UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 10-K

X  ANNUAL  REPORT  PURSUANT  TO  SECTION 13 OR  15(d)  OF  THE  SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the year ended December 31, 1994
OR
TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF  THE  SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from                 to

Commission file number 1-3579

PITNEY BOWES INC.

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

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

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

Name  of each exchange
Title  of  each class                           on which registered

Common Stock ($2 par value)                   New York Stock Exchange

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

Preference Share Purchase Rights              New York Stock Exchange

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

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

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

The Registrant (1) has filed all reports required to be filed by Section 13
or  15(d)  of  the Securities Exchange Act of 1934 during the preceding  12
months,  and (2) has been subject to such filing requirements for the  past
90 days.  Yes   X     No

The  aggregate  market  value  of  voting stock  (common  stock  and  $2.12
preference stock) held by non-affiliates of the Registrant as of March  10,
1995 is $5,346,586,734.

Number of shares of common stock, $2 par value, outstanding as of March 10,
1995 is 150,905,707.

DOCUMENTS INCORPORATED BY REFERENCE:

1.  Only  the  following  portions of the Pitney  Bowes  Inc.  1994  Annual
Report to Stockholders are incorporated by reference into Parts  I,  II
and IV of this Form 10-K Annual Report.

(a)  Financial Statements, pages 29 to 42.

(b)   Management's Discussion and Analysis and Summary of Selected
Financial  Data  on  pages 21 to 28 excluding the  information  on
page 27 relating to Dividend Policy.

(c)  Stock Information and Stock Exchanges, on page 44.

2.  Pitney  Bowes  Inc.  Notice  of  the  1995  Annual  Meeting  and  Proxy
Statement  dated  March 24, 1995 pages 3, 4, 7, 8, 11  to  13,  19  and
portions  of  pages  2,  5, 9, 10, 14, 18 and 20  are  incorporated  by
reference into Part III of this Form 10-K Annual Report.

PART I
Item 1.  Business

Pitney  Bowes  Inc. and its subsidiaries (the company) operate  within  two
industry   segments:   business  equipment  and  services,  and   financial
services.  The company's operations are in the following geographic  areas:
the  United  States,  Europe,  and Canada and other  countries.   Financial
information concerning revenue, operating profit and identifiable assets by
industry  segment and geographic area appears on pages 21  and  41  of  the
Pitney  Bowes  Inc. 1994 Annual Report to Stockholders and is  incorporated
herein by reference.

Business  Equipment and Services.  Business equipment and services consists
of  four  product  and service classes:  mailing systems, copying  systems,
facsimile  systems and facilities management services.  These products  and
services are sold, rented or leased (see Financial Services) by the company
and through dealers.

Mailing  systems  include  postage meters, parcel  registers,  mailing
machines,  manifest  systems,  letter  and  parcel  scales,  mail  openers,
mailroom furniture, folders, and paper handling and shipping equipment.

Copying systems include a wide range of copying systems and supplies.

Facsimile  systems  include  a wide range  of  facsimile  systems  and
supplies.

Facilities management services are provided for a variety of  business
support   functions,  including  correspondence  mail   and   reprographics
management,  high  volume  automated mail  center  management  and  related
activities  such as facsimile, supplies distribution and records management
provided by the company's Pitney Bowes Management Services, Inc. subsidiary
(PBMS).

In  October  1993,  the  company acquired all  outstanding  shares  of
Ameriscribe   Corporation  (Ameriscribe).   Ameriscribe  is  a   nationwide
provider  of  on-site reprographics, mailroom and other office services  to
industrial corporations and professional service firms on a contract basis.
The  company consolidated this unit with its facilities management business
operated through its wholly-owned subsidiary, PBMS.

In  1994,  the  company announced its intent to seek  buyers  for  its
Dictaphone  Corporation  (Dictaphone) and  Monarch  Marking  Systems,  Inc.
(Monarch)  subsidiaries.  The sales of Dictaphone and Monarch are  expected
to  result  in gains at closings which are expected to occur in 1995.   The
company sold its Wheeler Group Inc. (Wheeler) subsidiary in 1992, a  direct
mail  marketer  of office supplies.  Dictaphone, Monarch and  Wheeler  have

been  classified  in the Consolidated Statement of Income  as  discontinued
operations;  revenue  and  income from continuing  operations  exclude  the
results of Dictaphone, Monarch and Wheeler for all periods presented.  (See
Note  11,  Acquisitions  and  discontinued  operations,  of  the  Notes  to
Consolidated  Financial  Statements in the Pitney Bowes  Inc.  1994  Annual
Report  to  Stockholders  which  information  is  incorporated  herein   by
reference).

Financial  Services.  The financial services segment includes the company's
worldwide  financing operations.  The company provides lease financing  for
its  products  as  well as other financial services in  the  U.S.  for  the
commercial and industrial markets.  Lease financing transactions and  other
financial   services  are  executed  through  the  company's   wholly-owned
subsidiaries:  Pitney Bowes Credit Corporation, including Colonial  Pacific
Leasing  Corporation,  Pitney Bowes Real Estate Financing  Corporation  and
Atlantic  Mortgage  & Investment Corporation in the United  States;  Pitney
Bowes  Finance  PLC  in the U.K.; Adrema Leasing in Germany;  Pitney  Bowes
Finance  S.A.  in  France, Pitney Bowes Finans Norway AS and  Pitney  Bowes
Credit Australia Limited.  The company's subsidiary, Pitney Bowes of Canada
Ltd., also has a financing division through which leasing arrangements  are
made  available  to  its  customers.  The finance  operations  financed  41
percent, 44 percent and 43 percent of consolidated sales in 1994, 1993  and
1992, respectively.

Since the first quarter of 1993, the company has continued to phase out
the  business of financing non-Pitney Bowes equipment outside the U.S.  The
company  has  completed its inquiry and evaluation, begun in 1993,  of  the
assets  and  liabilities of its German leasing business.  (See Management's
Discussion  and  Analysis in the Pitney Bowes Inc. 1994  Annual  Report  to
Stockholders  which information is incorporated herein by  reference).   In
the  U.S.  the company continues to lease a broad range of other commercial
and industrial products.  Products financed include both commercial and non-
commercial  aircraft,  over-the-road  trucks  and  trailers,  railcars  and
locomotives  and  high-technology equipment such  as  data  processing  and
communications equipment as well as commercial real estate properties.  The
finance  operations have also participated, on a select basis,  in  certain
other  types of financial transactions including:  syndication  of  certain
lease  transactions, senior secured loans in connection  with  acquisition,
leveraged  buyout  and  recapitalization  financings  and  certain  project
financings as well as mortgage servicing.

Financial services' borrowing strategy is to use a balanced mix of debt
maturities, variable- and fixed-rate debt and interest rate swap agreements
to  control  its  sensitivity  to interest rate  volatility.   The  company
utilizes  interest  rate  swap agreements when it  considers  the  economic
benefits  to be favorable.  Swap agreements have been principally  utilized
to  fix  interest rates on commercial paper and/or obtain a lower  cost  on
debt  than  would  otherwise be available absent the swap.   The  financial
services segment may borrow through the sale of commercial paper, under its
confirmed  bank  lines of credit, and by private and  public  offerings  of
intermediate-  or  long-term debt securities.  While the company's  funding
strategy  may  reduce sensitivity to interest rate changes over  the  long-
term,  effective interest costs have been and will continue to be  impacted
by  interest rate changes.  The company periodically adjusts prices on  its
new  leasing  and  financing transactions to reflect  changes  in  interest
rates; however, the impact of these rate changes on revenue is usually less
immediate than the impact on borrowing costs.

Nonrecurring  Items,  Net.   In 1994, a net nonrecurring  credit  of  $25.4
million resulted from a $118.6 million credit to income for changes made to
certain  postemployment  benefits and the  decision  to  undertake  certain
strategic actions which resulted in a $93.2 million charge to income.

Since the first quarter of 1994, as part of the company's employee work-
life initiatives, employee input was actively sought about benefits, and it
was  concluded that employees prefer benefits more closely related to their
changing  work-life needs.  As a result, in the third quarter of 1994,  the

company   significantly  reduced  or  eliminated  certain   postemployement
benefits,  specifically service-related company-subsidized life  insurance,
salary  continuance and medical benefits, resulting in a pre-tax credit  to
income  of $118.6 million ($70.9 million net of approximately $47.7 million
of  income  taxes).  1994 postemployment benefit expense was not materially
effected  by  the net impact of the adoption of FAS 112 and  these  benefit
changes,  nor  is  ongoing postemployment benefit expense  expected  to  be
materially  affected.   As  a further outgrowth of  the  above  study,  the
company also instituted, effective January 1, 1995, certain enhancements to
its  deferred investment plan, including an increase in the company's match
of employee contributions.

During  the  third quarter of 1994, the company adopted a formal  plan
designed to address the impact of technology on work force requirements and
to  further  refine its strategic focus on core businesses worldwide.   The
company  recorded a $93.2 million charge to income to cover  the  costs  of
such  actions.   The charge includes $61 million of severance  and  benefit
costs  for work force reductions, $22 million of asset write downs and  $10
million  of other exit costs.  All but the write downs will result in  cash
outlays.

The  phase-out of older product lines, introduction of  new,  advanced
products and increased need for higher employee skill levels to deliver and
service these products will require a work force reduction of approximately
2,000  employees  worldwide over the next year, and the  future  hiring  of
approximately 850 new employees with these requisite enhanced skills.   All
costs associated with hiring of new employees were excluded from the charge
and will be recognized appropriately in the period incurred.

Current  and future advanced product offerings require a smaller,  but
more  highly skilled engineering, manufacturing and service work  force  to
take   full  advantage  of  design,  production,  diagnostic  and   service
strategies.  These disciplines account for a work force reduction  of  more
than  850  employees and will require severance and benefit  costs  of  $27
million.  Other strategic actions include reengineering and streamlining of
order  flow,  logistics  and other administrative processes  in  the  U.S.,
Europe and the Asia Pacific region which will result in an additional  work
force  reduction of more than 800 employees requiring severance and benefit
costs of $22.7 million.  The decisions to phase out non-mailing products in
Germany  and the cessation of further development and marketing of shipping
products which cannot be cost-effectively upgraded to new technologies will
account  for the remaining work force reductions and related severance  and
benefit costs.

As  noted above, included in the plan to refine the strategic business
focus  of the company are asset write downs of $22 million and $10  million
of  other  exit  costs for certain additional actions.  Consistent  with  a
refinement of focus on our core businesses, the actions include phasing out
non-mailing products in Germany.  This decision requires the write down  of
inventories,  lease  and rental contracts and other  assets  to  their  net
realizable value for which $7.4 million has been provided.  The decision to
cease development and marketing of certain shipping products as noted above
has  resulted  in  further  inventory and other asset  write-offs  of  $8.6
million.   The company has decided to transition a software-based  business
with  its  own  product  offerings  to a limited  product  development  and
marketing support function.  As a result, $6.3 million of goodwill  related
to  the acquisition of this business has been written-off.  The $10 million
of  other  exit  costs are primarily due to the adoption of  a  centralized
organizational structure in the European financial services businesses that
will result in the early termination of a facility lease.

As  of  December 31, 1994 the company has made severance and  benefits
payments of $3.4 million to approximately 200 employees separated under the
strategic focus initiatives.

Benefits  from  the  strategic focus initiatives (principally  reduced
employee expense) will be offset, in part, by increased hiring and training
expenses  to obtain employees with requisite skills.  Anticipated net  cash
savings  in  1995  and  1996  approximate  $20  million  and  $30  million,
respectively.

In  September 1990, the company changed its copier marketing  strategy
and  announced  plans  to  discontinue the  remanufacture  of  used  copier
equipment.   The copier organization now concentrates on new, higher-margin
copiers  consistent with its marketing strategy directed at  serving  large
corporations and multi-unit installations.  Due to this change in  strategy
and  the resultant discontinuance of the equipment remanufacturing process,
the  company adjusted the estimated useful life of copiers from five  years
to  three years and established a reserve for the disposal of copiers which
previously would have been remanufactured, employee severance payments  and
facility closing costs.  The aggregate one-time, pretax charge against 1990
third-quarter earnings was $86.5 million.

Support   Services.    The  company  maintains  extensive   field   service
organizations  in the U.S. and certain other countries to  provide  support
services to customers who have rented, leased or purchased equipment.  Such
support  services,  provided primarily on the basis of  annual  maintenance
contracts,  accounted for 13 percent, 14 percent and 14 percent of  revenue
in 1994, 1993 and 1992, respectively.

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

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

The  company's discontinued operations, Dictaphone and  Monarch,  have
manufacturing  operations outside the United States in  Australia,  Canada,
Hong Kong, Mexico, Switzerland, Singapore and the United Kingdom.

Competition.   The  company has historically been  a  leading  supplier  of
certain  products  and  services  in its  business  segments,  particularly
postage  meters  and mailing machines.  However, in both  segments  it  has
strong competition from a number of companies.  In particular, it is facing
competition in many countries for new placements from several postage meter
and  mailing machine suppliers, and its mailing systems products face  some
competition  from  products and services offered as  alternative  means  of
message  communications.  The company's Shipping and Weighing  division  is
experiencing competition from carrier automation initiatives.  The  company
is addressing competitive pressures in this market with the introduction of
a  new  line of comunications-capable low-volume shipping systems in  early
1995.  PBMS, a market leader in providing mail and related support services
to  the  corporate, financial services, and professional services  markets,
competes  against  national,  regional  and  local  firms  specializing  in
facilities  management.  The company believes that its long experience  and
reputation  for  product  quality,  and  its  sales  and  support   service
organizations  are important factors in influencing customer  choices  with
respect to its products and services.

The  financing  business is highly competitive  with  aggressive  rate
competition.   Leasing companies, commercial finance companies,  commercial
banks and other financial institutions compete, in varying degrees, in  the
several markets in which the finance operations do business and range  from
very  large,  diversified financial institutions to many small, specialized
firms.   In  view of the market fragmentation and absence of  any  dominant

competitors  which  result from such competition, it  is  not  possible  to
provide  a  meaningful  description of the finance operations'  competitive
position in these markets.

The  company's discontinued operations, Dictaphone and  Monarch,  have
historically  been leading suppliers of certain products  and  services  in
their  businesses,  particularly price marking supplies and  equipment  and
voice processing systems.

Research and Development/Patents.  The company has research and development
programs  that  are directed towards developing new products and  improving
the  economy and efficiency of its operations, including its production and
service  methods.  Expenditures on research and development  totaled  $78.6
million,  $80.9  million  and  $85.0  million  in  1994,  1993  and   1992,
respectively.

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

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

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

The company is subject to federal, state and local laws and regulations
concerning   the   environment,   and   is   currently   participating   in
administrative or court proceedings as a participant in various  groups  of
potentially  responsible parties.  These proceedings are at various  stages
of  activity, and it is impossible to estimate with any certainty the total
cost of remediation, the timing and extent of remedial actions which may be
required  by governmental authorities, and the amount of the liability,  if
any,  of  the  company.  If and when it is possible to  make  a  reasonable
estimate  of  the  company's liability with respect to  such  a  matter,  a
provision would be made as appropriate.  Based on the facts presently known
to  it,  the company does not believe that the outcome of these proceedings
will have a material adverse effect on its financial condition.

Employee Relations.  At December 31, 1994, 32,792 persons were employed  by
the  company, 26,990 in the United States, 5,802 outside the United States.
Of  this  total  5,457  were employed by Monarch and Dictaphone.   Employee
relations  are considered to be very satisfactory.  The great  majority  of
employees  are not represented by any labor union.  Management follows  the
policy  of keeping employees informed of its decisions, and encourages  and
implements employee suggestions whenever practicable.

Item 2.  Properties

The company's World Headquarters and certain other office and manufacturing
facilities  are  located in Stamford, Connecticut.  The  company  maintains
research  and  development  operations  at  a  corporate  engineering   and
technology  center in Shelton, Connecticut.  A sales and  service  training
center  is  located near Atlanta, Georgia.  The company is building  a  new
facility  to  house its Shipping and Weighing Systems Division in  Shelton,
Connecticut,  which  is  expected to be completed  in  1995.   The  company
believes  that  its  current and planned manufacturing, administrative  and
sales  office properties are adequate for the needs of both of its business
segments.

Business  Equipment and Services.  Business equipment and services products
are  manufactured in a number of plants principally in Connecticut, as well
as  in Harlow, England.  Most of these facilities are owned by the company.
Sales  and support services offices, substantially all of which are leased,
are  located  throughout  the  United States  and  in  a  number  of  other
countries.

The   company's  Pitney  Bowes  Management  Services  subsidiary   is
headquartered in Stamford, Connecticut and leases facilities in  27  cities
located  throughout  the  U.S.  as well as leased  facilities  in  Toronto,
Ontario, Canada and London, England.

Financial  Services.  Pitney Bowes Credit Corporation leases executive  and
administrative offices in Norwalk, Connecticut; Jacksonville, Florida;  and
Tualatin,  Oregon.  Executive and administrative offices of  the  financing
operations  outside  the United States are maintained in  London,  England;
Heppenheim, Germany; Paris, France; Mississauga, Ontario, Canada; and North
Ryde,  Australia.  A number of leased regional and district  sales  offices
are located throughout the U.S., Canada and Germany.

The  company's discontinued operations, Dictaphone and Monarch,  have
production  facilities  in  Melbourne, Florida; Dayton,  Ohio;  Killwangen,
Switzerland;  Pickering,  Ontario, Canada;  Mexico  City,  Mexico;  Sydney,
Australia; Singapore and Hong Kong.  Most of these facilities are owned  by
the company.  Sales and support service offices, substantially all of which
are  leased,  are located throughout the United States and in a  number  of
other countries.

Item 3. Legal Proceedings

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

The company has been advised that the Antitrust Division of the United
States  Department  of Justice is conducting a civil investigation  of  its
postage equipment business to determine whether there is, has been, or  may
be  a  violation  of  the surviving provisions of the 1959  consent  decree
between  the  company  and  the U.S. Department  of  Justice,  and  or  the
antitrust  laws.   The company intends to cooperate with  the  Department's
investigation.

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

None.

Executive Officers of the Registrant

Executive
Officer
Name         Age  Title                                   Since

George B. Harvey    63   Chairman, President and Chief            1967
Executive Officer

Carmine F. Adimando 50   Vice President - Finance and             1982
Administration, and Treasurer

Marc C. Breslawsky  52   Vice-Chairman                            1985

Michael J. Critelli 46   Vice-Chairman                            1988

Steven J. Green     43   Vice President - Controller              1988

Douglas A. Riggs    50   Vice President - Communications,         1988
Planning, Secretary and General Counsel

Carole F. St. Mark  52   President and Chief Executive Officer -  1985
Pitney Bowes Business Services

Johnna G. Torsone   44   Vice President - Personnel               1993

There is no family relationship among the above officers, all of whom  have
served  in  various  corporate, division or subsidiary positions  with  the
company  for  at  least the past five years except for Johnna  G.  Torsone.
Prior  to  joining the company in October 1990, Ms. Torsone was  a  partner
with  the  New York law firm of Parker, Chapin, Flattau & Klimpl where  she
practiced employment and labor law for 14 years.

PART II

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

The sections entitled "Stock Information" and "Stock Exchanges" on page  44
of   the  Pitney  Bowes  Inc.  1994  Annual  Report  to  Stockholders   are
incorporated  herein by reference.  At December 31, 1994, the  company  had
31,226 common stockholders of record.

Item 6.  Selected Financial Data

The section entitled "Summary of Selected Financial Data" on page 28 of the
Pitney Bowes Inc. 1994 Annual Report to Stockholders is incorporated herein
by reference.

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

The section entitled "Management's Discussion and Analysis" on pages 21  to
27  of  the  Pitney  Bowes  Inc.  1994 Annual  Report  to  Stockholders  is
incorporated  herein  by  reference, except for  the  section  on  page  27
relating to "Dividend Policy."

Item 8.  Financial Statements and Supplementary Data

The  financial  statements,  together with  the  report  thereon  of  Price
Waterhouse LLP dated January 31, 1995, appearing on pages 29 to 42  of  the
Pitney  Bowes  Inc.  1994  Annual Report to Stockholders  are  incorporated
herein by reference.

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

None.
PART III

Item 10. Directors and Executive Officers of the Registrant

Except for the information regarding the company's executive officers  (see
"Executive  Officers of the Registrant" on page 8), the information  called
for  by  this  Item  is incorporated herein by reference  to  the  sections
entitled  "Election of Directors" and "Security Ownership of Directors  and
Executive  Officers" on pages 2 to 5 and 7 and 8 of the Pitney  Bowes  Inc.
Notice of the 1995 Annual Meeting and Proxy Statement.

Item 11. Executive Compensation

The   sections  entitled  "Directors'  Compensation",  "Executive   Officer
Compensation", "Severance and Change of Control Arrangements" and  "Pension
Benefits"  on pages 8 to 14, and 18 to 20 of the Pitney Bowes Inc.   Notice
of  the 1995 Annual Meeting and Proxy Statement are incorporated herein  by
reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The  section  entitled  "Security  Ownership  of  Directors  and  Executive
Officers"  on  pages 7 and 8 of the Pitney Bowes Inc. Notice  of  the  1995
Annual Meeting and Proxy Statement is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

None.
PART IV

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

(a)                1.   Financial  statements - see Item 8 on  page  9  and
"Index to Financial Statements and Schedules" on
page 16.

2.   Financial  statement  schedules  -  see  "Index  to
Financial Statements and Schedules" on page 16.

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

Reg. S-K                                     Status or Incorporation
Exhibit        Description                         by Reference

(3)(a)   Restated   Certificate    Incorporated  by  reference  to  Exhibit
of  Incorporation,  as    (3a)  to  Form  10-K as filed  with  the
amended                   Commission    on   March    30,    1993.
(Commission file number 1-3579)

(b)   By-laws                   Incorporated  by  reference  to  Exhibit
(1)  to  Form  8-K  as  filed  with  the
Commission    on   March    13,    1993.
(Commission file number 1-3579)

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

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

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

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

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

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

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

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

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

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

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

Executive Compensation Plans:

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

(b)  Deferred   Compensation    Incorporated  by  reference  to   Exhibit
Plan for Directors         (10b)  to  Form  10-K as filed  with  the
Commission    on    March    30,    1993.
(Commission file number 1-3579)

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

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

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

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

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

(11)   Statement                  Exhibit (i)
re computation of per
share earnings

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

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

(21)   Subsidiaries of the        Exhibit (iv)
registrant

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

(27)   Financial Data Schedule    Exhibit (vi)

(b)  No  reports  on  Form  8-K were filed for the  three  months  ended
December 31, 1994.

SIGNATURES

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

Pitney Bowes Inc.

By /s/ George B. Harvey
(George B. Harvey)
Chairman, President and Chief
Executive Officer

Date March 30, 1995

SIGNATURES

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

Signature               Title                        Date

/s/ George B. Harvey    Chairman, President          March 30, 1995
George B. Harvey        and Chief Executive
Officer - Director

/s/ Carmine F. Adimando Vice President-Finance       March 30, 1995
Carmine F. Adimando     and Administration, and
Treasurer (principal
financial officer)

/s/ Steven J. Green     Vice President-Controller    March 30, 1995
Steven J. Green         (principal accounting
officer)

/s/ Linda G. Alvarado   Director                     March 30, 1995
Linda G. Alvarado

/s/ Marc C. Breslawsky  Director                     March 30, 1995
Marc C. Breslawsky

/s/ William E. Butler   Director                     March 30, 1995
William E. Butler

/s/ Colin G. Campbell   Director                     March 30, 1995
Colin G. Campbell

/s/ Michael J. Critelli Director                     March 30, 1995
Michael J. Critelli

/s/ John C. Emery, Jr.  Director                     March 30, 1995
John C. Emery, Jr.

Signature               Title                        Date

/s/ Charles E. Hugel    Director                     March 30, 1995
Charles E. Hugel

/s/ David T. Kimball    Director                     March 30, 1995
David T. Kimball

Director
Leroy D. Nunery

/s/ Phyllis S. Sewell   Director                     March 30, 1995
Phyllis S. Sewell

Director
Arthur R. Taylor

INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

The  additional  financial  data should be read  in  conjunction  with  the
financial  statements  in  the Pitney Bowes  Inc.  1994  Annual  Report  to
Stockholders.   Schedules not included with this additional financial  data
have  been  omitted  because  they  are  not  applicable  or  the  required
information  is shown in the financial statements or notes thereto.   Also,
separate  financial  statements of less than 100 percent  owned  companies,
which  are  accounted for by the equity method, have been  omitted  because
they do not constitute significant subsidiaries.

ADDITIONAL FINANCIAL DATA

Page
Pitney Bowes Inc.:

Report of independent accountants on financial
statement schedules                                       17

Financial statement schedules for the years 1992 - 1994:

Valuation and qualifying accounts and
reserves (Schedule II)                               18

REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES

To the Board of Directors
of Pitney Bowes Inc.

Our  audits  of the consolidated financial statements referred  to  in  our
report dated January 31, 1995 appearing on page 42 of the Pitney Bowes Inc.
1994 Annual Report to Stockholders (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form  10-
K)  also included an audit of the financial  statement  schedules listed by
reference  in  Item  14(a)2  of  this Form 10-K.   In  our  opinion,  these
financial   statement schedules present fairly, in all  material  respects,
the information set forth therein when read in conjunction with the related
consolidated financial statements.

/s/Price Waterhouse LLP
Price Waterhouse LLP

Stamford, Connecticut
January 31, 1995

PITNEY BOWES INC.

SCHEDULE II - VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES

FOR THE YEARS ENDED DECEMBER 31, 1992 TO 1994

(Dollars in thousands)

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

Allowance for doubtful accounts

1994               $16,691      $ 4,262     $ 4,044(2)    $ 16,909

1993               $16,578      $ 9,024(1)  $ 8,911(2)    $ 16,691

1992               $17,786      $ 4,364     $ 5,572(2)    $ 16,578

Allowance for credit losses on finance receivables

1994               $116,512     $64,933     $68,354(2)    $113,091

1993               $ 96,975     $84,524     $64,987(2)    $116,512

1992               $ 88,703     $85,642     $77,370(2)    $ 96,975

Reserve for transition costs(4)

1994               $   344      $93,258     $28,709(5)    $ 64,893

1993               $ 1,627      $     -     $ 1,283(3)    $    344

1992               $ 8,835      $     -     $ 7,208(3)    $  1,627

Valuation allowance for deferred tax asset(4)

1994               $25,975      $12,867     $ 1,310       $ 37,532

1993               $28,800      $ 2,059     $ 4,884       $ 25,975

1992               $     -      $29,365     $   565       $ 28,800

<FN>
(1)  Includes $1,300 of additions applicable to a business at acquisition.
(2)  Principally uncollectible accounts written off.
(3)  Amounts paid.
(4)  Included in balance sheet as a liability.
(5)  Includes amounts for asset write downs and amounts paid.

PITNEY BOWES INC.          EXHIBIT (i)
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS

(Dollars  in  thousands, except share data)                  Years  Ended December 31,
1994        1993(1)     1992(1)     1991(1)      1990(1)

Primary
Income from continuing operations(2)      $   348,428  $  305,690 $   260,736 $   242,649  $   159,155
Discontinued operations                        45,161      47,495      54,129      52,648       54,137
Effect of accounting changes                 (119,532)          -    (214,631)          -            -
Net income                                $   274,057  $  353,185 $   100,234 $   295,297  $   213,292

Weighted average number of common shares
outstanding                              156,459,437 157,766,700 157,562,020 158,180,010  157,379,940
Preference stock, $2.12
cumulative convertible                       847,430     905,231   1,085,684   1,386,566    1,613,714
Stock option and purchase plans               421,761     696,721     581,782     371,838      232,180
Convertible loan stock                              -           -       5,926      16,266       23,926
Total common and common equivalent shares
outstanding                              157,728,628 159,368,652 159,235,412 159,954,680  159,249,760

Income per common and common equivalent share - primary:
Continuing operations                    $      2.21  $     1.92 $      1.64 $      1.52  $      1.00
Discontinued operations                          .29         .30         .34         .33          .34
Effect of accounting changes                    (.76)          -       (1.35)          -            -
Net income                               $      1.74  $     2.22 $       .63 $      1.85  $      1.34
Fully Diluted
Income from continuing operations(2)      $   348,430  $  305,694 $   260,740 $   242,653  $   159,163
Discontinued operations                        45,161      47,495      54,129      52,648       54,137
Effect of accounting

changes                 (119,532)          -    (214,631)          -            -
Net income                                $   274,059  $  353,189 $   100,238 $   295,301  $   213,300

Weighted average number of common shares
outstanding                              156,459,437 157,766,700 157,562,020 158,180,010  157,379,940
Preference stock, $2.12
cumulative convertible                       847,430     905,231   1,085,684   1,386,566    1,613,714
Stock option and purchase plans               439,756     706,981     606,915     410,102      245,294
Convertible loan stock                              -           -       5,926      16,266       23,926
Preferred stock, 4% cumulative convertible     14,265      23,464      26,409      28,930       37,862
Convertible debentures                              -           -           -           -       15,800
Total common and common equivalent shares
outstanding                              157,760,888 159,402,376 159,286,954 160,021,874  159,316,536

Income per common and common equivalent share - fully diluted:
Continuing operations                    $      2.21  $     1.92 $      1.64 $      1.52  $      1.00
Discontinued operations                          .29         .30         .34         .33          .34
Effect of accounting changes                    (.76)          -       (1.35)          -            -
Net income                               $      1.74  $     2.22 $       .63 $      1.85  $      1.34
<FN>
(1) Reclassified to reflect discontinued operations.
(2) Income from continuing operations was adjusted for preferred dividends  and
interest on convertible debt.

PITNEY BOWES INC.                  EXHIBIT (ii)

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (1)

(Dollars in thousands)

Years Ended December 31,

1994      1993(2)   1992(2)   1991(2)   1990(2)

Income from continuing
operations before
income taxes         $566,507  $498,860  $411,954  $388,997  $248,567

Add:
Interest expense      194,115   189,292   230,764   257,595   263,340
Portion of rents
representative of
the interest factor   42,339    33,842    33,786    32,503    29,554
Amortization of
capitalized interest     914       914       914       914       849

Income as adjusted    $803,875  $722,908  $677,418  $680,009  $542,310

Fixed charges:
Interest expense     $194,115  $189,292  $230,764  $257,595  $263,340
Capitalized interest      733         -         -         -     1,567
Portion of rents
representative of
the interest factor   42,339    33,842    33,786    32,503    29,554

$237,187  $223,134  $264,550  $290,098  $294,461
Ratio of earnings to
fixed charges            3.39      3.24      2.56      2.34      1.84

<FN>
(1) The  computation  of the ratio of earnings to fixed  charges  has  been
computed  by  dividing income from continuing operations before  income
taxes  and  fixed charges by fixed charges.  Included in fixed  charges
is  one-third  of  rental  expense as  the  representative  portion  of
interest.

(2) Reclassified to reflect discontinued operations.

MANAGEMENT'S DISCUSSION AND ANALYSIS

Segments
................................................................................

Pitney Bowes operates within two industry segments: business equipment and
services and financial services.

Business equipment and services includes: postage meters and mailing, shipping
and facsimile systems, copiers and copier supplies, and mailroom, reprographics
and related facilities management services.

The financial services segment includes the worldwide financing operations of
the company. This segment provides lease financing for the company's products as
well as other financial services for the commercial and industrial markets.

Dictaphone Corporation (Dictaphone) and Monarch Marking Systems, Inc.
(Monarch) subsidiaries have been classified as discontinued operations and are,
therefore, excluded from the following segment data. (See Note 11 to the
consolidated financial statements.)

Revenue and operating profit by business segment and geographic area for the
years 1992 to 1994 were as follows:

Revenue
--------------------------
(in millions)             1994     1993*    1992*
-------------------------------------------------

Industry segments:
Business equipment
and services        $2,586   $2,386   $2,255
Financial services       685      614      633
------------------------------------------------
Total                   $3,271   $3,000   $2,888
================================================
Geographic areas:
United States         $2,851   $2,550   $2,355
Europe

293      303      351
Canada and other         231      251      262
Inter-area revenue      (104)    (104)     (80)
------------------------------------------------
Total                   $3,271   $3,000   $2,888
================================================

Operating profit
------------------------
(in millions)             1994     1993*    1992*
-------------------------------------------------

Industry segments:
Business equipment
and services         $ 425    $ 371    $ 319
Financial services       227      209      201
------------------------------------------------
Total                    $ 652    $ 580    $ 520
================================================
Geographic areas:
United States          $ 655    $ 524    $ 459
Europe                   (13)      28       25
Canada and other          19       33       38
Inter-area profit         (9)      (5)      (2)
------------------------------------------------
Total                    $ 652    $ 580    $ 520
================================================

*Reclassified to reflect discontinued operations.

Identifiable assets by business segment and geographic area for the years 1992
to 1994 were as follows:

Identifiable assets
-------------------------
(in millions)             1994     1993*    1992*
-------------------------------------------------

Industry segments:
Business equipment
and services        $1,978   $1,901   $1,665
Financial services     4,897    4,441    4,352
------------------------------------------------
Total                   $6,875   $6,342   $6,017
================================================
Geographic areas:
United States         $6,317   $5,743   $5,103
Europe                   331      389      493
Canada and other         433      476      610
------------------------------------------------
Total                   $7,081   $6,608   $6,206
================================================

*Reclassified to reflect discontinued operations.

Events Impacting Comparability
................................................................................

The company adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (FAS 112), as of January 1,
1994. FAS 112 required that postemployment benefits be recognized on the accrual
basis of accounting. Postemployment benefits include primarily company provided
medical benefits to disabled employees and company provided life insurance as
well as other disability- and death-related benefits to former or inactive
employees, their beneficiaries and covered dependents.

The one-time effect of adopting FAS 112 was a non-cash, after-tax charge of
$119.5 million (net of approximately $80.5 million of income taxes), or 76 cents
per share. Additional information with respect to accounting for postemployment
benefits is disclosed in note 10 to the consolidated financial statements.

Based on an extensive strategic review on how best to capitalize on its
strengths and competitive position, the company determined to concentrate its
energies and resources on products and services which facilitate the
preparation, organization, movement, delivery, tracking, storage and retrieval
of documents, packages, letters and other materials, in hard copy and digital
form for its customers. Accordingly, in the third quarter of 1994, the company
announced its intent to seek buyers for its Dictaphone and Monarch subsidiaries.
The sales of Dictaphone and Monarch are expected to result in gains at closings
which are expected to occur in 1995. Dictaphone and Monarch have been classified
in the Consolidated Statement of Income as discontinued operations; revenue and
income from continuing operations exclude the results of Dictaphone and Monarch
for all periods presented.

With the fourth quarter 1993 acquisition of Ameriscribe Corporation
(Ameriscribe), the company continued the expansion of its facilities management
business. Ameriscribe, a nationwide provider of on-site reprographics, mailroom
and other office services to industrial corporations and professional service
firms on a contract basis, was integrated with the com-

21

pany's mailroom management organization. The transaction was accounted for by
the purchase method. See note 11 to the consolidated financial statements.

The Omnibus Budget Reconciliation Act of 1993 (the Tax Act), enacted August
10, 1993, increased U.S. corporate income tax rates from 34 percent to 35
percent, retroactive to January 1, 1993. The liability method of accounting for
income taxes requires the effect of the change in tax laws or rates on current
earnings and accumulated deferred income taxes to be reflected in the period
when the new legislation is enacted. Consequently, the company recorded $22.0
million of additional taxes against 1993 income from continuing operations ($5.4
million on 1993 earnings and $16.6 million on deferred taxes).

In the fourth quarter of 1992, the company adopted retroactively to January 1,
1992, Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" (FAS 106), which
addresses health care and other welfare benefits provided to retirees. FAS 106
required a change from the cash basis of accounting to the accrual basis of
accounting for nonpension postretirement benefits. The transition effect of
adopting this standard on the immediate recognition basis, which was recorded in
the first quarter of 1992, was a one-time, after-tax charge of $215 million or
$1.35 per share; the 1992 incremental after-tax costs on 1992 income from
continuing operations amounted to $14 million or $.09 per share. In early 1993,
the company announced several changes to its health care plans which have
significantly reduced the ongoing incremental impact of FAS 106 on earnings.
Among these changes was the establishment of plan cost maximums in order to more
effectively control future medical costs. Additional information with respect to
accounting for nonpension postretirement benefits is disclosed in note 10 to the
consolidated financial statements.

In 1992, the company sold its Wheeler Group Inc. (Wheeler) subsidiary, a
direct mail marketer of office supplies. The sale of Wheeler for approximately
$80 million in cash resulted in a $2.7 million after-tax gain. Wheeler has been
classified in the Consolidated Statement of Income as a discontinued operation;
revenue and income from continuing operations exclude the results of Wheeler for
all periods presented.

Results of Continuing Operations
................................................................................

Revenue increased nine percent in 1994 primarily as a result of growth in the
U.S. operations, especially in the facilities management, mailing, financial
services and facsimile businesses as well as improved performance in the United
Kingdom. Favorable foreign currency impacts in the U.K. and Germany were mostly
offset by a weakening Canadian dollar. Growth was slowed by unfavorable
performances in Germany and in the low-end shipping market in the U.S. In 1993,
revenue increased four percent as a result of growth in the mailing, shipping
and facilities management businesses in the U.S. Revenue growth in 1993 was
slowed by sluggish economies worldwide, particularly in Germany, Canada and the
U.K., as well as significant unfavorable foreign currency impacts in these
countries. Additionally, revenue growth in both 1994 and 1993 was depressed by
the company's first-quarter 1993 decision to phase out the business of financing
non-Pitney Bowes equipment outside of the U.S. Income per share from continuing
operations increased 15 percent to $2.21 per share in 1994 compared with a 17
percent increase to $1.92 per share in 1993. In 1994 income from continuing
operations included the effect of a nonrecurring $25.4 million pretax credit.
The credit was the result of a $118.6 million credit to income due to changes
made in certain postemployment benefits offset, in part, by a $93.2 million
charge to income covering strategic actions. This net credit added only $3.5
million, or two cents per share to income from continuing operations because
some of the strategic actions were taken in countries where the company is
unable to recognize associated tax benefits. In 1993, income from continuing
operations was impacted by the enactment of the Tax Act as outlined in the
Events Impacting Comparability section above. Excluding the effect of the
nonrecurring net credit in 1994 and the impact of the Tax Act on deferred taxes
in 1993, income per share from continuing operations would have been eight
percent above the prior year. Excluding the impact of the Tax Act on 1993
earnings and deferred taxes, income per share from continuing operations in 1993
was $2.06 per share, an increase of 26 percent over 1992.

Sales revenue, all of which is generated by the business equipment and
services segment, increased 11 percent in 1994 and 10 percent in 1993. The 1994
increase was driven by aggressive expansion of the facilities management
contract base, including the late 1993 acquisition of Ameriscribe, strong growth
in sales of facsimile supplies to support the growing plain-paper equipment base
and copier and production mail product placements in the U.S., as well as strong
mailing equipment sales in the U.K. These growth factors were partly offset by
greater revenue in 1993 from PROM (memory chip) and scale chart sales resulting
from parcel and postal rate changes in the U.S. and 1994 sales declines in
Germany and the U.S. shipping business. The unfavorable comparison in the U.S.
shipping business, particularly in the low-volume segment was due principally to
enhanced 1993 revenue due to special marketing programs as well as increased
competitive pressure from carrier automation initiatives in 1994. The company is
addressing competitive pressures in this market with the introduction of a new
line of communications-capable low-volume shipping systems in early 1995. In
Germany, 1993 record results included sales for equipment upgrades necessitated
by consolidation of the East and West German postal zones. Additionally, the
decision in the third quarter 1994 to phase out sales of non-mailing products as
part of the company's formal plan of strategic refinement negatively impacted
sales revenue. In 1994, both price increases and foreign currency impacts had
less than a one percent favorable impact on sales growth. The 1993 increase
included strong growth in mailing, shipping, copier and facsimile product
placements in the U.S. Sales growth in 1993 was partly offset by significant
unfavorable foreign currency impacts, as well as price declines

22

on certain shipping, facsimile and copier equipment. Foreign currency impacts
lowered 1993 sales growth outside the U.S., primarily in the U.K., Canada and
Germany by 10 percent. Strong sales revenue growth from continued expansion of
the company's facilities management business including the late 1993 acquisition
of Ameriscribe contributed to the increase.

Rentals and financing revenue, included in both the business equipment and
services and financial services segments, increased ten percent in 1994 compared
with a one percent decrease in 1993. While foreign exchange impacts in 1994 were
not significant, if foreign currency impacts primarily attributable to weakening
of the British pound, Canadian dollar and German mark are excluded, rentals and
financing revenue increased one percent in 1993.

Rental revenue increased nine percent and four percent in 1994 and 1993,
respectively. These increases, particularly in 1994 are due to mailing price
increases, higher numbers of postage meters on rental, including a greater mix
of higher-yielding Postage By Phone(R) and electronic meters in service, as well
as a greater mix of plain paper facsimile equipment placements partly offset, in
1993, by the unfavorable foreign currency impacts noted above.

Financing revenue increased 11 percent in 1994, reflecting a greater
contribution from sales of finance assets than in 1993, and included the sale of
operating lease assets which generated approximately $45 million in revenue.
Financing revenue also benefited from portfolio growth, increased leveraged
lease revenue and fee-based income partly offset by lower lease rates and the
decision to phase out the business of financing non-Pitney Bowes equipment
outside of the U.S.

Financing revenue decreased three percent in 1993 primarily as a result of the
company's first-quarter decision to phase out the business of financing non-
Pitney Bowes equipment outside of the U.S. As part of this strategy, the company
sold approximately $120 million of external finance assets in Canada in the
second quarter of 1993. Financing revenue also decreased as a result of
unfavorable revenue impacts associated with a partnership lease transaction
(discussed below).

Support services revenue which is derived from the business equipment and
services segment, declined slightly in 1994 and was up one percent in 1993. In
1994, a decline in the non-U.S. mailing equipment service base and a shift in
mix of shipping service agreements to low-volume products were mostly offset by
price increases on mailing contracts. The increase in 1993 was primarily due to
price increases, as well as the continued expansion of the inserter, shipping
and facsimile service bases. In 1993, these increases were partly offset by
negative foreign currency swings and a decline in the copier and non-U.S.
mailing equipment service agreement bases.

The cost of sales to sales revenue ratio increased to 58.4 percent in 1994
from 55.2 percent in 1993 and 54.6 percent in 1992. The ratio increases were due
to the growing significance of the company's facilities management business
which includes most of its expenses in cost of sales, particularly in 1994 due
to the full year impact of the Ameriscribe acquisition. In 1994 and 1993,
increased engineering support of the company's many new products, reduced
margins on certain of the company's mailing, shipping and facsimile products
and, in 1994, unfavorable LIFO expense negatively impacted these ratios. These
factors were partly offset by favorable LIFO effects in 1993 and 1992 and
improved margins at the company's facilities management and copier operations
for all periods and, in 1992, in the company's German business equipment
operation. Results in 1993 also benefited from high-margin PROM and scale chart
sales. The company believes that its facilities management business will
continue to increase through growth in the contract base and, as a result, the
cost of sales to sales revenue ratio is also expected to increase further.

The cost of rentals and financing to rentals and financing revenue ratio was
32.3 percent in 1994, 31.7 percent in 1993, and 30.7 percent in 1992. The
increase in 1994 resulted from increased asset sale activity, including the
sales of lower-margin operating lease assets with a cost of $42.6 million
offset, in part, by favorable mailing rental equipment margins in the U.S. The
increase in 1993 reflects the increased credit loss provision established in the
financial services segment during the year which included an approximately $14
million second-quarter charge for potential losses in Germany. The growing
impact of amortization of purchased mortgage servicing rights associated with
the company's mortgage servicing subsidiary also increased the cost ratio in all
periods.

Selling, service and administrative expenses as a percentage of revenue were
35.7 percent in 1994, 37.3 percent in 1993 and 39.2 percent in 1992. The ratios
benefited from lower relative expenses related to the facilities management
business particularly in 1994, after the Ameriscribe acquisition, effective
management of overall U.S. employee benefit costs and continued cost containment
programs throughout the company. Also, 1994 benefited from a patent royalty
settlement and a special cash payment pursuant to a corporate reorganization of
the acquirer of Wheeler. In 1993, expense reductions resulted from the
establishment of retiree medical coverage maximums. In 1992, however, this ratio
was unfavorably impacted by $22 million due to the adoption of the accounting
standard for nonpension postretirement benefits which largely offset the
favorable impact of the company's cost reduction programs in that year.

Research and development expenses declined three percent in 1994 and five
percent in 1993. These declines were caused by the completion of the primary
development cycle for certain of the company's major new mailing products, with
the most significant new products launched in 1992. These products currently use
ongoing engineering support to improve functionality and increase manufacturing
efficiencies. This support is recorded in cost of sales. In addition, the
company has maintained its cost containment programs while continuing to
significantly invest in new product development focusing on electronic
technology and software development.

23

Net interest expense increased six percent in 1994 while decreasing 19 percent
in 1993. In 1994 the increase was due to higher short-term interest rates and
average borrowing levels. Increased borrowing levels were used primarily to fund
treasury stock repurchases and investments in finance assets. It is anticipated
that this unfavorable comparison will continue if interest rates continue to
rise. In 1993, the decline in interest expense resulted from lower short- and
long-term interest rates on the company's debt as well as a gradual shift in
borrowings to lower interest bearing short-term notes payable. On a swap
adjusted basis, the ratio of notes payable to the sum of notes payable and long-
term debt was 58 percent in 1994 compared to 57 percent in 1993. The company's
practice is to manage its interest rate risk, most of which is in the financial
services segment, through the use of a balanced mix of debt maturities,
variable- and fixed-rate debt and interest rate swap agreements.

In 1994, as noted above, a net nonrecurring credit of $25.4 million resulted
from a $118.6 million credit to income for changes made to certain
postemployment benefits and the decision to undertake certain strategic actions
which resulted in a $93.2 million charge to income.

Since the first quarter of 1994, as part of the company's employee work-life
initiatives, employee input was actively sought about benefits, and it was
concluded that employees prefer benefits more closely related to their changing
work-life needs. As a result, in the third quarter of 1994, the company
significantly reduced or eliminated certain postemployment benefits,
specifically service-related company-subsidized life insurance, salary
continuance and medical benefits, resulting in a pre-tax credit to income of
$118.6 million ($70.9 million net of approximately $47.7 million of income
taxes). 1994 postemployment benefit expense was not materially effected by the
net impact of the adoption of FAS 112 discussed in Events Impacting
Comparability above and these benefit changes, nor is ongoing postemployment
benefit expense expected to be materially affected. As a further outgrowth of
the above study, the company also instituted, effective January 1, 1995, certain
enhancements to its deferred investment plan, including an increase in the
company's match of employee contributions.

Secondly, during the third quarter of 1994, the company adopted a formal plan
designed to address the impact of technology on work force requirements and to
further refine its strategic focus on core businesses worldwide. The company
recorded a $93.2 million charge to income to cover the costs of such actions.
The charge includes $61 million of severance and benefit costs for work force
reductions, $22 million of asset write downs and $10 million of other exit
costs. All but the asset write downs will result in cash outlays.

The phase-out of older product lines, introduction of new, advanced products
and increased need for higher employee skill levels to deliver and service these
products will require a work force reduction of approximately 2,000 employees
worldwide over the coming year, and the future hiring of approximately 850 new
employees with these requisite enhanced skills. All costs associated with hiring
of new employees were excluded from the charge and will be recognized
appropriately in the period incurred.

Current and future advanced product offerings require a smaller, but more
highly skilled engineering, manufacturing and service work force to take full
advantage of design, production, diagnostic and service strategies. These
disciplines account for a work force reduction of more than 850 employees and
will require severance and benefit costs of $27 million. Other strategic actions
include reengineering and streamlining of order flow, logistics and other
administrative processes in the U.S., Europe and the Asia Pacific region which
will result in an additional work force reduction of more than 800 employees
requiring severance and benefit costs of $22.7 million. The decisions to phase
out non-mailing products in Germany and the cessation of further development and
marketing of shipping products which cannot be cost-effectively upgraded to new
technologies will account for the remaining work force reductions and related
severance and benefit costs.

As noted above, included in the plan to refine the strategic business focus of
the company are asset write downs of $22 million and $10 million of other exit
costs for certain additional actions. Consistent with a refinement of focus on
our core businesses, these actions include phasing out non-mailing products in
Germany. This decision requires the write down of inventories, lease and rental
contracts and other assets to their net realizable value for which $7.4 million
has been provided. The decision to cease development and marketing of certain
shipping products as noted above also resulted in inventory and other asset
write-offs of $8.6 million. The company has decided to transition a software-
based business with its own product offerings to a limited product development
and marketing support function. As a result, $6.3 million of goodwill related to
the acquisition of this business has been written-off. The $10 million of other
exit costs are primarily due to the adoption of a centralized organizational
structure in the European financial services businesses that will result in the
early termination of a facility lease.

As of December 31, 1994 the company had made severance and benefit payments of
$3.4 million to approximately 200 employees separated under the strategic focus
initiatives.

Benefits from the strategic focus initiatives (primarily reduced employee
expense) will be offset, in part, by increased hiring and training expenses to
obtain employees with requisite skills. Anticipated net cash savings in 1995 and
1996 approximate $20 million and $30 million, respectively.

Industry segment operating profit reflects the factors discussed above and in
the Financial Services discussion below. Operating profit of the business
equipment and services segment increased 14 percent in 1994 compared to 17
percent in 1993. Excluding the impact of nonrecurring items, in 1994, operating
profit increased five percent reflecting strong performances by the mailing,
facsimile, copier and facilities management businesses in the U.S. partly offset
by weaknesses in the shipping business in the U.S. and the Canadian and German
mailing operations.

24

The 1993 results compared favorably to 1992 which included an incremental cost
for the adoption of the accounting standard for nonpension postretirement
benefits. Excluding the effect of the accounting change, operating profit of
this segment increased 10 percent in 1993, reflecting strong performances by the
mailing, shipping, copier, facsimile and facilities management businesses in the
U.S., partly offset by weaknesses in the Canadian and European mailing
operations.

Operating profit in the financial services segment increased nine percent in
1994 compared to four percent in 1993. Operating profit growth in 1994 benefited
from lower relative credit loss provisions offset, in part, by lower lease
rates, increasing interest rates and a lower contribution from finance asset
sales. In 1993, operating profit growth benefited from a lower interest rate
environment partly offset by commensurately lower new lease rates and increased
relative credit loss provisions. Both 1994 and 1993 were unfavorably impacted by
the decision to phase out the external financing business outside of the U.S.

The effective tax rate was 38.5 percent in 1994, 38.7 percent in 1993 and 36.7
percent in 1992. The 1994 effective tax rate includes the impact of
approximately $28 million of strategic actions for which the company could not
realize associated tax benefits offset, in part, by higher levels of tax exempt
income and research and development tax credits. The 1993 effective tax rate
reflects the impacts of the Tax Act discussed in Events Impacting Comparability
above. Excluding the impact of the tax legislation, the effective tax rate for
1993 was 34.3 percent. Further affecting this rate was the tax impact of a
partnership lease transaction and research and development tax credits.

In the fourth quarter of 1994, the company completed the purchase of a lease
portfolio whereby it receives all rights to the value of the underlying
equipment at lease termination and certain tax benefits over the portfolio life.
The transaction will have the effect of reducing the current period tax
liabilities and associated effective tax rates over the portfolio life.

Although not affecting income, deferred translation gains amounted to $6
million in 1994 versus losses of $20 million and $60 million in 1993 and 1992,
respectively. In 1994 the gains resulted primarily from the strengthening of the
British pound. In both 1993 and 1992, losses resulted primarily from the
weakening of the British pound. The Canadian dollar, which weakened in 1992
through 1994, contributed to these impacts.

As part of the company's review of the impacts of technology on its core
businesses and the desire of worldwide postal services to transition to all
electronic postage meters, the estimated service lives of postage meters was
revised effective January 1, 1995. The meter base has been segregated according
to technology content. Mechanical meters, which constitute approximately 60
percent of the meter base, will have their depreciable lives shortened while
electronic meters will have their depreciable lives increased due to better
security, functionality and limited risk of technological obsolescence. These
changes in depreciable lives will be accounted for as a change in accounting
estimate and are not expected to be material to 1995 results of operations.

Financial Services
................................................................................

The financial services operations provide lease financing for Pitney Bowes
products in the U.S., Canada, the U.K., Germany, France and Australia. Since the
first quarter of 1993, the company has continued to phase out the business of
financing non-Pitney Bowes equipment outside the U.S. These actions included the
second quarter 1993 sale of approximately $120 million of finance assets in
Canada. Additionally, in January 1994 Pitney Bowes Credit Corporation (PBCC)
sold approximately $88 million of assets previously transferred from the German
leasing business, in a privately placed transaction with a third-party investor.
This transaction had no material effect on the company's results of operations.

The company has completed its inquiry and evaluation, begun in 1993, of the
assets and liabilities of its German leasing business. At this time, the company
believes that sufficient reserves for credit losses are in place to provide for
currently expected losses. As part of the orderly liquidation of assets from
leasing non-Pitney Bowes products in Germany, the company continues to bill and
collect accounts and repossess and remarket collateral where possible. These
activities are expected to continue for the remainder of the lease terms.

The company is scrutinizing the circumstances surrounding the losses. German
authorities have undertaken criminal proceedings with respect to the conduct of
certain German lessees of non-Pitney Bowes products and, at the request of the
company, with respect to the disposition of the company's German leasing
business assets. These proceedings include the former general manager of the
company's Germany leasing business and others involved in that business. The
principals of one of the company's large German leasing accounts have been
convicted of fraud against the company and others. The company is a party to
certain civil litigation and is continuing its evaluation of additional actions
it can take against former management personnel of its German leasing business
and others.

The company's management continues to believe there are sufficient
opportunities for profitable growth in its domestic external financing business
and plans to make future external investments solely in the U.S. market.

Prior to the first quarter 1993 announcement noted above, the company had
offered financial services to the commercial and industrial markets in the U.S.,
Canada, the U.K., Germany, France and Australia. Condensed financial information
of the company's consolidated finance operations is disclosed in note 15 to the
consolidated financial statements. The finance operations financed 41 percent of
consolidated sales from continuing operations in 1994, 44 percent in 1993 and 43
percent in 1992.

Total financial services revenue amounted to $685 million in 1994 up 11
percent from 1993. Total financial services assets

25

increased to $4.9 billion at year-end 1994, up 10 percent from $4.5 billion in
1993 which was up two percent from $4.4 billion in 1992. To fund finance assets,
borrowings were $3.2 billion in 1994 and $2.9 billion in 1993. Borrowing
requirements for the funding of new business were reduced by the proceeds
received from the sale of approximately $190 million, $160 million and $200
million of finance assets during 1994, 1993 and 1992, respectively. In addition
to the $400 million of borrowings available under shelf registration statements,
the financial services segment had approximately $1.7 billion of unused lines
of credit outstanding at year-end 1994, largely supporting commercial paper
borrowings.

Accounting Changes
................................................................................

In addition to the adoptions of FAS 112 in 1994 and FAS 106 in 1992 as discussed
in Events Impacting Comparability above, the company also adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" (FAS 109)
in 1992, Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities", and Statement of Financial
Accounting Standards No.119, "Disclosure about Derivative Financial Instruments
and Fair Value of Financial Instruments" in 1994. Other than the impacts of FAS
112 and FAS 106 discussed in Events Impacting Comparability above, none of these
statements significantly affected the company's reported results. In May 1993,
Statement of Financial Accounting Standards No. 114, (FAS 114) "Accounting by
Creditors for Impairment of a Loan" was issued. Subsequently in October 1994 an
amendment of FAS 114, Statement of Financial Accounting Standards No. 118,
"Accounting by Creditors for Impairment of a Loan-Income Recognition and
Disclosures" was issued. Both statements must be adopted by January 1, 1995.
Neither of these pronouncements is expected to materially affect the company.

Liquidity and Capital Resources
................................................................................

The current ratio reflects the company's practice of utilizing a balanced mix of
debt maturities to fund finance assets. The current ratio declined to .52 to 1
at December 31, 1994 compared to .59 to 1 at December 31, 1993 as a result of
increased short-term borrowings which funded the repurchase of shares of common
stock, increased investment in finance assets, the redemption of long-term debt
and increased inventory levels. The company enters into interest rate swap
agreements principally through its financial services business segment. It has
been the practice and objective of the company to use a balanced mix of debt
maturities, variable- and fixed-rate debt and interest rate swap agreements to
control its sensitivity to interest rate volatility. The company utilizes
interest rate swap agreements when it considers the economic benefits to be
favorable. Swap agreements, as noted above, have been principally utilized to
fix interest rates on commercial paper and/or obtain a lower cost on debt than
would otherwise be available absent the swap.

The ratio of total debt to the total of such debt and stockholders' equity was
66.3 percent at December 31, 1994, compared to 61.3 percent at December 31, 
1993. This ratio was unfavorably impacted by the company's required first quar- 
ter 1994 adoption of FAS 112, the repurchase of approximately 7.7 million  
shares of common stock for $268 million and increased investment in finance 
assets.  These factors were partially offset by the sale of certain finance 
assets and the strategic decision to phase out the business of financing non-
Pitney Bowes equipment outside of the U.S. as well as the company's strong 
operating cash flow. The shares repurchased in 1994 are in anticipation of 
the sales of Dictaphone and Monarch as well as for issuance under the 
company's stock purchase and option plans. It is expected that the board of 
directors will consider further authorization to repurchase the company's 
common stock in connection with the divestitures as appropriate.

Of the approximately $71 million in cash required to pay severance and benefit
related costs as well as certain other costs related to the company's strategic
refocus actions, $3.4 million was paid out in 1994 with the remaining outlays
expected principally in 1995. Asset write-downs and other provisions of
approximately $22 million included in the strategic refocus did not require cash
expenditures. In addition, the company's financial services business in the U.S.
is required to fund approximately $54 million of additional investment in three
leveraged lease transactions in February 1995.

As part of the company's non-financial services shelf registrations, a medium-
term note facility was established permitting issuance of up to $100 million in
debt securities with maturities ranging from more than one year up to 30 years
on which $32 million remain available at December 31, 1994. The company also has
an additional $300 million remaining on shelf registrations filed with the
Securities and Exchange Commission. In January 1993, the company repaid $100
million of 8.875 percent notes which matured and were previously issued under
these shelf registrations.

PBCC has $400 million available from a $500 million shelf registration
statement filed with the Securities and Exchange Commission. This registration
statement should meet PBCC's long-term financing needs for the next two years.
In March 1994, PBCC issued $200 million of 5.625 percent notes due in February
1997. In April 1994, PBCC redeemed $100 million of 10.65 percent notes due in
April 1999. PBCC had previously sold an option on a notional principal amount of
$100 million to enable a counterparty to require PBCC to pay a fixed rate of
10.67 percent for five years starting April 1, 1994. The counterparty has
exercised that option. In September 1994, PBCC redeemed $100 million of 10.125
percent notes due in 1997.

At year-end 1994, the company had unused lines of credit and revolving credit
facilities totaling $2.2 billion in the U.S. and $108 million outside the U.S.
largely supporting commercial paper borrowings. Amounts available under credit
agreements, shelf registrations and commercial paper and medium-term note
programs, in addition to cash generated internally and by the anticipated sales
of Dictaphone and

26

Monarch, are expected to be sufficient to provide for financing needs in the
next two years. Information with respect to debt maturities is disclosed in note
5 to the consolidated financial statements.

Capital Investment
................................................................................

During 1994, net investments in fixed assets included $126 million in net
additions to property, plant and equipment and $213 million in net additions to
rental equipment and related inventories compared with $96 million and $193
million, respectively, in 1993. These additions included expenditures for normal
plant and manufacturing equipment. In the case of rental equipment, the
additions included the production of postage meters and the purchase of
facsimile and copier equipment for both new placements and upgrade programs.

At December 31, 1994, commitments for the acquisition of property, plant and
equipment reflected plant and manufacturing equipment improvements as well as
rental equipment for new and replacement programs. The company is also building
a new facility to house its Shipping and Weighing Systems Division in Shelton,
Connecticut, which is expected to be completed in 1995.

As previously reported, the company's financial services segment has made
senior secured loans and commitments in connection with acquisition, leveraged
buyout and recapitalization financings. At December 31, 1994, the company had a
total of $2.5 million of such senior secured loans and commitments outstanding
compared to $13.9 million at December 31, 1993. The company has not participated
in unsecured or subordinated debt financing in any highly leveraged
transactions.

Environmental and Regulatory Matters
................................................................................

The company is subject to federal, state and local laws and regulations
concerning the environment, and is currently participating in administrative or
court proceedings as a participant in various groups of potentially responsible
parties. These proceedings are at various stages of activity, and it is
impossible to estimate with any certainty the total cost of remediation, the
timing and extent of remedial actions which may be required by governmental
authorities, and the amount of the liability, if any, of the company. If and
when it is possible to make a reasonable estimate of the company's liability
with respect to such a matter, a provision would be made as appropriate. Based
on facts presently known to it, the company does not believe that the outcome of
these proceedings will have a material adverse effect on its financial
condition.

On January 31, 1995, the United States Postal Service (USPS) issued proposed
regulations addressing the manufacture, distribution, and use of postage meters.
The proposed regulations cover four general categories: meter security,
administrative controls, Computerized Meter Resetting Systems (CMRS) and other
issues. In general, the proposed regulations impose reporting and performance
obligations on meter manufacturers, prescribe potential administrative
sanctions for failure to meet these obligations and would require a
restructuring of the fund management system of CMRS to give the USPS more
direct control over meter licensee deposits. The company is currently drafting
its comments on the proposed regulations. The actions required of the company to
implement the proposed regulations cannot yet be determined. It is the intent
of the company to adopt strategies that would minimize any negative financial
impact to the company of final regulations when issued.

Effects of Inflation and Foreign Exchange
................................................................................

Inflation, even though moderate in recent years, continues to have an effect on
worldwide economies and the way companies operate. In addition to increasing
labor costs and operating expenses, the company is also impacted by the higher
costs associated with replacement of fixed assets and especially rental
equipment assets. In the face of increasing costs, the company has generally
been able to maintain profit margins through productivity and efficiency
improvements, continual review of both manufacturing capacity and operating
expense levels and, to an extent, price increases.

The results of the company's international operations are subject to currency
fluctuations. The company enters into foreign exchange contracts for purposes
other than trading primarily to minimize its risk of loss from fluctuations in
exchange rates on the settlement of firm and budgeted intercompany receivables
and payables arising in connection with transfers of finished goods inventories
between affiliates as well as certain intercompany loans.

At December 31, 1994, the company had approximately $141.5 million of foreign
exchange contracts outstanding, maturing through 1997, to buy or sell various
currencies. Risks arise from the possible non-performance by counterparties in
meeting the terms of their contracts and from movements in securities values
and interest and exchange rates. However, the company does not anticipate non-
performance by the counterparties as they are composed of a number of major
international financial institutions. Maximum risk of loss on these contracts is
limited to the amount of the difference between the spot rate at the date of
the contract delivery and the contracted rate.

Dividend Policy
................................................................................

It is the policy of the Pitney Bowes board of directors to pay a cash dividend
on common stock each quarter when feasible. In setting dividend payments, the
board considers the dividend rate in relation to the company's recent and
projected earnings and its capital investment opportunities and requirements.
Pitney Bowes has paid a dividend each year since 1934.

27

SUMMARY OF SELECTED FINANCIAL DATA

(Dollars in thousands, except per share data)                  Pitney Bowes Inc.

Years ended December 31                       1994             1993            1992            1991            1990
-------------------------------------------------------------------------------------------------------------------

Total revenue                           $3,270,613       $3,000,386      $2,887,583      $2,803,160      $2,656,397
Costs and expenses                       2,729,472        2,501,526       2,475,629       2,414,163       2,321,330
Nonrecurring items, net                    (25,366)               -               -               -          86,500
-------------------------------------------------------------------------------------------------------------------
Income from continuing operations
before income taxes                       566,507          498,860         411,954         388,997         248,567
Provision for income taxes                 218,077          193,166         151,215         146,346          89,409
-------------------------------------------------------------------------------------------------------------------
Income from continuing operations          348,430          305,694         260,739         242,651         159,158
Discontinued operations                     45,161           47,495          54,129          52,648          54,137
Effect of accounting changes              (119,532)               -        (214,631)              -               -
-------------------------------------------------------------------------------------------------------------------
Net income                              $  274,059       $  353,189      $  100,237      $  295,299      $  213,295
===================================================================================================================
Income per common and common
equivalent share:
Continuing operations                      $2.21            $1.92           $1.64           $1.52           $1.00
Discontinued operations                      .29              .30             .34             .33             .34
Effect of accounting changes                (.76)               -           (1.35)              -               -
-------------------------------------------------------------------------------------------------------------------
Net income                                 $1.74            $2.22            $.63           $1.85           $1.34
===================================================================================================================
Total dividends on common, preference
and preferred stock                      $162,714         $142,142        $123,112        $107,948         $94,819
Dividends per share of common stock          $1.04             $.90            $.78            $.68            $.60
Average common and common equivalent
shares outstanding                    157,728,628      159,368,652     159,235,412     159,954,680     159,249,760

Balance sheet at December 31
-------------------------------------------------------------------------------------------------------------------

Total assets                          $  7,399,720     $  6,793,816    $  6,498,752    $  6,380,580     $ 6,060,545
Long-term debt                        $    779,217     $    847,316    $  1,015,401    $  1,058,763     $ 1,099,396
Capital lease obligations             $     23,147     $     29,462    $     32,161    $     35,755     $    36,560
Stockholders' equity                  $  1,745,069     $  1,871,595    $  1,652,881    $  1,800,683     $ 1,589,414
Book value per common share           $      11.52     $      11.81    $      10.50    $      11.31     $     10.07

Ratios
-------------------------------------------------------------------------------------------------------------------

Profit margin-continuing operations:
Pretax earnings                             17.3%            16.6%           14.3%           13.9%            9.4%
After-tax earnings                          10.7%            10.2%            9.0%            8.7%            6.0%
Return on stockholders' equity -
before accounting changes                    22.6%            18.9%           19.0%           16.4%           13.4%
Debt to total capital                         66.3%            61.3%           64.5%           62.8%           65.4%

Other
-------------------------------------------------------------------------------------------------------------------

Common stockholders of record               31,226           31,189          30,828          29,588          31,323
Total employees                             32,792           32,539          28,958          29,421          29,942
Postage meters in service, U.S., U.K.
and Canada                              1,480,692        1,445,689       1,413,448       1,393,774       1,386,387

See notes, pages 33 through 42

28

CONSOLIDATED STATEMENT OF INCOME

(Dollars in thousands, except per share data)                  Pitney Bowes Inc.

Years ended December 31                      1994         1993*        1992*
---------------------------------------------------------------------------

Revenue from:
Sales                                $1,418,304   $1,278,859   $1,158,740
Rentals and financing                 1,441,183    1,309,361    1,319,248
Support services                        411,126      412,166      409,595
---------------------------------------------------------------------------
Total revenue                       3,270,613    3,000,386    2,887,583
===========================================================================
Costs and expenses:
Cost of sales                           828,221      705,438      633,155
Cost of rentals and financing           466,070      415,521      404,602
Selling, service and administrative   1,167,422    1,120,607    1,132,129
Research and development                 78,618       80,874       84,984
Interest expense                        194,115      189,292      230,764
Interest income                          (4,974)     (10,206)     (10,005)
Nonrecurring items, net                 (25,366)           -            -
---------------------------------------------------------------------------
Total costs and expenses            2,704,106    2,501,526    2,475,629
===========================================================================
Income from continuing operations
before income taxes                      566,507      498,860      411,954
Provision for income taxes                218,077      193,166      151,215
---------------------------------------------------------------------------
Income from continuing operations         348,430      305,694      260,739
Discontinued operations                    45,161       47,495       54,129
---------------------------------------------------------------------------
Income before effect of changes in
accounting principles                    393,591      353,189      314,868
Effect of changes in accounting
principles                              (119,532)           -     (214,631)
---------------------------------------------------------------------------
Net income                              $ 274,059     $353,189    $ 100,237
===========================================================================
Income per common and common
equivalent share:
Continuing operations                 $    2.21     $   1.92    $    1.64
Discontinued operations                     .29          .30          .34
Effect of changes in accounting
principles                                (.76)           -        (1.35)
---------------------------------------------------------------------------
Net income                            $    1.74     $   2.22    $     .63
===========================================================================

*Reclassified to reflect discontinued operations.

See notes, pages 33 through 42

29

CONSOLIDATED BALANCE SHEET

(Dollars in thousands)                                         Pitney Bowes Inc.

December 31                                                                 1994         1993
---------------------------------------------------------------------------------------------
Assets
---------------------------------------------------------------------------------------------

Current assets:
Cash and cash equivalents                                           $   75,106   $   54,653
Short-term investments, at cost which approximates market                  639        1,153
Accounts receivable, less allowances: 1994, $16,909; 1993, $16,691     422,276      411,810
Finance receivables, less allowances: 1994, $36,224; 1993, $39,488   1,050,090      994,998
Inventories                                                            430,641      394,744
Other current assets and prepayments                                   104,992       79,391
---------------------------------------------------------------------------------------------
Total current assets                                               2,083,744    1,936,749
Property, plant and equipment, net                                       578,650      555,038
Rental equipment and related inventories, net                            695,343      641,588
Property leased under capital leases, net                                 12,633       15,451
Long-term finance receivables, less allowances:
1994, $76,867; 1993, $77,024                                         3,086,401    2,895,952
Investment in leveraged leases                                           481,308      301,645
Goodwill, net of amortization: 1994, $40,984; 1993, $33,640              222,445      231,309
Other assets                                                             239,196      216,084
---------------------------------------------------------------------------------------------
Total assets                                                          $7,399,720   $6,793,816
=============================================================================================

Liabilities and stockholders' equity
---------------------------------------------------------------------------------------------

Current liabilities:
Accounts payable and accrued liabilities                            $  828,396   $  675,559
Income taxes payable                                                   194,427      200,110
Notes payable and current portion of long-term obligations           2,626,231    2,081,872

Advance billings                                                       329,415      315,840
---------------------------------------------------------------------------------------------
Total current liabilities                                          3,978,469    3,273,381
Deferred taxes on income                                                 453,438      409,660
Long-term debt                                                           779,217      847,316
Other noncurrent liabilities                                             443,527      391,864
---------------------------------------------------------------------------------------------
Total liabilities                                                  5,654,651    4,922,221
---------------------------------------------------------------------------------------------
Stockholders' equity:
Cumulative preferred stock, $50 par value, 4% convertible                   48           68
Cumulative preference stock, no par value, $2.12 convertible             2,790        2,969
Common stock, $2 par value (240,000,000 shares authorized;
161,668,956 shares issued)                                            323,338      323,338
Capital in excess of par value                                          35,200       36,762
Retained earnings                                                    1,785,513    1,674,168
Cumulative translation adjustments                                     (41,617)     (47,319)
Treasury stock, at cost (10,392,953 shares)                           (360,203)    (118,391)
---------------------------------------------------------------------------------------------
Total stockholders' equity                                         1,745,069    1,871,595
---------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                            $7,399,720   $6,793,816
=============================================================================================

See notes, pages 33 through 42

30

CONSOLIDATED FINANCIAL STATEMENT OF CASH FLOWS

(Dollars in thousands)                                         Pitney Bowes Inc.

Years ended December 31                                     1994        1993        1992
----------------------------------------------------------------------------------------

Cash flows from operating activities:
Net income                                           $ 274,059   $ 353,189   $ 100,237
Effect of changes in accounting principles             119,532           -     214,631
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization                        268,293     247,884     235,990
Nonrecurring items, net                              (25,710)     (1,283)     (7,208)
Cash used for strategic initiatives                   (3,386)          -           -
Increase (decrease) in deferred taxes on income      119,180      81,811      (8,679)
Change in assets and liabilities:
Accounts receivable                                 (8,500)    (11,346)      9,791
Sales-type lease receivables                      (173,691)   (136,667)    (99,528)
Inventories                                        (43,801)    (51,286)    (19,370)
Other current assets and prepayments               (22,762)    (17,012)     (2,298)
Accounts payable and accrued liabilities            14,658      48,451      32,808
Income taxes payable                                  (332)    (13,085)     64,830
Advance billings                                    12,826       3,102         977
Other, net                                           (61,937)    (63,771)    (22,078)
----------------------------------------------------------------------------------------
Net cash provided by operating activities          468,429     439,987     500,103
----------------------------------------------------------------------------------------
Cash flows from investing activities:
Short-term investments                                     600         537       2,900
Net investment in fixed assets                        (345,593)   (291,783)   (224,563)
Net investment in direct-finance lease receivables     (72,170)    108,991    (115,077)
Investment in leveraged leases                        (104,665)     (8,174)    (60,964)
Proceeds from sale of subsidiary                             -           -      80,000
Net investment in companies acquired                         -      (8,428)    (15,639)
----------------------------------------------------------------------------------------
Net cash used in investing activities             (521,828)   (198,857)   (333,343)
----------------------------------------------------------------------------------------
Cash flows from financing activities:
Increase in notes payable                              555,457     195,024     202,666
Proceeds from long-term obligations                    200,000           -     100,200
Principal payments on long-term obligations           (275,333)   (244,503)   (318,540)
Proceeds from issuance of stock                         22,702      22,544      23,827
Stock repurchases                                     (268,419)    (86,861)    (89,392)
Dividends paid                                        (162,714)   (142,142)   (123,112)
----------------------------------------------------------------------------------------
Net cash provided by (used in) financing
activities                                         71,693    (255,938)   (204,351)
----------------------------------------------------------------------------------------
Effect of exchange rate changes on cash                    2,159      (1,555)     (4,921)
----------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents          20,453     (16,363)    (42,512)
Cash and cash equivalents at beginning of year            54,653      71,016     113,528
----------------------------------------------------------------------------------------
Cash and cash equivalents at end of year               $  75,106   $  54,653   $  71,016
========================================================================================
Interest paid                                          $ 203,747   $ 199,176   $ 226,892
========================================================================================
Income taxes paid                                      $  99,379   $ 124,034   $ 126,865
========================================================================================

See notes, pages 33 through 42

31

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(Dollars in thousands)                                         Pitney Bowes Inc.

Capital in                Cumulative   Treasury
Preferred   Preference  Common     excess of    Retained    translation    stock,
stock       stock    stock     par value    earnings    adjustments  at cost
----------------------------------------------------------------------------------------------------------------------------

Balance, January 1, 1992                   $    113   $  4,417   $ 161,669    $157,449    $1,494,772   $ 33,208    $ (50,945)

Net income - 1992                                                                            100,237
Cash dividends:
Preferred ($2.00 per share)                                                                     (4)
Preference ($2.12 per share)                                                                  (277)
Common ($.78 per share)                                                                   (122,831)
Issuances under dividend
reinvestment and stock plans                                                      244           867                  21,444
Conversions to common stock                      (6)    (1,256)                 (2,460)       (4,514)                  8,236
Conversions of debt                                                               (250)                                  320
Issuance for company acquired                                                       12           195                     702
Repurchase of common stock                                                                                           (89,392)
Translation adjustments                                                                                 (60,419)
Tax credits relating to stock options                                            1,350
Two-for-one stock split                                            161,669    (156,345)       (5,324)
----------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1992                      107      3,161     323,338           -     1,463,121    (27,211)    (109,635)

Net income - 1993                                                                            353,189
Cash dividends:
Preferred ($2.00 per share)                                                                     (3)
Preference ($2.12 per share)                                                                  (239)
Common ($.90 per share)                                                                   (141,900)
Issuances under dividend
reinvestment and stock plans                                                    5,987                                20,071
Conversions to common stock                     (39)      (192)                 (1,539)                                1,770
Issuance for company acquired                                                   31,329                                56,264
Repurchase of common stock                                                                                           (86,861)
Translation adjustments                                                                                 (20,108)
Tax credits relating to stock options                                              985
----------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1993                       68      2,969     323,338      36,762     1,674,168    (47,319)    (118,391)

Net income - 1994                                                                            274,059
Cash dividends:
Preferred ($2.00 per share)                                                                     (2)
Preference ($2.12 per share)                                                                  (223)
Common ($1.04 per share)                                                                  (162,489)
Issuances under dividend
reinvestment and stock plans                                                     (801)                               23,635
Conversions to common stock                     (20)      (179)                 (1,813)                                2,012
Issuance for company acquired                                                       40                                   960
Repurchase of common stock                                                                                          (268,419)
Translation adjustments                                                                                   5,702
Tax credits relating to stock options                                            1,012
----------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1994                     $ 48    $ 2,790    $323,338   $  35,200    $1,785,513   $(41,617)   $(360,203)
============================================================================================================================

See notes, pages 33 through 42

32

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data or as otherwise indicated)

Pitney Bowes Inc.

1. Summary of significant accounting policies
................................................................................

Consolidation. The consolidated financial statements include the accounts of
Pitney Bowes Inc. and all of its subsidiaries (the company). All significant
intercompany transactions have been eliminated.

Cash equivalents, short-term investments and accounts receivable. Cash
equivalents include short-term, highly liquid investments with a maturity of
three months or less from date of acquisition. The company places its temporary
cash and short-term investments with financial institutions and limits the
amount of credit exposure with any one financial institution. Concentrations of
credit risk with respect to accounts receivable are limited due to the large
number of customers and relatively small account balances within the majority of
the company's customer base, and their dispersion across different businesses
and geographic areas.

Inventory valuation. Inventories are valued at the lower of cost or market. Cost
is determined on the last-in, first-out (LIFO) basis for most U.S. inventories,
and the first-in, first-out (FIFO) basis for most non-U.S. inventories.

Fixed assets and depreciation. Property, plant and equipment are stated at cost.
Major improvements which add to productive capacity or extend the life of an
asset are capitalized while repairs and maintenance are charged to expense as
incurred. Rental equipment is depreciated on the straight-line method. Other
depreciable assets are depreciated using either the straight-line method or
accelerated methods. Properties leased under capital leases are amortized on a
straight-line basis over the primary lease terms.

Rental arrangements and advance billings. The company rents equipment to its
customers, primarily postage meters and mailing, shipping, copier and facsimile
systems under short-term rental agreements, generally for periods of three
months to three years. Charges for equipment rental and maintenance contracts
are billed in advance; the related revenue is included in advance billings and
taken into income as earned.

Financing transactions. At the time a finance transaction is consummated, the
company's finance operations record the gross finance receivable, unearned
income and the estimated residual value of leased equipment. Unearned income
represents the excess of the gross finance receivable plus the estimated
residual value over the cost of equipment or contract acquired. Unearned income
is recognized as financing income using the interest method over the term of the
transaction and is included in rentals and financing revenue in the Consolidated
Statement of Income. Initial direct costs incurred in consummating a transaction
are accounted for as part of the investment in a lease and amortized to income
using the interest method over the term of the lease.

In establishing the provision for credit losses, the company has successfully
utilized an asset based percentage. This percentage varies depending on the
nature of the asset, recent historical experience, vendor recourse, management
judgment and the credit rating of the respective customer. The company evaluates
the collectibility of its net investment in finance receivables based upon its
loss experience and assessment of prospective risk, and does so through ongoing
reviews of its exposures to net asset impairment. The carrying value of its net
investment in finance receivables is adjusted to the estimated collectible
amount through adjustments to the allowance for credit losses. Finance
receivables are charged to the allowance for credit losses after collection
efforts are exhausted and the account is deemed uncollectible.

The company's general policy is to discontinue income recognition for finance
receivables contractually past due for over 90 to 120 days depending on the
nature of the transaction. Resumption of income recognition occurs when payments
are reduced to 60 days or less past due. However, large-ticket external
transactions are reviewed on an individual basis. Income recognition is normally
discontinued as soon as it is apparent that the obligor will not be making
payments in accordance with lease terms and resumed after the company has
sufficient experience on resumption of payments to be satisfied that such
payments will continue in accordance with the original or restructured contract
terms.

The company has, from time to time, sold selected finance assets. The company
follows Statement of Financial Accounting Standards No. 77, "Reporting by
Transferors for Transfers of Receivables with Recourse," when accounting for its
sale of finance assets. The difference between the sale price and the net
receivable, exclusive of residuals, is recognized as a gain or loss.

The company's investment in leveraged leases consist of rentals receivable net
of principal and interest on the related nonrecourse debt, estimated residual
value of the leased property and unearned income. The unearned income is
recognized as leveraged lease revenue in income from investments over the lease
term.

Goodwill. Goodwill represents the excess of cost over the value of net tangible
assets acquired in business combinations and is amortized using the straight-
line method over appropriate periods, principally 40 years. The recoverability
of goodwill is assessed by determining whether the unamortized balance can be
recovered from expected future cash flows from the applicable operation.

Revenue. Sales revenue is primarily recognized when a product is shipped.

Costs and expenses. Operating expenses of field sales and service offices are
included in selling, service and administrative expenses because no meaningful
allocation of such expenses to cost of sales, rentals and financing or support
services is practicable.

Income taxes. The deferred tax provision is determined under the liability
method. Deferred tax assets and liabilities are recognized based on differences
between the book and tax bases of assets and liabilities using currently enacted
tax rates. The provision for income taxes is the sum of the amount of income tax
paid or payable for the year as determined by applying the provisions of enacted
tax laws to the taxable income for that year and the net change during the year
in the company's deferred tax assets and liabilities.

Deferred taxes on income result principally from expenses not currently
recognized for tax purposes, the excess of tax over book depreciation, deferral
of lease revenue and gross profits on sales to finance subsidiaries.

For tax purposes, income from leases is recognized under the operating method
and represents the difference between gross rentals billed and operating
expenses.

33

It has not been necessary to provide for income taxes on $481 million of
cumulative undistributed earnings of subsidiaries outside the U.S. These
earnings will be either indefinitely reinvested or remitted substantially free
of additional tax. Determination of the liability that would result in the event
all of these earnings were remitted to the U.S. is not practicable. It is
estimated, however, that withholding taxes on such remittances would approximate
$29 million.

Nonpension postretirement benefits and postemployment benefits. The company
provides certain health care and life insurance benefits to eligible retirees
and their dependents. Substantially all of the company's U.S. and Canadian
employees become eligible for retiree health care benefits after reaching age 55
and with the completion of the required service period. Postemployment benefits
include primarily company provided medical benefits to disabled employees and
company provided life insurance as well as other disability- and death-related
benefits to former or inactive employees, their beneficiaries and covered
dependents. It is the company's practice to fund amounts for these nonpension
postretirement and postemployment benefits as incurred.

Income per share. Income per share is based on the weighted average number of
common and common equivalent shares outstanding during the year. Common
equivalent shares include preference stock, stock option and purchase plan
shares and convertible debt.

Deposits in trust. The company's customers electing the use of the Pitney Bowes
Postage By Phone(R) meter setting system, a computerized system developed by the
company for the resetting of postage meters via telephone, are required to make
deposits with a trustee to cover expected postage usage. Such funds, which are
not available to the company, are transferred to the respective postal services
upon resettings of meters for which the company receives fees. Deposits in trust
are not included in the company's Consolidated Balance Sheet.

Foreign currency translation. Assets and liabilities of subsidiaries operating
outside the U.S. are translated at rates in effect at the end of the period, and
revenues and expenses were translated at average rates during the period. Net
deferred translation gains and losses are accumulated in stockholders' equity.

The company enters into foreign exchange contracts for purposes other than
trading primarily to minimize its risk of loss from fluctuations in exchange
rates on the settlement of firm and budgeted intercompany receivables and
payables arising in connection with transfers of finished goods inventories
between affiliates as well as certain intercompany loans. Gains and losses on
foreign exchange contracts entered into as hedges are deferred and recognized as
part of the cost of the underlying transaction. Gains and losses related to
changes in the value of speculative contracts are recognized in income
currently. At December 31, 1994, the company had approximately $141.5 million of
foreign exchange contracts outstanding, maturing through 1997, to buy or sell
various currencies. Risks arise from the possible non-performance by
counterparties in meeting the terms of their contracts and from movements in
securities values and interest and exchange rates. However, the company does not
anticipate non-performance by the counterparties as they are composed of a
number of major international financial institutions. Maximum risk of loss on
these contracts is limited to the amount of the difference between the spot rate
at the date of the contract delivery and the contracted rate.

Foreign currency transaction and translation gains and (losses) were $0.1
million, $(1.1) million and $3.6 million in 1994, 1993 and 1992, respectively.

2. Inventories
................................................................................

Inventories consist of the following:

December 31                              1994      1993
-------------------------------------------------------

Raw materials and work in process    $111,051  $ 98,647
Supplies and service parts            114,429    98,773
Finished products                     205,161   197,324
-------------------------------------------------------
Total                                $430,641  $394,744
=======================================================

Had all inventories valued at LIFO been stated at current costs, inventories
would have been $45.1 million and $41.4 million higher than reported at December
31, 1994 and 1993, respectively.

3. Fixed assets
................................................................................

December 31                       1994        1993
--------------------------------------------------

Land                        $   39,698   $  38,171
Buildings                      337,417     306,384
Machinery and equipment        840,901     792,294
--------------------------------------------------
1,218,016   1,136,849
Accumulated depreciation      (639,366)   (581,811)
--------------------------------------------------
Property, plant and
equipment, net             $  578,650  $  555,038
==================================================
Rental equipment and
related inventories        $1,484,698  $1,426,395
Accumulated depreciation      (789,355)   (784,807)
--------------------------------------------------
Rental equipment and
related inventories, net   $  695,343  $  641,588
==================================================
Property leased under
capital leases             $   38,644  $   48,792
Accumulated amortization       (26,011)    (33,341)
--------------------------------------------------
Property leased under
capital leases, net        $   12,633  $   15,451
==================================================

4. Current liabilities
................................................................................

Accounts payable and accrued liabilities and notes payable and current portion
of long-term obligations are comprised as follows:

December 31                                           1994        1993
----------------------------------------------------------------------

Accounts payable-trade                          $  242,090  $  187,480
Accrued salaries, wages and commissions             93,289      94,092
Accrued pension benefits                           108,313      80,898
Accrued nonpension postretirement benefits          15,500      15,500
Accrued postemployment benefits                     15,084           -
Miscellaneous accounts payable
and accrued liabilities                           354,120     297,589
----------------------------------------------------------------------
Accounts payable and accrued liabilities        $  828,396  $  675,559
======================================================================
Notes payable and overdrafts                    $2,556,783  $2,000,364
Current portion of long-term debt                   66,987      78,222
Current portion of capital lease obligations         2,461       3,286
----------------------------------------------------------------------
Notes payable and current portion
of long-term obligations                       $2,626,231  $2,081,872
======================================================================

In countries outside the U.S., banks generally lend to non-finance
subsidiaries of the company on an overdraft or term-loan basis. These overdraft
arrangements and term-loans, for the most part, are extended on an uncommitted
basis by banks and do not require compensating balances or commitment fees.

Notes payable of the company's U.S. operations and financial services segment
were issued as commercial paper, loans against bank lines of credit, or to trust
departments of banks and others at below prevailing

34

prime rates. Fees paid to maintain lines of credit were $2.6 million, $2.8
million and $2.3 million in 1994, 1993 and 1992, respectively.

At December 31, 1994, notes payable and overdrafts outside the U.S. totaled
$9.6 million and U.S. notes payable totaled $2.5 billion. Unused credit
facilities outside the U.S. totaled $108.4 million at December 31, 1994 of which
$73.2 million were for finance operations. In the U.S., the company had $2.2
billion of unused credit facilities in place at December 31, 1994 largely in
support of commercial paper borrowings of which $1.6 billion were for the
finance operations. The weighted average interest rates were 5.7% and 3.2% on
notes payable and overdrafts outstanding at December 31, 1994 and 1993,
respectively.

The company periodically enters into interest rate swap and swap option
agreements as a means of managing interest rate exposure on both its U.S. and
non-U.S. debt. The interest differential to be paid or received is recognized
over the life of the agreements as an adjustment to interest expense. The
company is exposed to credit losses in the event of non-performance by the other
parties to the interest rate swap agreements to the extent of the differential
between the fixed- and variable-rates; such exposure is considered minimal.

The company enters into interest rate swap agreements principally through its
financial services business segment. It has been the policy and objective of the
company to use a balanced mix of debt maturities, variable- and fixed-rate debt
and interest rate swap agreements to control its sensitivity to interest rate
volatility. The company utilizes interest rate swap agreements when it considers
the economic benefits to be favorable. Swap agreements, as noted above, have
been principally utilized to fix interest rates on commercial paper and/or
obtain a lower cost on debt than would otherwise be available absent the swap.
At December 31, 1994, the company had outstanding interest rate swap agreements
with notional principal amounts of $509.9 million and terms expiring at various
dates from 1995 to 2004. The company exchanged variable commercial paper rates
on an equal notional amount of notes payable and overdrafts for fixed rates
ranging from 5.50% to 11.63%. No interest rate swap option agreements were
outstanding at December 31, 1994. Deferred gains and/or losses on terminated
interest rate swap contracts were not material at December 31, 1994 and 1993.

5. Long-term debt
................................................................................

December 31                                        1994      1993
-----------------------------------------------------------------

Non-financial services debt:
7.85% to 8.72% notes due 1995                $      -  $  9,000
Other, various due dates (5.50% to 8.00%)         750       807
-----------------------------------------------------------------
750     9,807
Financial services debt:
Senior notes:
6.56% to 7.48% notes due 1995-1997             45,500    75,000
5.63% notes due 1997                          200,000         -
10.13% notes due 1997                               -   100,000
10.65% notes due 1999                               -   100,000
8.80% notes due 2003                          150,000   150,000
8.63% notes due 2008                          100,000   100,000
9.25% notes due 2008                          100,000   100,000
8.55% notes due 2009                          150,000   150,000
Canadian dollar notes due 1995-2000
(8.47% to 12.50%)                               29,856    58,055
Other, various due dates
(9.92% to 10.50%)                                3,111     4,454
-----------------------------------------------------------------
Total long-term debt                           $779,217  $847,316
=================================================================

The company has a medium-term note facility which was established as a part of
the company's shelf registrations, permitting issuance of up to $100 million in
debt securities of which $32 million remain available. Securities issued under
this medium-term note facility would have maturities ranging from more than one
year up to 30 years. The company also has an additional $300 million remaining
on shelf registrations filed with the Securities and Exchange Commission.

Pitney Bowes Credit Corporation (PBCC) has $400 million available from a $500
million shelf registration statement filed with the Securities and Exchange
Commission.

In March 1994, PBCC issued $200 million of 5.63 percent notes due in February
1997. In April 1994, PBCC redeemed $100 million of 10.65 percent notes due in
April 1999. PBCC had previously sold an option on a notional principal amount of
$100 million to enable a counterparty to require PBCC to pay a fixed rate of
10.67 percent for five years starting April 1, 1994. The counterparty exercised
that option. In September 1994, PBCC redeemed $100 million of 10.13 percent
notes due in September 1997.

The annual maturities of the outstanding debt during each of the next five
years are as follows: 1995, $67.0 million; 1996, $6.4 million; 1997, $251.4
million; 1998, $5.5 million and 1999, $3.7 million.

Under terms of their senior and subordinated loan agreements, certain of the
finance operations are required to maintain earnings before taxes and interest
charges at prescribed levels. With respect to such loan agreements, the company
will endeavor to have these finance operations maintain compliance with such
terms and, under certain loan agreements, is obligated, if necessary, to pay to
these finance operations amounts sufficient to maintain a prescribed ratio of
income available for fixed charges. The company has not been required to make
any such payments to maintain income available for fixed charge coverage. The
company does not guarantee payment of any of the finance operations'
obligations.

6. Capital stock and capital in excess of par value
................................................................................

At December 31, 1994, 240,000,000 shares of common stock, 600,000 shares of
cumulative preferred stock, and 5,000,000 shares of preference stock were
authorized, and 151,276,003 shares of common stock (net of 10,392,953 shares of
treasury stock), 954 shares of 4% Convertible Cumulative Preferred Stock (4%
preferred stock) and 103,017 shares of $2.12 Convertible Preference Stock ($2.12
preference stock) were issued and outstanding. The balance of unreserved and
unissued preferred stock (599,046 shares) and preference stock (4,896,983
shares) may be issued in the future by the board of directors, which will
determine the dividend rate, terms of redemption, terms of conversion (if any)
and other pertinent features. Unreserved and unissued common stock (exclusive of
treasury stock) at December 31, 1994 amounted to 67,000,520 shares.

In October 1993, the company acquired all outstanding shares and options of
Ameriscribe Corporation in exchange for 2,257,792 shares of Pitney Bowes common
stock. See Note 11 to the consolidated financial statements.

The 4% preferred stock outstanding, which is entitled to cumulative dividends
at the rate of $2 per year, is redeemable at the option of the company, in whole
or in part at any time, at the price of $50 per share, plus dividends accrued to
the redemption date. Each share of the 4% preferred stock is convertible into
12.12 shares of common stock, subject to adjustment in certain events.

35

The $2.12 preference stock is entitled to cumulative dividends at the rate of
$2.12 per year and is redeemable at the option of the company at the rate of $28
per share. Each share of the $2.12 preference stock is convertible into eight
shares of common stock, subject to adjustment in certain events.

At December 31, 1994, an aggregate of 835,698 shares of common stock was
reserved for issuance upon conversion of the 4% preferred stock (11,562 shares)
and $2.12 preference stock (824,136 shares). In addition, 1,595,031 shares of
common stock were reserved for issuance under the company's dividend
reinvestment and other corporate plans.

Each share of common stock outstanding has attached one preference share
purchase right. The rights, which are subject to certain anti-dilution
adjustments, become exercisable in certain circumstances, after which they will
entitle the holder to purchase 1/400 of a share of Series A Junior Participating
Preference Stock. If, after the rights become exercisable, the company is
involved in a merger or certain other transactions, the holder will be entitled
to buy stock in the surviving company at a 50 percent discount.

7. Stock plans
................................................................................

Transactions under the company's stock plans are summarized below:

Price per
Common stock                                Shares       share
--------------------------------------------------------------

January 1, 1993, shares reserved           2,287,764   $ 7-$36
Shares offered 1993 (price approximates
market value at date of grant)              842,231   $38-$43
Shares issued 1993                          (705,462)  $ 7-$31
Shares canceled 1993                        (132,506)  $22-$42
--------------------------------------------------------------
December 31, 1993, shares reserved         2,292,027   $ 7-$43
Shares offered 1994 (price approximates
market value at date of grant)            1,009,102   $32-$40
Shares issued 1994                          (519,765)  $ 7-$38
Shares canceled 1994                        (152,398)  $30-$42
--------------------------------------------------------------
December 31, 1994, shares reserved         2,628,966   $10-$43
==============================================================

Of the common shares reserved at December 31, 1994, options for 1,301,248 are
exercisable. At December 31, 1994, there remain 1,316,410 common shares for
which rights to purchase may be granted under the stock purchase plans. In
addition, stock-based awards representing up to 4,954,419 common shares may be
granted under other stock plans.

8. Taxes on income
................................................................................

In 1992, the company adopted Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" (FAS 109), effective retroactively to January
1, 1992. Application of FAS 109 required no cumulative effect adjustment
primarily due to the company's previous use of the liability method of
accounting for income taxes. The adoption of this new standard had no
significant effect on the company's tax provision for 1992.

Income from continuing operations before income taxes and the provision for
income taxes consist of the following:

Years ended December 31                  1994         1993         1992
-----------------------------------------------------------------------

Income from continuing operations
before income taxes:
U.S.                               $565,375     $437,167     $339,598
Outside the U.S.                      1,132       61,693       72,356
-----------------------------------------------------------------------
Total                                $566,507     $498,860     $411,954
=======================================================================
Provision for income taxes:
U.S. federal:
Current                          $ 37,644     $ 79,666     $ 46,128
Deferred                          123,037       53,497       51,363
-----------------------------------------------------------------------
160,681      133,163       97,491
-----------------------------------------------------------------------
U.S. state and local:
Current                            12,856       20,065       11,276
Deferred                           31,295       14,834       15,532
-----------------------------------------------------------------------
44,151       34,899       26,808
-----------------------------------------------------------------------
Outside the U.S.:
Current                            19,342       40,311       25,172
Deferred                           (6,097)     (15,207)       1,744
-----------------------------------------------------------------------
13,245       25,104       26,916
-----------------------------------------------------------------------
Total current                        69,842      140,042       82,576
Total deferred                      148,235       53,124       68,639
-----------------------------------------------------------------------
Total                                $218,077     $193,166     $151,215
=======================================================================

Deferred tax liabilities and (assets)
-----------------------------------------------------------------------
December 31                                          1994          1993
-----------------------------------------------------------------------

Deferred tax liabilities:
Depreciation                                 $   58,441     $  42,789
Deferred profit (for tax purposes) on sales
to finance subsidiaries                        316,630       308,897
Lease revenue and related depreciation          578,916       520,110
Other                                            46,667        30,561
-----------------------------------------------------------------------
Deferred tax liabilities                        1,000,654       902,357
-----------------------------------------------------------------------
Deferred tax assets:
Nonpension postretirement benefits             (141,153)     (147,183)
Pension liability                               (36,068)      (26,051)
Inventory and equipment capitalization          (30,095)      (25,214)
Net operating loss carryforwards                (43,528)      (32,543)
Alternative minimum tax (AMT)
credit carryforwards                           (65,485)      (71,571)
Strategic focus reserve                         (27,007)            -
Postemployment benefits                         (34,320)            -
Other                                           (87,753)      (98,414)
Valuation allowance                              37,532        25,975
-----------------------------------------------------------------------
Deferred tax assets                              (427,877)     (375,001)
-----------------------------------------------------------------------
Net deferred taxes                             $  572,777     $ 527,356
=======================================================================

Net deferred taxes includes $119.3 million and $117.7 million for 1994 and
1993, respectively, of current deferred taxes which are included in income taxes
payable in the Consolidated Balance Sheet.

The deferred tax asset for net operating losses and related valuation
allowance changed due to the company's refinement of its strategic focus outside
the U.S. and additional losses incurred during 1994 by foreign subsidiaries. As
of December 31, 1994, approximately $101.4 million of net operating loss
carryforwards were available to the company. Most of these losses, as well as
the company's alternative minimum tax credit, can be carried forward
indefinitely.

36

In 1993, the company completed a transaction whereby it contributed certain
commercial aircraft, subject to direct finance leases, to a partnership. The
partnership transaction had the effect of reducing the company's obligation for
previously accrued deferred taxes. The reduction in deferred taxes has been
recognized as a reduction in 1993 income tax expense. Also in 1993, the company
recorded additional tax expense in the U.S. as a result of the Omnibus Budget
Reconciliation Act of 1993.

A reconciliation of the U.S. federal statutory rate to the company's effective
tax rate follows:

Percent of pretax income              1994   1993   1992
--------------------------------------------------------

U.S. federal statutory rate           35.0%  35.0%  34.0%
State and local income taxes           5.1    4.5    4.2
Rate adjustment for deferred taxes       -    3.2      -
Partnership tax benefits               (.8)  (2.3)     -
Other                                  (.8)  (1.7)  (1.5)
--------------------------------------------------------
Effective income tax rates            38.5%  38.7%  36.7%
========================================================

9. Retirement plans
................................................................................

The company has several defined benefit and defined contribution pension plans
covering substantially all employees worldwide. Benefits are primarily based on
employees' compensation and years of service. Company contributions are
determined based on the funding requirements of U.S. federal and other
governmental laws and regulations.

Total pension expense amounted to $50.2 million in 1994, $46.4 million in 1993
and $40.4 million in 1992. Net pension expense for defined benefit plans for
1994, 1993 and 1992 included the following components:

United States                       Foreign
------------------------------   ------------------------------
1994       1993       1992       1994       1993       1992
-----------------------------------------------------------------------------------------------------------------

Service cost - benefits earned during period      $ 35,908   $ 30,797   $ 27,319   $  5,975   $  5,971   $  6,913
Interest cost on projected benefit obligations      65,745     62,241     56,133     10,090      9,163     10,005
Actual return on assets                              6,880    (85,971)   (37,861)   (10,681)   (31,494)    (2,684)
Net (deferral) and amortization                    (67,094)    30,804    (11,085)    (1,502)    19,896    (10,978)
-----------------------------------------------------------------------------------------------------------------
Net periodic defined benefit pension expense(a)   $ 41,439   $ 37,871   $ 34,506   $  3,882   $  3,536   $  3,256
=================================================================================================================

(a) Net periodic defined benefit pension expense for continuing operations in
the U.S. was $38.1 million, $35.1 million and $31.6 million for 1994, 1993
and 1992, respectively. Net periodic defined benefit pension expense for
continuing operations outside the U.S. was $4.1 million, $3.5 million and
$3.3 million for 1994, 1993 and 1992, respectively.

The funded status at December 31, 1994 and 1993 for the company's defined
benefit plans was:

United States          Foreign
------------------  --------------------
1994      1993      1994        1993
--------------------------------------------------------------------------------------------------------------

Actuarial present value of:
Vested benefits                                                     $526,832  $561,874   $107,064   $ 97,471
==============================================================================================================
Accumulated benefit obligations                                     $581,639  $632,317   $107,283   $ 97,714
==============================================================================================================
Projected benefit obligations                                         $798,933  $854,589   $128,942   $124,286
--------------------------------------------------------------------------------------------------------------
Plan assets at fair value, primarily stocks and bonds, adjusted by:    670,182   689,622    137,494    136,900
Unrecognized net loss (gain)                                          26,191    90,078     (6,997)   (10,889)
Unrecognized net asset                                               (19,906)  (23,236)   (17,877)   (20,281)
Unamortized prior service costs from plan amendments                  27,686    30,159      9,928     10,952
--------------------------------------------------------------------------------------------------------------
704,153   786,623    122,548    116,682
--------------------------------------------------------------------------------------------------------------
Net pension liability                                                 $ 94,780  $ 67,966   $  6,394   $  7,604
==============================================================================================================
Assumptions for defined benefit plans(b):

Discount rate                                                             8.75%     7.50% 6.7%- 9.0% 6.7%- 9.5%
Rate of increase in future compensation levels                            5.75%     5.00% 3.5%- 6.5% 4.0%- 7.0%
Expected long-term rate of return on plan assets                          9.50%     9.50% 9.0%-10.0% 8.5%-10.0%
--------------------------------------------------------------------------------------------------------------

(b) Pension costs are determined using assumptions as of the beginning of the
year while the funded status of the plans is determined using assumptions as
of the end of the year.

37

10. Nonpension postretirement and postemployment benefits
................................................................................

In the fourth quarter of 1992, the company adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions" (FAS 106). This statement requires that the cost of these
benefits be recognized over the period the employee provides credited service to
the company rather than recognized on a cash basis, when incurred.

The transition effect of adopting FAS 106 on the immediate recognition basis
was retroactively reflected as of January 1, 1992, as a one-time, after-tax
charge of $214.6 million (net of approximately $139.7 million of income taxes),
or $1.35 per share. Application of this standard resulted in additional 1992
annual expenses, which totaled $22.4 million on income from continuing
operations before income taxes and $14.2 million after income taxes. In the
first quarter of 1993, the company announced certain changes to its health care
plans, including plan cost maximums, which should significantly reduce the
ongoing incremental impact of FAS 106 on future earnings.

Net nonpension postretirement benefit costs consisted of the following
components:

Years ended December 31                                   1994       1993
-------------------------------------------------------------------------

Service cost-benefits earned during the period        $ 10,140   $  9,249
Interest cost on accumulated postretirement
benefit obligations                                    19,379     21,146
Net (deferral) and amortization                        (19,143)   (18,647)
-------------------------------------------------------------------------
Net periodic postretirement benefit costs(a)          $ 10,376   $ 11,748
=========================================================================

(a) Net periodic postretirement benefit costs for continuing operations was $9.8
million and $10.8 million for 1994 and 1993, respectively.

The company's nonpension postretirement benefit plans are not funded. The
status of the plans was as follows:

December 31                                                1994      1993
-------------------------------------------------------------------------

Accumulated postretirement benefit obligations:
Retirees and dependents                              $165,397  $174,999
Fully eligible active plan participants                38,792    54,583
Other active plan participants                         63,751    76,229
Unrecognized net gain (loss)                           16,179   (28,215)
Unrecognized prior service cost                        81,650   100,306
-------------------------------------------------------------------------
Accrued nonpension postretirement benefits             $365,769  $377,902
=========================================================================

The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligations was 11.75% and 12% in 1994 and 1993,
respectively. This was assumed to gradually decline to 5.75% and 5% by the year
2000 and remaining at that level thereafter for 1994 and 1993, respectively. A
one-percentage-point increase in the assumed health care cost trend rate would
increase the year-end accumulated postretirement benefit obligations by
approximately $15 million as of December 31, 1994 and the net periodic
postretirement health care cost by $1.2 million in 1994.

The assumed weighted average discount rate used in determining the accumulated
postretirement benefit obligations was 8.75% and 7.5% in 1994 and 1993,
respectively.

The company adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (FAS 112) as of January 1,
1994. FAS 112 required that postemployment benefits be recognized on the accrual
basis of accounting. The effect of adopting FAS 112 was a one-time non-cash,
after-tax charge of $119.5 million (net of approximately $80.5 million of income
taxes), or $.76 per share.

Since the first quarter of 1994, as part of the company's employee work-life
initiatives, employee input was actively sought about benefits and it was
concluded that employees prefer benefits more closely related to their changing
work-life needs. As a result, the company significantly reduced or eliminated
certain postemployment benefits, specifically service-related company-subsidized
life insurance, salary continuance and medical benefits, resulting in an after-
tax credit to income of $70.9 million (net of approximately $47.7 million of
income taxes). As a further outgrowth of this study, the company also
instituted, effective January 1, 1995, certain enhancements to its deferred
investment plan, including an increase in the company's match of employee
contributions.

11. Acquisitions and discontinued operations
................................................................................

The company has refined its strategic focus, with the intent to capitalize on
its strengths and competitive position. Based on an extensive review, the
company decided to concentrate its energies and resources on products and
services which facilitate the preparation, organization, movement, delivery,
tracking, storage and retrieval of documents, packages, letters and other
materials, in hard copy and digital form for its customers. Accordingly in 1994,
the company announced its intent to seek buyers for its Dictaphone Corporation
(Dictaphone) and Monarch Marking Systems, Inc. (Monarch) subsidiaries. The sales
of Dictaphone and Monarch are expected to result in gains at closings which are
expected to occur in 1995. Dictaphone and Monarch have been classified in the
Consolidated Statement of Income as discontinued operations; revenue and income
from continuing operations exclude the results of Dictaphone and Monarch for all
periods presented.

Summary results of Dictaphone and Monarch operations were as follows:

Years ended December 31         1994      1993      1992
--------------------------------------------------------

Revenue                     $552,255  $542,495  $546,541
========================================================
Income before income taxes  $ 74,843  $ 75,947  $ 83,398
Provision for income taxes    29,682    28,452    31,969
--------------------------------------------------------
Income from discontinued
operations                 $ 45,161  $ 47,495  $ 51,429
========================================================

In October 1993, the company acquired all outstanding shares of Ameriscribe
Corporation (Ameriscribe) in exchange for approximately $83 million of Pitney
Bowes common stock, plus approximately $5 million of additional shares for
outstanding Ameriscribe options. Ameriscribe, a nationwide provider of on-site
reprographics, mailroom and other office services to industrial corporations and
professional service firms on a contract basis, had revenue of $114 million in
1992. The company consolidated this unit with its facilities management business
operated through its wholly-owned subsidiary, Pitney Bowes Management Services,
Inc. The transaction was accounted for by the purchase method and the proforma
effect on the company's results was not significant.

In 1992, the company sold its Wheeler Group Inc. (Wheeler) subsidiary for
approximately $80 million in cash to a group consisting of the subsidiary's
management and Butler Capital Corporation. As part of the transaction, the
company also invested $4 million in preferred stock with warrants to purchase up
to 16 percent of the common stock of the new entity. In 1994, the company
exercised the warrants in exchange for common stock of the entity and pursuant
to a corporate reorganization by merger of the entity, received common stock in
a new entity and a special cash payment. The 1992 sale

38

resulted in a gain of $2.7 million, net of $13.5 million of income taxes. The
Wheeler divestiture was expected to result in a gain at closing, accordingly,
the 1992 quarterly seasonal losses Wheeler incurred on $25.9 million of revenue
for the seven months ended July 31, 1992 were deferred and offset against the
gain on the sale.

12.  Nonrecurring items, net
................................................................................

During the third quarter of 1994, the company adopted a formal plan designed to
address the impact of technology on work force requirements and to further
refine its strategic focus on core businesses worldwide. The company recorded a
$93.2 million charge to income to cover the costs of such actions. The charge
includes $61 million of severance and benefit costs for work force reductions,
$22 million of asset write downs and $10 million of other exit costs. All but
the asset write downs will result in cash outlays.

The phase-out of older product lines, introduction of new, advanced products
and increased need for higher employee skill levels to deliver and service these
products will require a work force reduction of approximately 2,000 employees
worldwide over the next year, and the future hiring of approximately 850 new
employees with these requisite enhanced skills. All costs associated with hiring
of new employees were excluded from the charge and will be recognized
appropriately in the period incurred.

Current and future advanced product offerings require a smaller, but more
highly skilled engineering, manufacturing and service work force to take full
advantage of design, production, diagnostic and service strategies. These
disciplines account for a work force reduction of more than 850 employees and
will require severance and benefit costs of $27 million. Other strategic actions
include reengineering and streamlining of order flow, logistics and other
administrative processes in the U.S., Europe and the Asia Pacific region which
will result in an additional work force reduction of more than 800 employees
requiring severance and benefit costs of $22.7 million. The decisions to phase
out non-mailing products in Germany and the cessation of further development and
marketing of shipping products which cannot be cost-effectively upgraded to new
technologies will account for the remaining work force reductions and related
severance and benefit costs.

As noted above, included in the plan to refine the strategic business focus of
the company are asset write downs of $22 million and $10 million of other exit
costs for certain additional actions. Consistent with a refinement of focus on
our core businesses, these actions include phasing-out non-mailing products in
Germany. This decision requires the write down of inventories, lease and rental
contracts and other assets to their net realizable value for which $7.4 million
has been provided. The decision to cease development and marketing of certain
shipping products as noted above has resulted in further inventory and other
asset write-offs of $8.6 million. The company has decided to transition a
software-based business with its own product offerings to a limited product
development and marketing support function. As a result, $6.3 million of
goodwill related to the acquisition of this business has been written-off. The
$10 million of other exit costs are primarily due to the adoption of a
centralized organizational structure in the European financial services
businesses that will result in the early termination of a facility lease.

As of December 31, 1994 the company has made severance and benefits payments
of $3.4 million to approximately 200 employees separated under the strategic 
focus initiatives.

Benefits from the strategic focus initiatives (principally reduced employee
expense) will be offset, in part, by increased hiring and training expenses to
obtain employees with requisite skills. Anticipated net cash savings in 1995 and
1996 approximate $20 million and $30 million, respectively.

13. Commitments and contingencies
................................................................................

At December 31, 1994, the company's finance subsidiaries had unfunded
commitments of $3.0 million to extend credit to customers. The company evaluates
each customer's credit worthiness on a case-by-case basis. Upon extension of
credit, the amount and type of collateral obtained, if deemed necessary by the
company, is based on management's credit assessment of the customer. Fees
received under the agreements are recognized over the commitment period. The
maximum risk of loss arises from the possible non-performance of the customer to
meet the terms of the credit agreement. As part of the company's review of its
exposure to risk, adequate provisions are made for finance assets which may be
uncollectible.

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

The company is subject to federal, state and local laws and regulations
concerning the environment, and is currently participating in administrative or
court proceedings as a participant in various groups of potentially responsible
parties. These proceedings are at various stages of activity, and it is
impossible to estimate with any certainty the total cost of remediation, the
timing and extent of remedial actions which may be required by governmental
authorities, and the amount of the liability, if any, of the company. If and
when it is possible to make a reasonable estimate of the company's liability
with respect to such a matter, a provision would be made as appropriate. Based
on facts presently known to it, the company does not believe that the outcome of
these proceedings will have a material adverse effect on its financial
condition.

14. Leases
................................................................................

In addition to factory and office facilities owned, the company leases similar
properties, as well as sales and service offices, equipment and other
properties, generally under long-term lease agreements extending from three to
25 years. Certain of these leases have been capitalized at the present value of
the net lease payments at inception. Amounts included under liabilities
represent the present value of remaining lease payments.

Future minimum lease payments under both capital and operating leases as of
December 31, 1994 are as follows:

Capital   Operating
Years ending December 31            leases      leases
------------------------------------------------------

1995                               $ 5,631    $ 88,268
1996                                 5,294      60,825
1997                                 4,976      39,865
1998                                 4,726      26,567
1999                                 4,716      20,202
Later years                         18,712      68,612
------------------------------------------------------
Total minimum lease payments        44,055    $304,339
========
Less amount representing interest  (18,447)
------------------------------------------
Present value of net
minimum lease payments           $ 25,608
==========================================

39

Rental expense was $127.0 million, $101.6 million and $101.4 million in 1994,
1993 and 1992, respectively.

15. Financial services
................................................................................

The company has several consolidated finance operations which are engaged in
lease financing of the company's products as well as other commercial and
industrial transactions in the U.S., Canada, the U.K., Germany, France and
Australia. In the first quarter of 1993, the company began phasing out the
business of financing non-Pitney Bowes equipment outside of the U.S. Condensed
financial data for the consolidated finance operations follows:

Condensed summary of operations
Years ended December 31               1994      1993     1992
-------------------------------------------------------------

Internal finance income           $328,380  $328,719 $319,335
External finance income            356,251   285,546  314,016
-------------------------------------------------------------
Revenue                            684,631   614,265  633,351
-------------------------------------------------------------
Costs and expenses                 276,576   233,491  230,608
Interest, net                      175,152   171,982  201,421
Nonrecurring items, net              6,096        -        -
-------------------------------------------------------------
Total expenses                   457,824   405,473  432,029
-------------------------------------------------------------
Income before income taxes         226,807   208,792  201,322
Provision for income taxes          72,677    75,012   69,954
-------------------------------------------------------------
Income before effect of changes
in accounting principles          154,130   133,780  131,368
Effect of changes in
accounting principles              (2,820)        -   (1,866)
-------------------------------------------------------------
Net income                        $151,310  $133,780 $129,502
=============================================================

Condensed balance sheet at December 31       1994        1993
-------------------------------------------------------------

Cash and cash equivalents              $   15,144  $    8,325
Finance receivables, net                1,050,090     994,998
Other current assets and prepayments       61,054      43,760
-------------------------------------------------------------
Total current assets                  1,126,288   1,047,083

Long-term finance receivables, net      3,086,401   2,895,952
Investment in leveraged leases            481,308     301,645
Other assets                              225,495     210,616
-------------------------------------------------------------
Total assets                           $4,919,492  $4,455,296
=============================================================
Accounts payable and accrued
liabilities                           $  410,564  $  376,634
Income taxes payable                      104,662     105,986
Notes payable and current portion
of long-term obligations               2,199,843   1,889,902
-------------------------------------------------------------
Total current liabilities             2,715,069   2,372,522

Deferred taxes on income                  263,923     232,728
Long-term debt                            973,222     997,448
Other noncurrent liabilities                4,983       3,705
-------------------------------------------------------------
Total liabilities                     3,957,197   3,606,403
-------------------------------------------------------------
Equity                                    962,295     848,893
-------------------------------------------------------------
Total liabilities and equity           $4,919,492  $4,455,296
=============================================================

Finance receivables are generally due in monthly, quarterly or semi-annual
installments over periods ranging from three to seven years. In addition, 24
percent of the company's net finance assets represent secured commercial and
private jet aircraft transactions with lease terms ranging from two to 25 years.
The company considers its credit risk for these leases to be minimal since all
aircraft lessees are making payments in accordance with lease agreements. The
company believes any potential exposure in aircraft investment is mitigated by
the value of the collateral as the company retains a security interest in the
leased aircraft.

Maturities of gross finance receivables and notes payable for the finance
operations are as follows:

Gross finance  Notes payable and
Years ending December 31    receivables  subordinated debt
----------------------------------------------------------

1995                         $1,451,206         $2,199,843
1996                          1,082,113              5,638
1997                            747,236            251,407
1998                            462,066              5,484
1999                            256,723              3,710
Thereafter                    1,012,831            706,983
----------------------------------------------------------
Total                        $5,012,175         $3,173,065
==========================================================

Finance operations' net purchases of Pitney Bowes equipment amounted to $617.4
million, $585.1 million and $524.4 million in 1994, 1993 and 1992, respectively.

The components of net finance receivables were as follows:

December 31                            1994          1993
---------------------------------------------------------

Gross finance receivables       $ 5,012,175   $ 4,803,877
Residual valuation                  599,430       522,566
Initial direct cost deferred         76,323        68,633
Allowance for credit losses        (113,091)     (116,512)
Unearned income                  (1,438,346)   (1,387,614)
---------------------------------------------------------
Net finance receivables         $ 4,136,491   $ 3,890,950
=========================================================

The company's net investment in leveraged leases is composed of the following
elements:

December 31                              1994        1993
---------------------------------------------------------

Net rent receivable                 $ 479,027   $ 185,120
Unguaranteed residual valuation       550,516     422,483
Unearned income                      (548,235)   (305,958)
---------------------------------------------------------
Investment in leveraged leases        481,308     301,645
Deferred taxes arising from
leveraged leases                    (169,537)   (114,093)
---------------------------------------------------------
Net investment in leveraged leases  $ 311,771   $ 187,552
=========================================================

Following is a summary of the components of income from leveraged leases:

Years ended December 31              1994    1993    1992
---------------------------------------------------------

Pretax leveraged lease income     $ 6,694  $3,785  $3,281
Income tax effect                   5,050   5,381   5,490
---------------------------------------------------------
Income from leveraged leases      $11,744  $9,166  $8,771
=========================================================

Leveraged lease assets acquired by the company are financed primarily through
nonrecourse loans from third-party debt participants. These loans are secured by
the lessee's rental obligations and the leased property. Net rents receivable
represent gross rents less the principal and interest on the nonrecourse debt
obligations. Unguaranteed residual values are principally based on independent
appraisals of the values of leased assets remaining at the expiration of the
lease.

40

Leveraged lease investments totaling $234.4 million are related to commercial
real estate facilities, with original lease terms ranging from 17 to 25 years.
Also included are nine aircraft transactions with major commercial airlines,
with a total investment of $227.4 million and with original lease terms ranging
from 22 to 25 years and two transactions involving locomotives with a total
investment of $19.5 million with original lease terms ranging from 25 to 38
years.

The company has sold net finance receivables with varying amounts of recourse
in privately-placed transactions with third-party investors. The uncollected
principal balance of receivables sold and residual guarantee contracts totaled
$275.2 million and $379.8 million at December 31, 1994 and 1993, respectively.
The maximum risk of loss arises from the possible non-performance of lessees to
meet the terms of their contracts and from changes in the value of the
underlying equipment. Conversely, these contracts are supported by the
underlying equipment value and credit worthiness of customers. As part of the
review of its exposure to risk, the company believes adequate provisions have
been made for sold receivables which may be uncollectible.

The company has invested in various types of equipment under operating leases;
the net investment at December 31, 1994 and 1993 was not significant.

16. Business segment information
................................................................................

For a description of the company's segments and financial information relating
to revenue, operating profit and identifiable assets by business segment for the
years 1994, 1993 and 1992, see "Segments" on page 21. That information is
incorporated herein by reference. The information set forth below should be read
in conjunction with such information. Operating profit of each segment is
determined by deducting from revenue the related costs and operating expenses
directly attributable to the segment. Segment operating profit excludes general
corporate expenses, which amounted to $71.7 million in 1994, $74.4 million in
1993 and $88.3 million in 1992, income taxes and net interest other than that
related to the financial services segment. Additional segment information is as
follows:

Years ended December 31         1994      1993      1992
--------------------------------------------------------

Depreciation and
amortization:
Business equipment
and services             $218,861  $210,591  $202,595
Financial services          32,859    22,849    19,875
--------------------------------------------------------
Total                       $251,720  $233,440  $222,470
========================================================
Net additions to property,
plant and equipment
and rental equipment
and related inventories:
Business equipment
and services             $246,922  $245,114  $184,882
Financial services          47,087    28,863     1,958
--------------------------------------------------------
Total                       $294,009  $273,977  $186,840
========================================================

Identifiable assets are those used in the company's operations in each segment
and exclude cash and cash equivalents and short-term investments. Identifiable
assets of geographic areas include intercompany profits on inventory and rental
equipment transferred between segments and intercompany accounts. A
reconciliation of identifiable assets to consolidated assets is as follows:

December 31                            1994         1993
--------------------------------------------------------

Identifiable assets by
geographic area                 $7,081,244   $6,608,214
Inter-area profits                  (29,772)     (21,966)
Intercompany accounts              (176,874)    (243,764)
--------------------------------------------------------
Identifiable assets by industry
segment                          6,874,598    6,342,484
Cash and cash equivalents and
short-term investments              75,745       55,806
General corporate assets            142,928      122,046
Discontinued operations             306,449      273,480
--------------------------------------------------------
Consolidated assets              $7,399,720   $6,793,816
========================================================

17. Fair value of financial instruments
................................................................................

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:

Cash, cash equivalents, short-term investments, accounts receivable, accounts
payable and notes payable. The carrying amounts approximate fair value because
of the short maturity of these instruments.

Investment securities. The fair value of investment securities is estimated
based on quoted market prices, dealer quotes and other estimates.

Loan receivables. The fair value of loan receivables is estimated based on
quoted market prices, dealer quotes or by discounting the future cash flows
using current interest rates at which similar loans would be made to borrowers
with similar credit ratings.

Long-term debt. The fair value of long-term debt is estimated based on quoted
dealer prices for the same or similar issues.

Interest rate swap and swap option agreements and foreign currency exchange
contracts. The fair values of interest rate swaps, swap options and foreign
currency exchange contracts are obtained from dealer quotes. These values
represent the estimated amount the company would receive or pay to terminate
agreements taking into consideration current interest rates, the credit
worthiness of the counterparties and current foreign currency exchange rates.

Residual and conditional commitment guarantee contracts. The fair value of
residual and conditional commitment guarantee contracts is based on the
projected fair market value of the collateral as compared to the guaranteed
amount plus a commitment fee generally required by the counterparty assuming the
guarantee.

Commitments to extend credit. The fair value of commitments to extend credit is
estimated by comparing current market conditions taking into account the
remaining terms of existing agreements and present credit worthiness of the
counterparties.

Transfer of receivables with recourse. The fair value of the recourse liability
represents the estimate of expected future losses. The company periodically
evaluates the adequacy of reserves and estimates of expected losses, if the
resulting evaluation of expected losses differs from the actual reserve,
adjustments are made to the reserve.

41

The estimated fair value of the company's financial instruments is as follows:

------------------------------------------------------------------
Carrying        Fair
December 31, 1994                                value*      value
------------------------------------------------------------------

Investment securities                        $   7,490   $   7,553
Loan receivables                             $ 265,795   $ 268,342
Long-term debt                               $(860,295)  $(855,670)
Interest rate swaps                          $  (3,180)  $ (17,855)
Foreign currency exchange contracts          $     704   $     329
Residual and conditional commitment
guarantee contracts                         $  (3,870)  $  (3,798)
Commitments to extend credit                         -   $    (450)
Transfer of receivables with recourse        $ (31,556)  $ (31,556)
------------------------------------------------------------------

------------------------------------------------------------------
Carrying          Fair
December 31, 1993                              value*        value
------------------------------------------------------------------

Investment securities                      $   8,550       $12,068
Loan receivables                           $ 206,630   $   213,509
Long-term debt                             $(947,553)  $(1,040,286)
Interest rate swaps                        $ (15,365)  $   (75,591)
Foreign currency exchange contracts        $     265      $  2,645
Residual and conditional commitment
guarantee contracts                       $  (3,733)  $    (3,741)
Commitments to extend credit                       -   $    (2,003)
Transfer of receivables with recourse      $ (30,526)  $   (30,526)
------------------------------------------------------------------

*Carrying value includes accrued interest and deferred fee income.

18. Quarterly financial data (unaudited)
................................................................................

Summarized quarterly financial data (in millions of dollars, except for per
share data) for 1994 and 1993 follows:

Three Months Ended
--------------------------------------------------------------------------
1994                            March 31   June 30     Sept. 30    Dec. 31
--------------------------------------------------------------------------

Total revenue                      $ 745      $818         $806       $902
Cost of sales and rentals
and financing                     $ 286      $330         $312       $366
Income from
continuing operations             $  82      $ 87         $ 85       $ 94
Discontinued operations               10        12           11         13
Effect of a change in
accounting for
postemployment benefits            (120)        -            -          -
--------------------------------------------------------------------------
Net income                         $ (28)     $ 99         $ 96       $107
==========================================================================
Income per common and
common equivalent share:
Continuing operations            $ .51      $.55         $.54       $.61
Discontinued operations            .07       .07          .07        .08
Effect of a change in
accounting for post-
employment benefits              (.75)        -            -          -
--------------------------------------------------------------------------
Net income                         $(.17)     $.62         $.61       $.69
==========================================================================

Three Months Ended
--------------------------------------------------------------------------
1993                            March 31   June 30     Sept. 30    Dec. 31
--------------------------------------------------------------------------

Total revenue                       $703      $739         $724       $834
Cost of sales and rentals
and financing                      $261      $282         $265       $313
Income from
continuing operations              $ 70      $ 76         $ 59       $101
Discontinued operations               12        11           10         14
--------------------------------------------------------------------------
Net income                          $ 82      $ 87         $ 69       $115
==========================================================================
Income per common and
common equivalent share:
Continuing operations             $.44      $.48         $.37       $.63
Discontinued operations            .08       .07          .06        .09
--------------------------------------------------------------------------
Net income                        $.52      $.55         $.43       $.72
==========================================================================

Report of Independent Accountants
................................................................................

Price Waterhouse LLP   LOGO MARK

To the Stockholders and Board of Directors of Pitney Bowes Inc.:

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of Pitney Bowes
Inc. and its subsidiaries at December 31, 1994 and 1993, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1994, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.

As discussed in Note 10 to the consolidated financial statements, the company
adopted a new accounting standard for postemployment benefits in 1994 and
elected to adopt a new accounting standard for postretirement benefits other
than pensions in 1992.

/s/Price Waterhouse

Stamford, Connecticut
January 31, 1995

42

DIRECTORS AND OFFICERS

Directors
................................................................................

Linda G. Alvarado
President
Alvarado Construction, Inc.
commercial and industrial general contractor

Marc C. Breslawsky
Vice Chairman
Pitney Bowes Inc.

William E. Butler
Chairman and Chief Executive Officer
Eaton Corporation
manufacturer of engineered products serving automotive, industrial, commercial
and defense markets

Colin G. Campbell
President
Rockefeller Brothers Fund

Michael J. Critelli
Vice Chairman
Pitney Bowes Inc.

John C. Emery, Jr.
Vice Chairman
The Robbins Company
and former Chairman, President
and Chief Executive Officer
Emery Air Freight Corporation

George B. Harvey
Chairman, President
and Chief Executive Officer
Pitney Bowes Inc.

Charles E. Hugel
Retired Chairman
and Chief Executive Officer
Combustion Engineering, Inc.
principal products are power generation and process equipment and systems

David T. Kimball
Retired Chairman and
Chief Executive Officer
General Signal Corporation
manufacturer of instrumentation and control systems and industrial equipment

Leroy D. Nunery
Vice President, Human
and Information Resources
National Basketball Association

Phyllis Shapiro Sewell
Retired Senior Vice President
Federated Department Stores, Inc.
retailer

Arthur R. Taylor
President, Muhlenberg College
and Chairman, Arthur Taylor & Co.
investment firm

Corporate Officers
................................................................................

George B. Harvey
Chairman, President and
Chief Executive Officer

Carmine F. Adimando
Vice President - Finance
and Administration, and Treasurer

Marc C. Breslawsky
Vice Chairman

Michael J. Critelli
Vice Chairman

Steven J. Green
Vice President - Controller

Douglas A. Riggs
Vice President - Communications,
Planning, Secretary and General Counsel

Carole F. St. Mark
President and Chief Executive Officer
Pitney Bowes Business Services

Johnna G. Torsone
Vice President - Personnel

43

STOCKHOLDER INFORMATION

World Headquarters
................................................................................

Pitney Bowes Inc
1 Elmcroft RD
Stamford CT  06926-0700
(203) 356-5000

Annual Meeting
................................................................................

Stockholders are cordially invited to attend the 1995 Annual Meeting at 10:00
a.m., Monday, May 8, 1995, at Pitney Bowes World Headquarters in Stamford,
Connecticut.  A notice of the meeting, proxy statement and proxy will be mailed
to each stockholder under separate cover.

10-K Report
................................................................................

The Form 10-K report, to be filed by Pitney Bowes with the Securities and
Exchange Commission, will provide certain additional information.  Stockholders
may obtain copies of this report without charge by writing to:

MSC 6140
Investor Relations
Pitney Bowes Inc
1 Elmcroft RD
Stamford CT  06926-0700

Stock Exchanges
................................................................................

Pitney Bowes common stock is traded under the symbol "PBI."  The stock is listed
on the New York Stock Exchange.  It is also traded on the Chicago, Philadelphia,
Boston, Pacific and Cincinnati stock exchanges.

Comments
................................................................................

Comments concerning the Annual Report should be addressed to:

MSC 6309
Director
Investor Communications
and Advertising
Pitney Bowes Inc
1 Elmcroft RD
Stamford CT  06926-0700

Stockholder Inquiries
................................................................................

Common, preference and preferred stockholders may call the company's registrar
and transfer agent Chemical Bank at (800) 648-8170 or may write to the
following addresses:

For lost securities requirements and securities processing (transfers,
redemptions, conversions):

Chemical Bank
JAF Building
PO BOX 2862
New York NY  10116-2862

For change of address and account consolidations (combining two or more
accounts):

Chemical Bank
JAF Building
PO BOX 3070
New York NY  10116-3070

For transfer inquiries, replacement dividend checks, tax information and other
inquiries:

Chemical Bank
JAF Building
PO BOX 3068
New York NY  10116-3068

For dividend reinvestment enrollment requests and other dividend reinvestment
information:

Chemical Bank
JAF Building
PO BOX 3069
New York NY  10116-3069

Stockholders may contact Pitney Bowes Stockholder Services at:

MSC 6313
Stockholder Services
Pitney Bowes Inc
1 Elmcroft RD
Stamford CT  06926-0700
(203) 351-6088

Investor Inquiries
................................................................................

All investor inquiries about Pitney Bowes should be addressed to:

MSC 6140
Investor Relations
Pitney Bowes Inc
1 Elmcroft RD
Stamford CT  06926-0700

Transfer Agent, Registrar, Dividend Reinvestment Agent and Successor Rights
Agent
................................................................................

Common, Preference and Preferred Stock

Equity Services
Chemical Bank
450 West 33RD ST  FL 15
New York NY  10001-2697

Stock Information
................................................................................

Dividends per common share

Quarter                          1994     1993
----------------------------------------------

First                           $ .26    $.225
Second                            .26     .225
Third                             .26     .225
Fourth                            .26     .225
--------------
Total                           $1.04    $ .90
--------------

Quarterly price ranges of
common stock

1994
---------------
Quarter                          High      Low
----------------------------------------------

First                          46 3/8   39 7/8
Second                         42 3/8       37
Third                          39 1/4   34 1/2
Fourth                         36 1/2   29 1/4

1993
---------------
Quarter                          High      Low
----------------------------------------------

First                          43 3/8   38 3/4
Second                         44 1/2   39 5/8
Third                              44   37 1/4
Fourth                         43 3/4   36 1/4

Trademarks
................................................................................

7 SERIES, 8 SERIES, ADDRESSRIGHT, ARRIVAL, BUSINESS BASICS, CUSTOMER
SATISFACTION GUARANTEE, PARAGON, POSTAGE BY PHONE, SEND-IT, SMART TOUCH,
SPECTRUM, STAR and VALUE ADDED MAINTENANCE SYSTEM are trademarks or service
marks of Pitney Bowes Inc.

44

EXHIBIT (iv)
Page 1 of 3
PITNEY BOWES INC.
SUBSIDIARIES OF THE REGISTRANT

The Registrant, Pitney Bowes Inc., a Delaware Corporation, has no parent.

The following are subsidiaries of the Registrant
(as of December 31, 1994)

Country or
state of
Company name                                  incorporation

Adrema Leasing Corporation                     Delaware
Adrema Maschinen und Auto-Leasing GmbH         Germany
Adrema Maschinenbau Inc.                       Delaware
Adrema Mobilien Leasing GmbH                   Germany
Andeen Enterprises, Inc.                       Panama
Artec International Corporation                California
Atlantic Mortgage & Investment Corporation     Florida
B. Williams Corp.                              Delaware
Canadian Office Services Ltd.                  Canada
Cascade Microfilm Systems, Inc.                California
Chas. P. Young Health Fitness &
Management, Inc.                            New York
Colonial Pacific Leasing Corporation           Massachusetts
Datarite Systems Ltd.                          England
Dictaphone Canada Ltd./Ltee.                   Canada
Dictaphone Company Ltd.                        England
Dictaphone Corporation                         Delaware
Dictaphone Deutschland GmbH                    Germany
Dictaphone International A.G.                  Switzerland
Dictaphone Netherlands B.V.                    Netherlands
Dodwell Pitney Bowes K.K. (50% owned)          Japan
DSP Inc.                                       Connecticut
ECL Finance Company, N.V.                      Netherlands
Elmcroft Road Realty Corporation               Connecticut
Harlow Aircraft Inc.                           Delaware
Informatech                                    California
La Agricultora Ecuatoriana S.A.                Ecuador
Monarch Marking Systems Australia Pty. Ltd.    Australia
Monarch Marking Systems de Mexico S.A. de C.V. Mexico
Monarch Marking Systems, Inc.                  Delaware
Monarch Marking Systems Ltd.                   Canada
Monarch Marking Systems N.Z. Ltd.              New Zealand
Monarch Marking (S.E.A.) Pte. Ltd.(55% owned)  Singapore
Monarch Service Bureau Limited                 Hong Kong
Norlin Australia Investment Pty. Ltd.          Australia
Norlin Industries Limited                      Canada
Norlin Music (U.K.) Ltd.                       England
PB Forms, Inc.                                 Nebraska
PB Funding Corporation                         Delaware
PB Global Holdings Inc.                        Connecticut
PB Global Holdings II Inc.                     Connecticut
PB Global Holdings III Inc.                    Connecticut

EXHIBIT (iv)
Page 2 of 3
SUBSIDIARIES OF THE REGISTRANT (continued)
Country or
state of
Company name                                   incorporation

PB Global Holdings IV Inc.                     Connecticut
PB Leasing Corporation                         Delaware
PB Leasing International Corporation           Delaware
PB Leasing Services Inc.                       Nevada
PBA Foreign Sales Corporation                  Barbados
PB World Trade Corporation (Disc)              Delaware
PB CFSC I Inc.                                 Virgin Islands
PBL Holdings Inc.                              Nevada
PB Nikko FSC Ltd.                              Bermuda
PB Nihon FSC Ltd.                              Bermuda
Pickering Canada Pty. Limited                  Australia
Pitney Bowes AG                                Switzerland
Pitney Bowes Australia Pty. Limited            Australia
Pitney Bowes Australia FAS Pty. Ltd.           Australia
Pitney Bowes Austria Ges.m.b.H                 Austria
Pitney Bowes of Canada Ltd.                    Canada
Pitney Bowes China Inc.                        Delaware
Pitney Bowes Credit Australia Limited          Australia
Pitney Bowes Credit Corporation                Delaware
Pitney Bowes Data Systems, Ltd.                England
Pitney Bowes de Mexico, S.A. de C.V.           Mexico
Pitney Bowes Deutschland GmbH                  Germany
Pitney Bowes Espana, S.A.                      Spain
Pitney Bowes Finance S.A.                      France
Pitney Bowes Finans Norway AS                  Norway
Pitney Bowes Finance PLC                       England
Pitney Bowes France S.A.                       France
Pitney Bowes Holdings Ltd.                     England
Pitney Bowes Holding SNC                       France
Pitney Bowes Hong Kong Inc.                    Delaware
Pitney Bowes Insurance Agency, Inc.            Connecticut
Pitney Bowes International                     Ireland
Pitney Bowes Italia S.r.l.                     Italy
Pitney Bowes (Ireland) Limited                 Ireland
Pitney Bowes Leasing Ltd.                      Canada
Pitney Bowes Locations S.A.                    France
Pitney Bowes Management Services, Inc.         Delaware
Pitney Bowes Management Services Canada, Inc.  Canada
Pitney Bowes Management Services Limited       England
Pitney Bowes Marking Systems Ltd.              Delaware
Pitney Bowes Marking Systems Ltd.              England
Pitney Bowes Oy                                Finland
Pitney Bowes plc                               England
Pitney Bowes Properties Inc.                   Connecticut
Pitney Bowes Real Estate Financing Corporation Delaware
Pitney Bowes Servicios, S.A. de C.V.           Mexico
Pitney Bowes Shelton Realty Inc.               Connecticut
Pitney Bowes Svenska Aktiebolag                Sweden

EXHIBIT (iv)
Page 3 of 3
SUBSIDIARIES OF THE REGISTRANT (continued)
Country or
state of
Company name                                   incorporation

Pitney Bowes World Trade Corporation (FSC)     Virgin Islands
PREFCO I Inc.                                  Delaware
PREFCO I LP Inc.                               Delaware
PREFCO II Inc.                                 Delaware
PREFCO II LP Inc.                              Delaware
PREFCO III Inc.                                Delaware
PREFCO III LP Inc.                             Delaware
PREFCO IV Inc.                                 Delaware
PREFCO IV LP Inc.                              Delaware
PREFCO V Inc.                                  Delaware
PREFCO V LP Inc.                               Delaware
PREFCO VI Inc.                                 Delaware
PREFCO VI LP Inc.                              Delaware
PREFCO VII Inc.                                Delaware
PREFCO VII LP Inc.                             Delaware
PREFCO VIII Inc.                               Delaware
PREFCO VIII LP Inc.                            Delaware
PREFCO IX Inc.                                 Delaware
PREFCO IX LP Inc.                              Delaware
PREFCO X Inc.                                  Delaware
PREFCO X LP Inc.                               Delaware
PREFCO XI Inc.                                 Delaware
PREFCO XI LP Inc.                              Delaware
PREFCO XII Inc.                                Delaware
PREFCO XII LP Inc.                             Delaware
PREFCO XIII Inc.                               Delaware
PREFCO XIII LP Inc.                            Delaware
PREFCO XIV Inc.                                Delaware
PREFCO XIV LP Inc.                             Delaware
PREFCO XV Inc.                                 Delaware
PREFCO XV LP Inc.                              Delaware
RE Properties Management Corporation           Delaware
Remington Customer Finance Pty. Limited        Australia
Remington (PNG) Pty. Limited                   Papua New Guinea
Remington Pty. Limited                         Australia
ROM Holdings Pty. Limited                      Australia
ROM Securities Pty. Limited                    Australia
Sales and Service Training Center Inc.         Georgia
TECO/Pitney Bowes Co., Ltd. (50% owned)        Taiwan
Time-Sensitive Delivery Guide Inc.             Delaware
Tower FSC, Ltd.                                Bermuda
Universal Postal Frankers Ltd.                 England
Walnut Street Corp.                            Delaware
1136 Corporation                               Delaware
75 V Corp.                                     Delaware

EXHIBIT (v)
CONSENT OF INDEPENDENT ACCOUNTANTS

We  hereby  consent  to the incorporation by reference  in  the  Prospectus
constituting part of the Registration Statements on:

Form                               Reference

Form S-8                           No. 33-5291

Form S-8                           No. 33-4549

Form S-8                           No. 33-22238

Form S-8                           No. 33-5765

Form S-8                           No. 33-41182

Form S-3                           No. 33-5289

Form S-3                           No. 33-5290

Form S-3                           No. 33-18280

Form S-3                           No. 33-25730

Form S-3                           No. 33-21723

Form S-3                           No. 33-27244

Form S-3                           No. 33-33948

of  Pitney Bowes Inc. of our report dated January 31, 1995 appearing in the
Pitney Bowes Inc. 1994 Annual Report to Stockholders which is incorporated
in this Annual Report on Form 10-K.  We also consent to the incorporation
by reference in the aforementioned Registration Statements of our report on
the financial statement schedules, which appears in this Form 10-K.

/s/Price Waterhouse LLP
Price Waterhouse LLP

Stamford, Connecticut
March 30, 1995

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM PITNEY BOWES INC.
CONSOLIDATED BALANCE SHEET, CONSOLIDATED STATEMENT OF INCOME, CORRESPONDING
FOOTNOTE #3 FIXED ASSETS AND STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-END>                               DEC-31-1994
<CASH>                                          75,106
<SECURITIES>                                       639
<RECEIVABLES>                                  439,185
<ALLOWANCES>                                    16,909
<INVENTORY>                                    430,641
<CURRENT-ASSETS>                             2,083,744
<PP                                       1,218,016
<DEPRECIATION>                                 639,366
<TOTAL-ASSETS>                               7,399,720
<CURRENT-LIABILITIES>                        3,978,469
<BONDS>                                        779,217
<COMMON>                                       323,338
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                      2,838
<OTHER-SE>                                   1,418,893
<TOTAL-LIABILITY-AND-EQUITY>                 7,399,720
<SALES>                                      1,418,304
<TOTAL-REVENUES>                             3,270,613
<CGS>                                          828,221
<TOTAL-COSTS>                                1,294,291
<OTHER-EXPENSES>                             1,220,674
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                             189,141
<INCOME-PRETAX>                                566,507
<INCOME-TAX>                                   218,077
<INCOME-CONTINUING>                            348,430
<DISCONTINUED>                                  45,161
<EXTRAORDINARY>                                      0
<CHANGES>                                    (119,532)<F1>
<NET-INCOME>                                   274,059
<EPS-PRIMARY>                                     1.74
<EPS-DILUTED>                                     1.74
<FN>
<F1>Includes a change in accounting for postemployment benefits.
</FN>