 2008 is as follows:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="164" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="8" width="252" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="8" width="252" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="82" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Income</B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="82" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Weighted Average Shares</B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="64" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Per
Share</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="82" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Income</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD colspan="2" width="82" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Weighted Average Shares</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD colspan="2" width="64" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Per
Share</FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Pitney Bowes Inc. net
income</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 221,664 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 247,612 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Less:</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">  Preferred stock dividends</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2">- </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD colspan="2" width="176" height="16" align="left"><FONT size="2">  Preference stock dividends</FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> (38)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (39)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Basic earnings per share</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 221,626 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"><B> 206,400 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"><B> 1.07 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 247,573 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"> 209,942 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"> 1.18 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD colspan="2" width="176" height="16" align="left"><FONT size="2">Effect of dilutive securities:</FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="34" align="left"><FONT size="2">  Data for basic earnings
per share</FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="70" height="34" align="right"><FONT size="2"><B> 221,626 </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="34" align="right"><FONT size="2"><B> 206,400 </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="34" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2">$</FONT></TD><TD width="70" height="34" align="right"><FONT size="2"> 247,573 </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="34" align="right"><FONT size="2"> 209,942 </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="34" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">  Preferred stock</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> 3 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2">- </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> 3 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">  Preference stock</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> 38 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> 595 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> 39 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> 604 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="34" align="left"><FONT size="2">  Stock options and stock
purchase plans</FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="34" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="34" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="34" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="34" align="right"><FONT size="2">- </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="34" align="right"><FONT size="2"> 855 </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="34" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">  Other stock plans</FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 4 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2">- </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 77 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Diluted earnings per share</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 221,664 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 207,002 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"><B> 1.07 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 247,612 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 211,481 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"> 1.17 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD colspan="6" width="340" height="17" align="left"><FONT size="2">Basic earnings per share of common stock attributable to
Pitney Bowes Inc. common stockholders:</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="64" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Per
Share</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="17" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="64" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">Per
Share</FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Continuing operations</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 1.04 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 1.21 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Discontinued operations</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 0.04 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (0.03)</FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Net income</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 1.07 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 1.18 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD colspan="6" width="340" height="16" align="left"><FONT size="2">Diluted earnings per share of common stock attributable to
Pitney Bowes Inc. common stockholders:</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="64" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Per
Share</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="64" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">Per
Share</FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Continuing operations</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 1.03 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 1.20 </FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Discontinued operations</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 0.04 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="52" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (0.03)</FONT></TD></TR><TR><TD width="164" height="16" align="left"><FONT size="2">Net income</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="70" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 1.07 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="70" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="52" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 1.17 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>Note: The sum of the earnings per share amounts may not equal the totals above due to rounding.</P></FONT></DIV><DIV><FONT size="2"><P>In accordance with SFAS No. 128, Earnings per Share, approximately 6.4 million and 2.0 million common stock equivalent shares for the three months ended June 30, 2009 and 2008, respectively, and 6.5 million and 1.9 million common stock equivalent shares for the six months ended June 30, 2009 and 2008, respectively, issuable upon the exercise of stock options were excluded from the above computations because the exercise prices of such options were greater than the average market price of the common stock and therefore the impact of these shares was anti-dilutive.<BR/><BR/>On February 9, 2009, we made our annual stock compensation grant which consisted of approximately 1.6 million stock options and 0.8 million restricted stock units.</P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>7. Segment Information<BR/><BR/>We conduct our business activities in seven business segments within the Mailstream Solutions and Mailstream Services business groups. We calculate earnings before interest and taxes (“EBIT”) by deducting from revenue the related costs and expenses attributable to the segment. EBIT, a non-GAAP measure, is useful to management in demonstrating the operational profitability of the segments by excluding interest and taxes, which are generally managed across the entire company on a consolidated basis. Segment EBIT also excludes general corporate expenses, restructuring charges and asset impairments.<BR/><BR/>Mailstream Solutions:<BR/><BR/>U.S. Mailing: Includes the U.S. revenue and related expenses from the sale, rental and financing of our mail finishing, mail creation, shipping equipment and software; supplies; support and other professional services; and payment solutions.<BR/><BR/>International Mailing: Includes the non-U.S. revenue and related expenses from the sale, rental and financing of our mail finishing, mail creation, shipping equipment and software; supplies; support and other professional services; and payment solutions.<BR/><BR/>Production Mail: Includes the worldwide revenue and related expenses from the sale, financing, support and other professional services of our high-speed, production mail systems and sorting equipment.<BR/><BR/>Software: Includes the worldwide revenue and related expenses from the sale and support services of non-equipment-based mailing, customer communication and location intelligence software.<BR/><BR/>Mailstream Services:<BR/><BR/>Management Services: Includes worldwide facilities management services; secure mail services; reprographic, document management services; and litigation support and eDiscovery services.<BR/><BR/>Mail Services: Includes presort mail services and cross-border mail services.<BR/><BR/>Marketing Services: Includes direct marketing services for targeted customers; web-tools for the customization of promotional mail and marketing collateral; and other marketing consulting services.<BR/><BR/>Revenue and EBIT by business segment for the three and six months ended June 30, 2009 and 2008 are as follows:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Three Months Ended June 30,</B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="5" width="196" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Six Months Ended June 30,</B></FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">Revenue:</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  U.S. Mailing </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 505,159 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 550,849 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 1,013,682 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 1,103,434 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  International Mailing </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 217,900 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 302,085 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 455,212 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 610,418 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Production Mail </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 130,137 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 149,400 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 239,566 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 284,804 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Software </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 82,823 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 102,250 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 158,198 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 201,913 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">    Mailstream Solutions </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> 936,019 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> 1,104,584 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> 1,866,658 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> 2,200,569 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Management Services </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 263,763 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 300,454 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 530,265 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 603,089 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Mail Services </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 138,598 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 134,764 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 279,849 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 260,186 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Marketing Services </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 40,082 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 48,284 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 81,274 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 98,199 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">    Mailstream Services </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> 442,443 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> 483,502 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> 891,388 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> 961,474 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">Total revenue </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"><B> 1,378,462 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"> 1,588,086 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"><B> 2,758,046 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"> 3,162,043 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Three Months Ended June 30,</B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="5" width="196" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Six Months Ended June 30,</B></FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="16" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">EBIT: (1)</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  U.S. Mailing </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 195,044 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 220,526 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 387,878 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 444,481 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  International Mailing </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 27,069 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 51,462 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 58,008 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 101,397 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Production Mail </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 10,413 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 15,350 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 15,480 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 23,933 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Software </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 5,219 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 6,317 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 7,823 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 12,795 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">    Mailstream Solutions </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> 237,745 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> 293,655 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> 469,189 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> 582,606 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Management Services </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 16,140 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 18,230 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 29,777 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 36,867 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Mail Services </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 21,723 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 15,980 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 40,298 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 34,369 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Marketing Services </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 3,147 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 3,527 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 5,163 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 5,279 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">    Mailstream Services </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> 41,010 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> 37,737 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> 75,238 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> 76,515 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">Total EBIT </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 278,755 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 331,392 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> 544,427 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> 659,121 </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">Unallocated amounts:</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Interest, net (2)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> (54,058)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> (54,127)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> (104,709)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> (112,904)</FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Corporate expenses </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> (45,431)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> (51,928)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right"><FONT size="2"><B> (82,003)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right"><FONT size="2"> (100,507)</FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">  Restructuring charges and asset impairments </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (18,815)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (35,908)</FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="292" height="16" align="left"><FONT size="2">Income from continuing operations
before income taxes</FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"><B> 179,266 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"> 206,522 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"><B> 357,715 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="16" align="right" style="border-bottom: 3px double #000000;"><FONT size="2"> 409,802 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>(1)        Earnings before interest and taxes excludes general corporate expenses, restructuring charges, and asset impairments.<BR/>(2)        Interest, net includes financing interest expense, other interest expense and interest income.</P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="390" height="16" align="left"><FONT size="2"><B><I>8. Inventories</I></B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B><I> </I></B></FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Inventories are composed of the following:</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="108" height="16" align="center"><FONT size="2"><B>June 30,</B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="108" height="16" align="center"><FONT size="2">December 31,</FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="108" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="108" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Raw materials and work in process </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 47,303 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 41,171 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Supplies and service parts </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right"><FONT size="2"><B> 78,373 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="right"><FONT size="2"> 78,018 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Finished products </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 45,591 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 42,132 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Total </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 171,267 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 161,321 </FONT></TD></TR></TABLE></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="390" height="16" align="left"><FONT size="2"><B><I>9. Fixed Assets</I></B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B><I> </I></B></FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="108" height="16" align="center"><FONT size="2"><B>June 30,</B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="108" height="16" align="center"><FONT size="2">December 31,</FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="108" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="108" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Property, plant and equipment </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 1,826,971 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 1,880,422 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Accumulated depreciation </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> (1,280,166)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (1,306,162)</FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Property, plant and equipment, net </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 546,805 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 574,260 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Rental property and equipment </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="96" height="16" align="right"><FONT size="2"><B> 736,338 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2">$</FONT></TD><TD width="96" height="16" align="right"><FONT size="2"> 932,389 </FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Accumulated depreciation </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="96" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> (370,486)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="96" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (534,440)</FONT></TD></TR><TR><TD width="390" height="16" align="left"><FONT size="2">Rental property and equipment, net </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 365,852 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="96" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 397,949 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>Depreciation expense was $69.6 million and $78.5 million for the three months ended June 30, 2009 and 2008, respectively. Depreciation expense was $139.6 million and $158.9 million for the six months ended June 30, 2009 and 2008, respectively.<BR/></P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD colspan="18" width="681" height="21" align="left"><FONT size="2"><B><I>10. Intangible Assets and Goodwill</I></B></FONT></TD></TR><TR><TD colspan="18" width="681" height="16" align="left"><FONT size="2"><B> </B></FONT></TD></TR><TR><TD colspan="18" width="681" height="16" align="left"><FONT size="2">Intangible assets are composed of the following:</FONT></TD></TR><TR><TD colspan="18" width="681" height="16" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="147" height="16" align="left"><FONT size="2"> </FONT></TD><TD colspan="8" width="263" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>June 30, 2009</B></FONT></TD><TD width="12" height="16" align="center"><FONT size="2"> </FONT></TD><TD colspan="8" width="259" height="16" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">December 31, 2008</FONT></TD></TR><TR><TD width="147" height="48" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="77" height="48" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Gross Carrying Amount</B></FONT></TD><TD width="12" height="48" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="87" height="48" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Accumulated Amortization</B></FONT></TD><TD width="12" height="48" align="center" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="75" height="48" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Net
Carrying Amount</B></FONT></TD><TD width="12" height="48" align="center"><FONT size="2"> </FONT></TD><TD colspan="2" width="77" height="48" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Gross Carrying Amount</FONT></TD><TD width="12" height="48" align="center" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD colspan="2" width="83" height="48" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Accumulated Amortization</FONT></TD><TD width="12" height="48" align="center" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD colspan="2" width="75" height="48" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Net
Carrying Amount</FONT></TD></TR><TR><TD width="147" height="16" align="left"><FONT size="2">Customer relationships</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="65" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 424,042 </B></FONT></TD><TD width="12" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="75" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> (176,228)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="63" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 247,814 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="65" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 423,169 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="71" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> (154,619)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="63" height="16" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 268,550 </FONT></TD></TR><TR><TD width="147" height="16" align="left"><FONT size="2">Supplier relationships</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="65" height="16" align="right"><FONT size="2"><B> 29,000 </B></FONT></TD><TD width="12" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="75" height="16" align="right"><FONT size="2"><B> (11,842)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="63" height="16" align="right"><FONT size="2"><B> 17,158 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="65" height="16" align="right"><FONT size="2"> 29,000 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="71" height="16" align="right"><FONT size="2"> (10,392)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="63" height="16" align="right"><FONT size="2"> 18,608 </FONT></TD></TR><TR><TD width="147" height="16" align="left"><FONT size="2">Software & technology</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="65" height="16" align="right"><FONT size="2"><B> 151,783 </B></FONT></TD><TD width="12" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="75" height="16" align="right"><FONT size="2"><B> (84,828)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="63" height="16" align="right"><FONT size="2"><B> 66,955 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="65" height="16" align="right"><FONT size="2"> 155,035 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="71" height="16" align="right"><FONT size="2"> (78,982)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="63" height="16" align="right"><FONT size="2"> 76,053 </FONT></TD></TR><TR><TD width="147" height="16" align="left"><FONT size="2">Trademarks & trade names</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="65" height="16" align="right"><FONT size="2"><B> 24,998 </B></FONT></TD><TD width="12" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="75" height="16" align="right"><FONT size="2"><B> (15,885)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="63" height="16" align="right"><FONT size="2"><B> 9,113 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="65" height="16" align="right"><FONT size="2"> 25,071 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="71" height="16" align="right"><FONT size="2"> (13,310)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="63" height="16" align="right"><FONT size="2"> 11,761 </FONT></TD></TR><TR><TD width="147" height="16" align="left"><FONT size="2">Non-compete agreements</FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="65" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 2,693 </B></FONT></TD><TD width="12" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="75" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> (2,121)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="63" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 572 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="65" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 2,652 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="71" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (1,802)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="63" height="16" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 850 </FONT></TD></TR><TR><TD width="147" height="16" align="left"><FONT size="2">Total intangible assets</FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="65" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 632,516 </B></FONT></TD><TD width="12" height="16" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="75" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> (290,904)</B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="63" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 341,612 </B></FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="65" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 634,927 </FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="71" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> (259,105)</FONT></TD><TD width="12" height="16" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="16" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="63" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 375,822 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>Amortization expense for intangible assets for the three months ended June 30, 2009 and 2008 was $18.2 million and $17.9 million, respectively. Amortization expense for intangible assets for the six months ended June 30, 2009 and 2008 was $35.6 million and $35.0 million, respectively. <BR/>The estimated future amortization expense related to intangible assets is as follows: </P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="390" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="108" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Amount</B></FONT></TD></TR><TR><TD width="390" height="17" align="left"><FONT size="2">Remaining for year ended December 31, 2009 </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="96" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 31,000 </FONT></TD></TR><TR><TD width="390" height="17" align="left"><FONT size="2">Year ended December 31, 2010 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="17" align="right"><FONT size="2"> 59,000 </FONT></TD></TR><TR><TD width="390" height="17" align="left"><FONT size="2">Year ended December 31, 2011 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="17" align="right"><FONT size="2"> 53,000 </FONT></TD></TR><TR><TD width="390" height="17" align="left"><FONT size="2">Year ended December 31, 2012 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="17" align="right"><FONT size="2"> 47,000 </FONT></TD></TR><TR><TD width="390" height="17" align="left"><FONT size="2">Year ended December 31, 2013</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="17" align="right"><FONT size="2"> 44,000 </FONT></TD></TR><TR><TD width="390" height="17" align="left"><FONT size="2">Thereafter </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="96" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 107,612 </FONT></TD></TR><TR><TD width="390" height="18" align="left"><FONT size="2">Total </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="96" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 341,612 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>Changes in the carrying amount of goodwill by business segment for the six months ended June 30, 2009 are as follows:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="187" height="47" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="115" height="47" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">Balance at
December 31,
2008</FONT></TD><TD width="12" height="47" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="115" height="47" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Acquired during the period</B></FONT></TD><TD width="12" height="47" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="115" height="47" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Other (1)</B></FONT></TD><TD width="12" height="47" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="115" height="47" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Balance at
June 30,
2009</B></FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">  U.S. Mailing </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 142,365 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 246 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 142,611 </B></FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">  International Mailing </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="103" height="17" align="right"><FONT size="2"> 322,230 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> 16,112 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> 338,342 </B></FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">  Production Mail </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="103" height="17" align="right"><FONT size="2"> 137,067 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> 238 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> 137,305 </B></FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">  Software </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="103" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 623,995 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 7,728 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 631,723 </B></FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">Mailstream Solutions </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> 1,225,657 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> 24,324 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> 1,249,981 </B></FONT></TD></TR><TR><TD width="187" height="15" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="15" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="103" height="15" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="15" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="15" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="15" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="15" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="15" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="15" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="15" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="15" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="15" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">  Management Services </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="103" height="17" align="right"><FONT size="2"> 491,633 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> 912 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> 492,545 </B></FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">  Mail Services </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="103" height="17" align="right"><FONT size="2"> 260,793 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> (983)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> 259,810 </B></FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">  Marketing Services </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="103" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 273,747 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 68 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 273,815 </B></FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">Mailstream Services </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"> 1,026,173 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> (3)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B> 1,026,170 </B></FONT></TD></TR><TR><TD width="187" height="18" align="left"><FONT size="2">Total </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="103" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 2,251,830 </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 24,321 </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 2,276,151 </B></FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>(1)         “Other” includes post closing acquisition and foreign currency translation adjustments.</P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>11. Long-term Debt <BR/><BR/>On June 29, 2009, we entered into an interest rate swap for an aggregate notional amount of $100 million to effectively convert our interest payments on a portion of the $400 million, 4.625% fixed rate notes due in 2012, into variable interest rates. The variable rates payable are based on one month LIBOR plus 249 basis points. In July 2009, we entered into three additional interest rate swaps for an aggregate notional amount of $300 million to effectively convert our interest payments on the remainder of the $400 million, 4.625% fixed rate notes due in 2012, into variable interest rates. The variable rates payable are based on one month LIBOR plus 248 basis points for $100 million notional amount and one month LIBOR plus 250 basis points for $200 million notional amount. <BR/><BR/>On March 2, 2009, we issued $300 million of 10-year fixed-rate notes with a coupon rate of 6.25%. The interest is paid semi-annually beginning September 15, 2009. The notes mature on March 15, 2019. We simultaneously unwound four forward starting swap agreements (forward swaps) used to hedge the interest rate risk associated with the forecasted issuance of the fixed-rate debt. The unwind of the derivatives resulted in a loss (and cash payment) of $20.3 million which was recorded to other comprehensive income, net of tax, and will be amortized to net interest expense over the 10-year term of the notes. The proceeds from these notes were used for general corporate purposes, including the repayment of commercial paper.<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 notes 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.</P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>12. Noncontrolling Interests (Preferred Stockholders’ Equity in Subsidiaries)<BR/><BR/>Pitney Bowes International Holdings, Inc. (“PBIH”), 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 of PBIH. 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 was 4.8% for the three months and six months ended June 30, 2009 and 2008, respectively. Preferred dividends are included in noncontrolling interests (preferred stock dividends of subsidiaries) in the Condensed Consolidated Statements of Income. The preferred stock is subject to mandatory redemption based on certain events, at a redemption price not less than $100 per share, plus the amount of any dividends accrued or in arrears. No dividends were in arrears at June 30, 2009, December 31, 2008 or June 30, 2008. A rollforward of noncontrolling interests is as follows:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="460" height="17" align="left"><FONT size="2">Beginning balance, January 1, 2008</FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="96" height="17" align="right"><FONT size="2"> 384,165 </FONT></TD></TR><TR><TD width="460" height="17" align="left"><FONT size="2">  Movements:</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="96" height="17" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="460" height="17" align="left"><FONT size="2">     Share redemptions (1)</FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="96" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (10,000)</FONT></TD></TR><TR><TD width="460" height="18" align="left"><FONT size="2">Ending balance, December 31, 2008 and June 30, 2009</FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="96" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 374,165 </B></FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>(1)         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/></P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>13. Comprehensive Income<BR/><BR/>Comprehensive income for the three and six months ended June 30, 2009 and 2008 are as follows:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="292" height="18" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="18" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Three Months Ended June 30,</B></FONT></TD><TD width="12" height="18" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="5" width="196" height="18" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Six Months Ended June 30,</B></FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD><TD width="12" height="17" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Pitney Bowes Inc. net income </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 117,262 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 128,509 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 221,664 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 247,612 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Other comprehensive income, net of tax:</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="right"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">  Foreign currency translation adjustments (1) </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 107,164 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 1,413 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 47,734 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 38,113 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">  Net unrealized gain (loss) on derivatives </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 164 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> (225)</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 6,514 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 803 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">  Net unrealized loss on investment securities </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (151)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> (284)</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (230)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> (75)</FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">  Amortization of pension and postretirement costs</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 4,157 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 3,562 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 8,752 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 7,131 </FONT></TD></TR><TR><TD width="292" height="18" align="left"><FONT size="2">Comprehensive income </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 228,596 </B></FONT></TD><TD width="12" height="18" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 132,975 </FONT></TD><TD width="12" height="18" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 284,434 </B></FONT></TD><TD width="12" height="18" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 293,584 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>(1)        Includes a net deferred translation loss of $6.4 million and $0.3 million for the three months ended June 30, 2009 and 2008, respectively. For the six months ended June 30, 2009 and 2008, a net loss of $12.0 million and a net gain of $10.0 million, respectively, were recorded. These amounts are associated with intercompany loans denominated in a foreign currency that have been designated as a hedge of net investment.<BR/></P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>14. Restructuring Charges and Asset Impairments<BR/><BR/>Pre-tax restructuring reserves at June 30, 2009 are composed of the following:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="194" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">Balance at
December 31,
2008</FONT></TD><TD width="12" height="17" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="87" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Expenses</B></FONT></TD><TD width="12" height="17" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="87" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Cash payments</B></FONT></TD><TD width="12" height="17" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="87" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Non-cash charges</B></FONT></TD><TD width="12" height="17" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="87" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Balance at
June 30,
2009</B></FONT></TD></TR><TR><TD width="194" height="17" align="left"><FONT size="2">Severance and benefit costs </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 108,431 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="75" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="75" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> (42,264)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="75" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="75" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 66,167 </B></FONT></TD></TR><TR><TD width="194" height="17" align="left"><FONT size="2">Other exit costs </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 32,678 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="75" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="75" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> (6,846)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="75" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="75" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 25,832 </B></FONT></TD></TR><TR><TD width="194" height="18" align="left"><FONT size="2">Total </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 141,109 </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="75" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="75" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> (49,110)</B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="75" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="75" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 91,999 </B></FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>We recorded pre-tax restructuring charges and asset impairments during 2008 and 2007. These charges primarily related to a program we announced in November 2007 to lower our cost structure, accelerate efforts to improve operational efficiencies, and transition our product line.<BR/><BR/>As of June 30, 2009, 2,743 terminations have occurred under this program and approximately 300 additional positions have been eliminated since the inception of the program. The majority of the liability at June 30, 2009 is expected to be paid by the end of 2009 from cash generated from operations.</P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>15. Pensions and Other Benefit Programs<BR/><BR/>Defined Benefit Pension Plans<BR/><BR/>The components of net periodic benefit cost for defined benefit pension plans for the three months ended June 30, 2009 and 2008 are as follows:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="292" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>United States</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Foreign</B></FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Three Months Ended June 30,</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="5" width="196" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Three Months Ended June 30,</B></FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Service cost </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 4,916 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 7,031 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 1,683 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 2,887 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Interest cost </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 23,262 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 24,190 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 6,217 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 7,748 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Expected return on plan assets </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (29,861)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> (33,196)</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (6,727)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> (9,748)</FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Amortization of transition (credit) cost </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2">- </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2">-</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (2)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 32 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Amortization of prior service (credit) cost</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (678)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> (635)</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 112 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 170 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Amortization of net loss </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 6,159 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 4,883 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 611 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 1,055 </FONT></TD></TR><TR><TD width="292" height="18" align="left"><FONT size="2">Net periodic benefit cost </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 3,798 </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 2,273 </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 1,894 </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 2,144 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>The components of net periodic benefit cost for defined benefit pension plans for the six months ended June 30, 2009 and 2008 are as follows:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="292" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>United States</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Foreign</B></FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Six Months Ended June 30,</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="5" width="196" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Six Months Ended June 30,</B></FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Service cost </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 12,256 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 14,062 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 3,275 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 5,578 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Interest cost </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 47,486 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 48,380 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 12,009 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 15,479 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Expected return on plan assets </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (60,012)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> (66,392)</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (12,983)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> (19,502)</FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Amortization of transition (credit) cost</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2">- </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2">- </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (4)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 64 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Amortization of prior service (credit) cost</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (1,274)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> (1,270)</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 215 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 340 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Amortization of net loss </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 13,186 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 9,766 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 1,191 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 2,114 </FONT></TD></TR><TR><TD width="292" height="18" align="left"><FONT size="2">Net periodic benefit cost </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 11,642 </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 4,546 </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 3,703 </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 4,073 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>We are revising our expected 2009 pension plan contributions. We now expect to contribute up to $15 million each to the U.S. and foreign plans. We will continue to reassess our funding alternatives as the year progresses. At June 30, 2009, $10.3 million and $7.8 million of contributions have been made to the U.S. and foreign pension plans, respectively.<BR/><BR/>Our pension funds’ actual asset returns have performed in line with our portfolio benchmark indices. Our funded status will be highly dependent on the market returns and the prevailing discount rate used to value our year-end obligations.<BR/><BR/>Nonpension Postretirement Benefit Plans<BR/><BR/>The components of net periodic benefit cost for nonpension postretirement benefit plans for the three and six months ended June 30, 2009 and 2008 are as follows:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="292" height="18" align="left"><FONT size="2"> </FONT></TD><TD colspan="5" width="196" height="18" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Three Months Ended June 30,</B></FONT></TD><TD width="12" height="18" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="5" width="196" height="18" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Six Months Ended June 30,</B></FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>2009 </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD colspan="2" width="92" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">2008 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Service cost </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 1,010 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 892 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 1,812 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 1,784 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Interest cost </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 3,728 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 3,459 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> 7,290 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> 6,915 </FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Amortization of prior service credit </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (620)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> (618)</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right"><FONT size="2"><B> (1,240)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right"><FONT size="2"> (1,236)</FONT></TD></TR><TR><TD width="292" height="17" align="left"><FONT size="2">Amortization of net loss </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 1,122 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 738 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="80" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 2,068 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="80" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 1,477 </FONT></TD></TR><TR><TD width="292" height="18" align="left"><FONT size="2">Net periodic benefit cost </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 5,240 </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 4,471 </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 9,930 </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="80" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 8,940 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>For the three months ended June 30, 2009 and 2008, we made $5.5 million and $8.3 million of contributions representing benefit payments, respectively. Contributions for benefit payments were $13.4 million and $17.1 million for the six months ended June 30, 2009 and 2008.</P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>16. Income Taxes<BR/><BR/>The effective tax rate for the three months ended June 30, 2009 and 2008 was 34.9% and 34.1%, respectively. The effective tax rate for the six months ended June 30, 2009 and 2008 was 37.7% and 35.6%, respectively. The year-to-date 2009 tax rate was increased by a $12.0 million write-off of deferred tax assets associated with the expiration of out-of-the-money vested stock options and the vesting of stock units previously granted to our employees. This write-off of deferred tax assets will not require us to pay any taxes. The year-to-date 2008 tax rate was increased by a $6.5 million tax accrual associated with lease refunds in the U.K. and Ireland. <BR/><BR/>We regularly assess the likelihood of tax 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 and the examination of years 2005-2007 has commenced. In connection with the 2001-2004 exam, we have received notices of proposed 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. District Court in Rhode Island ruled that certain company workpapers were privileged. The IRS has appealed that decision. Also in connection with the 2001-2004 audit, 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, including 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/></P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>17. Fair Value Measurements<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’s valuation technique for measuring fair value should maximize observable inputs and minimize unobservable inputs. <BR/><BR/>Non-recurring nonfinancial assets and nonfinancial liabilities include those measured at fair value in goodwill and indefinite lived intangible asset impairment testing, and those non-recurring nonfinancial 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 were 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 – 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/><BR/>Level 2 – 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 market 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, such as mortgage-backed securities, asset backed securities, U.S. agency securities, and corporate notes and bonds. <BR/><BR/>Level 3 – 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’s best estimate of fair value. During the six months ended June 30, 2009 and for the year ended December 31, 2008, we had no Level 3 recurring measurements. <BR/><BR/>The following tables show, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis as of June 30, 2009 and December 31, 2008, respectively. 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. </P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="271" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="11" width="412" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Recurring Fair Value Measurements at June 30, 2009 by Level</B></FONT></TD></TR><TR><TD width="271" height="18" align="left"><FONT size="2"><B><I> </I></B></FONT></TD><TD colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Level 1</B></FONT></TD><TD width="12" height="18" align="center" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Level 2</B></FONT></TD><TD width="12" height="18" align="center" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Level 3</B></FONT></TD><TD width="12" height="18" align="center" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Total</B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2"><B>Assets:</B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">  Investment securities</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left"><FONT size="2"><B> </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Money market funds </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> 222,435 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="17" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="17" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> 222,435 </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     U.S. Government and agency issued debt</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> 54,637 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> 11,352 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> 65,989 </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Corporate notes and bonds </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>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> 8,365 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> 8,365 </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Asset backed securities </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>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> 1,344 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> 1,344 </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Mortgage-backed securities </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>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> 14,013 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> 14,013 </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2"> Derivatives</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> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Interest rate swaps </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>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> 8,374 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </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> 8,374 </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Foreign exchange contracts </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 748 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 748 </B></FONT></TD></TR><TR><TD width="271" height="18" align="left"><FONT size="2">Total assets </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 277,072 </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 44,196 </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 321,268 </B></FONT></TD></TR><TR><TD width="271" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"><B> </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2"><B>Liabilities:</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left"><FONT size="2"><B> </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2"> Derivatives</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left"><FONT size="2"><B> </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Interest rate swaps</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>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="17" align="right"><FONT size="2"><B> 259 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="17" align="right"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="17" align="right"><FONT size="2"><B> 259 </B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Foreign exchange contracts </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 36,180 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> 36,180 </B></FONT></TD></TR><TR><TD width="271" height="18" align="left"><FONT size="2">Total liabilities</FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 36,439 </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>- </B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"><B> 36,439 </B></FONT></TD></TR></TABLE></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="271" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="11" width="412" height="18" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Recurring Fair Value Measurements at December 31, 2008 by Level</B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2"><B><I> </I></B></FONT></TD><TD colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Level 1</B></FONT></TD><TD width="12" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Level 2</B></FONT></TD><TD width="12" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Level 3</B></FONT></TD><TD width="12" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Total</B></FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2"><B>Assets:</B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">  Investment securities</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Money market funds </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 181,664 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 181,664 </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     U.S. Government and agency issued debt</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 30,583 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 11,433 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 42,016 </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Corporate notes and bonds </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 4,725 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 4,725 </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Asset backed securities </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 2,658 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 2,658 </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Mortgage-backed securities </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 21,713 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 21,713 </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2"> Derivatives</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">     Interest rate swaps </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 32,486 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 32,486 </FONT></TD></TR><TR><TD width="271" height="18" align="left"><FONT size="2">Total assets </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 212,247 </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 73,015 </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> - </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 285,262 </FONT></TD></TR><TR><TD width="271" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="18" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="18" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="18" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="18" align="right" style="border-top: 3px double #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2"><B>Liabilities:</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"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2"> Derivatives</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"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">    Foreign exchange contracts</FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 286 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="82" height="17" align="right"><FONT size="2"> 286 </FONT></TD></TR><TR><TD width="271" height="17" align="left"><FONT size="2">    Treasury lock and forward starting swaps</FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 31,326 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> - </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="82" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 31,326 </FONT></TD></TR><TR><TD width="271" height="18" align="left"><FONT size="2">Total liabilities</FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> - </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 31,612 </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> - </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 31,612 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>Investment Securities<BR/><BR/>For our investments, we use the market approach for recurring fair value measurements and the valuation techniques use inputs that are observable, or can be corroborated by observable data, in an active marketplace.<BR/><BR/>The following information relates to our classification into the fair value hierarchy:<BR/><BR/><UL><LI> Money Market Funds: Money market funds typically invest in government securities, certificates of deposit, commercial paper of companies and other highly liquid and low-risk securities. Money market funds are principally used for overnight deposits and are classified in Level 1 of the fair value hierarchy. <BR/></LI></UL><BR/><UL><LI>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/></LI></UL><BR/><UL><LI>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/></LI></UL><BR/><UL><LI>Corporate Notes and Bonds: The fair value 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/></LI></UL><BR/><UL><LI>Asset Backed Securities (“ABS”) and Mortgage-Backed Securities (“MBS”): These securities are 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. We verify that the unadjusted indices or broker quotes are reasonable and that the market is active by comparing prices across multiple (three or more) dealers. When inputs 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/></LI></UL><BR/>Investment securities are primarily composed of investments by The Pitney Bowes Bank (PBB). PBB, our wholly-owned subsidiary, is a Utah-chartered Industrial Loan Company (ILC). The bank’s investments at June 30, 2009 were $226.2 million. We reported these investments in the Condensed Consolidated Balance Sheet as cash and cash equivalents of $154.5 million, short-term investments of $20.6 million and long-term investments of $51.1 million. The bank’s investments at December 31, 2008 were $196.9 million. We reported these investments in the Condensed 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’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 price monthly 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 redemptions. <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/>Derivative Instruments <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/>The following is a summary of our derivative fair values at June 30, 2009:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="299" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Designation of Derivatives</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Balance Sheet Location</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="100" height="17" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Fair Value</B></FONT></TD></TR><TR><TD width="299" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>Derivatives designated as hedging instruments</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>Other current assets and prepayments:</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="88" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2">  Foreign exchange contracts</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="88" height="17" align="right"><FONT size="2"> 574 </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2"><B>Other assets:</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="17" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2">  Interest rate swaps</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="17" align="right"><FONT size="2"> 8,374 </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2"><B>Accounts payable and accrued liabilities:</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="17" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2">  Foreign exchange contracts</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="17" align="right"><FONT size="2"> 1,365 </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2"><B>Other non-current liabilities:</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="17" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2">  Interest rate swaps</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="17" align="right"><FONT size="2"> 259 </FONT></TD></TR><TR><TD width="299" height="6" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="6" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="6" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="6" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="6" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="6" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"><B>Derivatives not designated as hedging instruments</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2"><B>Other current assets and prepayments:</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="17" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2">  Foreign exchange contracts</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="17" align="right"><FONT size="2"> 173 </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2"><B>Accounts payable and accrued liabilities:</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="17" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2">  Foreign exchange contracts</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="17" align="right"><FONT size="2"> 34,815 </FONT></TD></TR><TR><TD width="299" height="8" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="8" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="8" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="8" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="8" align="left"><FONT size="2"> </FONT></TD><TD width="88" height="8" align="left"><FONT size="2"> </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2"><B>Total Derivative Assets</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="88" height="17" align="right"><FONT size="2"> 9,121 </FONT></TD></TR><TR><TD width="299" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="17" align="left"><FONT size="2"><B>Total Derivative Liabilities</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="88" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> 36,439 </FONT></TD></TR><TR><TD width="299" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="285" height="18" align="left"><FONT size="2"><B>Total Net Derivative Liabilities</B></FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="88" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> 27,318 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>Interest Rate Swaps<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/>On June 29, 2009, we entered into an interest rate swap for an aggregate notional amount of $100 million to effectively convert our interest payments on a portion of the $400 million, 4.625% fixed rate notes due in 2012, into variable interest rates. The variable rates payable are based on one month LIBOR plus 249 basis points. At June 30, 2009, the fair value of the derivative was a liability of $0.3 million. Long-term debt was increased by $0.3 million at June 30, 2009. <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 June 30, 2009, the fair value of the derivatives was an asset of $8.4 million. Long-term debt was reduced by $8.4 million at June 30, 2009. At December 31, 2008, the fair value of the derivatives was an asset of $32.5 million. Long-term debt was reduced by $32.5 million at December 31, 2008. The following represents the results of our derivatives in fair value hedging relationships for the three months ended June 30, 2009:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="145" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivative Instrument</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="180" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Location of Gain (Loss) Recognized In Income</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="157" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivative Gain (Loss) Recognized In Income</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="192" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Hedged Item Income (Expense) Recognized in Income</B></FONT></TD></TR><TR><TD width="145" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">Interest rate swaps</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="180" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2">Interest expense</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="145" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 1,716 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="180" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> (3,500)</FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>The following represents the results of our derivatives in fair value hedging relationships for the six months ended June 30, 2009:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="145" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivative Instrument</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="180" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Location of Gain (Loss) Recognized In Income</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="157" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivative Gain (Loss) Recognized In Income</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="192" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Hedged Item Income (Expense) Recognized in Income</B></FONT></TD></TR><TR><TD width="145" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">Interest rate swaps</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="180" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2">Interest expense</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="145" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 3,256 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="180" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> (7,000)</FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>Foreign Exchange Contracts<BR/>We 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 portion 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. At June 30, 2009, we had 93 outstanding contracts with a notional amount of $27.8 million associated with these anticipated transactions and a derivative net liability position of $0.8 million. We had no outstanding contracts at December 31, 2008. <BR/><BR/>The following represents the results of cash flow hedging relationships for the three months ended June 30, 2009:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="215" height="68" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivative Instrument</B></FONT></TD><TD width="12" height="68" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="153" height="68" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivative Gain (Loss) Recognized in OCI (Effective Portion) (1)</B></FONT></TD><TD width="12" height="68" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="145" height="68" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Location of Derivative Gain (Loss) Reclassified From AOCI into Income (Effective Portion)</B></FONT></TD><TD width="12" height="68" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="157" height="68" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Gain (Loss) Reclassified from AOCI to Income (Effective Portion)</B></FONT></TD></TR><TR><TD width="215" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">Foreign exchange contracts</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="141" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 1,238 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="145" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2">Revenue</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="145" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> (47)</FONT></TD></TR><TR><TD width="215" height="17" align="left"><FONT size="2">Foreign exchange contracts</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="141" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (1,477)</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="145" height="17" align="center"><FONT size="2">Cost of sales</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="145" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (308)</FONT></TD></TR><TR><TD width="215" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="141" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> (239)</FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="145" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="145" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> (355)</FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>The following represents the results of cash flow hedging relationships for the six months ended June 30, 2009:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="215" height="68" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivative Instrument</B></FONT></TD><TD width="12" height="68" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="153" height="68" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivative Gain (Loss) Recognized in OCI (Effective Portion) (1)</B></FONT></TD><TD width="12" height="68" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="145" height="68" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Location of Derivative Gain (Loss) Reclassified From AOCI into Income (Effective Portion)</B></FONT></TD><TD width="12" height="68" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="157" height="68" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Gain (Loss) Reclassified from AOCI to Income (Effective Portion)</B></FONT></TD></TR><TR><TD width="215" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">Foreign exchange contracts</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="141" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 574 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="145" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2">Revenue</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="145" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> (47)</FONT></TD></TR><TR><TD width="215" height="17" align="left"><FONT size="2">Foreign exchange contracts</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="141" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (1,365)</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="145" height="17" align="center"><FONT size="2">Cost of sales</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-bottom: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD width="145" height="17" align="right" style="border-bottom: 1px solid #000000;"><FONT size="2"> (308)</FONT></TD></TR><TR><TD width="215" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="141" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> (791)</FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="145" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2">$</FONT></TD><TD width="145" height="18" align="right" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;"><FONT size="2"> (355)</FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>(1) At December 31, 2008, there were no outstanding cash flow hedges and, therefore, the opening AOCI balance related to these types of hedges was $0. For 2009, there were 7 derivatives that were entered into and settled within the three months ended March 31 and 9 derivatives that were entered into and settled within the three months ended June 30. Thus, these amounts were not recorded to AOCI but were recorded directly to income. For the six months ended June 30, these derivatives reduced revenue in the amount of $0.1 million and increased cost of sales in the amount of $0.3 million. For the three months ended June 30, these derivatives increased revenue in the amount of $0.2 million and reduced cost of sales in the amount of $0.3 million <BR/><BR/>As of June 30, 2009, $0.5 million of the $0.8 million derivative loss recognized in OCI will be recognized in income within the next 12 months.<BR/><BR/>No amount of ineffectiveness was recorded in the Condensed Consolidated Statements of Income for these designated cash flow hedges.<BR/><BR/>We also enter into foreign exchange contracts to minimize the impact of exchange rate fluctuations on intercompany loans and related interest that are denominated in a foreign currency. The revaluation of the short-term intercompany loans and interest and the mark-to-market on the derivatives are both recorded to income. At June 30, 2009, we had 23 outstanding foreign exchange contracts to buy or sell various currencies with a net liability value of $34.6 million. The contracts will expire by November 10, 2009. At December 31, 2008, the liability value of these derivatives was $0.1 million. The following represents the results of our non-designated derivative instruments for the three months ended June 30, 2009:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="285" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivatives not designated
as hedging instruments</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="257" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Location of Derivative Gain (Loss)</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="157" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivative Gain (Loss) Recognized in Income</B></FONT></TD></TR><TR><TD width="285" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">Foreign exchange contracts</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="257" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">Selling, general and administrative expense</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="145" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> (34,534)</FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>The following represents the results of our non-designated derivative instruments for the six months ended June 30, 2009:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="285" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivatives not designated
as hedging instruments</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD width="257" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Location of Derivative Gain (Loss)</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="157" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Derivative Gain (Loss) Recognized in Income</B></FONT></TD></TR><TR><TD width="285" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">Foreign exchange contracts</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="257" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">Selling, general and administrative expense</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="145" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> (35,564)</FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>Net Investment Hedges<BR/>One of our intercompany loans denominated in a foreign currency is designated as a hedge of a net investment. The revaluation of this loan is reflected as a deferred translation gain or loss and thereby offsets a portion of the translation adjustment of the applicable foreign subsidiaries’ net assets. At June 30, 2009 and December 31, 2008, we had one intercompany loan with an outstanding value of $84.1 million and $119.2 million, respectively, designated as a net investment hedge. Deferred translation gains of $29.8 million and $41.7 million at June 30, 2009 and December 31, 2008, respectively, were included in accumulated other comprehensive loss in stockholders’ deficit on the Condensed Consolidated Balance Sheets. The following represents our net investment hedge at June 30, 2009:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="201" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Net Investment Hedging Relationships</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="94" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Loan Balance</B></FONT></TD><TD width="12" height="34" align="center"><FONT size="2"><B> </B></FONT></TD><TD width="282" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Location of Deferred
Translation Gain (Loss)</B></FONT></TD><TD width="12" height="34" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="94" height="34" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>Deferred Translation Gain (Loss)</B></FONT></TD></TR><TR><TD width="201" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">Non-derivative intercompany loan</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 84,114 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="282" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2">Accumulated other comprehensive (loss) income</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="82" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 29,787 </FONT></TD></TR></TABLE></DIV><DIV><FONT size="2"><P>Credit-Risk-Related Contingent Features<BR/>At June 30, 2009, Pitney Bowes maintained investment grade ratings of A / A1. Certain of our derivative instruments contain provisions that would require us to post collateral upon a significant downgrade in our long-term senior unsecured debt ratings. Based on derivative values at June 30, 2009, we would have been required to post $35.4 million in collateral had our long-term senior unsecured debt ratings fallen below BB- / Ba3.<BR/><BR/>Fair Value of Financial Instruments<BR/>The estimated fair value of our financial instruments follows:</P></FONT></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="187" height="18" align="left"><FONT size="2"><B> </B></FONT></TD><TD colspan="5" width="242" height="18" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2"><B>June 30, 2009</B></FONT></TD><TD width="12" height="18" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="5" width="242" height="18" align="center" style="border-bottom: 1px solid #000000;"><FONT size="2">December 31, 2008</FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2"> </FONT></TD><TD colspan="2" width="115" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Carrying
value (1)</B></FONT></TD><TD width="12" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="115" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2"><B>Fair value</B></FONT></TD><TD width="12" height="17" align="center"><FONT size="2"><B> </B></FONT></TD><TD colspan="2" width="115" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Carrying
value (1)</FONT></TD><TD width="12" height="17" align="center" style="border-top: 1px solid #000000;"><FONT size="2"> </FONT></TD><TD colspan="2" width="115" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><FONT size="2">Fair value</FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">Investment securities </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 311,042 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"><B> 312,156 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 251,298 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left" style="border-top: 1px solid #000000;"><FONT size="2">$</FONT></TD><TD width="103" height="17" align="right" style="border-top: 1px solid #000000;"><FONT size="2"> 252,776 </FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">Loans receivable </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> 476,288 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> 476,288 </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="103" height="17" align="right"><FONT size="2"> 528,800 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="103" height="17" align="right"><FONT size="2"> 528,800 </FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">Long-term debt </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> (4,270,298)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> (4,357,897)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="103" height="17" align="right"><FONT size="2"> (3,990,134)</FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="103" height="17" align="right"><FONT size="2"> (3,880,418)</FONT></TD></TR><TR><TD width="187" height="17" align="left"><FONT size="2">Derivatives, net </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> (27,318)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B>$</B></FONT></TD><TD width="103" height="17" align="right"><FONT size="2"><B> (27,318)</B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2"><B> </B></FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="103" height="17" align="right"><FONT size="2"> 874 </FONT></TD><TD width="12" height="17" align="left"><FONT size="2"> </FONT></TD><TD width="12" height="17" align="left"><FONT size="2">$</FONT></TD><TD width="103" height="17" align="right"><FONT size="2"> 874 </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 the short maturity of these instruments.</P></FONT></DIV></BODY></HTML>
<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>18. Commitments and Contingencies<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 class 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’s Privacy Protection Act Litigation (Coordinated, May 28, 2007). Each of these lawsuits alleges that the Imagitas DriverSource program violated the federal Drivers Privacy Protection Act (DPPA). Under the DriverSource program, Imagitas entered 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 assisted 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’ motion for summary judgment 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’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/>Product Warranties<BR/><BR/>We provide product warranties in conjunction with certain product sales, generally for a period of 90 days from the date of installation. Our product warranty liability reflects our best estimate of probable liability for product warranties based on historical claims experience, which has not been significant, and other currently available evidence. Accordingly, our product warranty liability at June 30, 2009 and December 31, 2008, respectively, was not material.<BR/></P></FONT></DIV></BODY></HTML>
The sum of the earnings per share amounts may not equal the totals above due to rounding.