Pitney Bowes
PBI
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$1.77 B
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Pitney Bowes - 10-Q quarterly report FY


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

F O R M 1 0 - Q




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

For the quarterly period ended June 30, 1996

OR

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

For the transition period from _____________ to _____________



Commission File Number: 1-3579



PITNEY BOWES INC.


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



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




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_____

Number of shares of common stock, $2 par value, outstanding as of June
30, 1996 is 149,118,964.
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 2

Pitney Bowes Inc.
Index

Page Number
Part I - Financial Information:

Consolidated Statement of Income - Three and Six
Months Ended June 30, 1996 and 1995 3

Consolidated Balance Sheet - June 30, 1996
and December 31, 1995 4

Consolidated Statement of Cash Flows -
Six Months Ended June 30, 1996 and 1995 5

Notes to Consolidated Financial Statements 6 - 7

Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 13


Part II - Other Information:

Item 1: Legal Proceedings 14

Item 4: Submission of Matters to a Vote of
Security Holders 14 - 15

Item 6: Exhibits and Reports on Form 8-K 16

Signatures 17
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 3
Part I - Financial Information
Pitney Bowes Inc.
Consolidated Statement of Income
(Unaudited)
<TABLE>
(Dollars in thousands, except per share data)
<CAPTION> Three Months Ended June 30, Six Months Ended June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenue from:
Sales $ 410,649 $ 371,405 $ 794,653 $ 734,801
Rentals and financing 415,266 381,939 824,344 751,878
Support services 117,022 109,259 230,205 214,836

Total revenue 942,937 862,603 1,849,202 1,701,515

Costs and expenses:
Cost of sales 258,039 233,551 496,803 446,277
Cost of rentals and financing 114,575 106,591 240,327 212,802
Selling, service and administrative 320,091 287,327 631,107 577,892
Research and development 20,637 21,643 39,347 41,982
Interest, net 47,399 59,876 95,983 118,961

Total costs and expenses 760,741 708,988 1,503,567 1,397,914

Income from continuing operations
before income taxes 182,196 153,615 345,635 303,601
Provision for income taxes 63,663 55,266 120,593 109,263

Income from continuing operations 118,533 98,349 225,042 194,338
Discontinued operations - 10,675 - 20,997

Net income $ 118,533 $ 109,024 $ 225,042 $ 215,335

Income per common and common equivalent
share:
Income from continuing operations $ .79 $ .65 $ 1.49 $ 1.28
Discontinued operations - .07 - .14

Net income $ .79 $ .72 $ 1.49 $ 1.42

Average common and common equivalent
shares outstanding 150,945,114 152,253,551 151,171,536 152,172,775

Dividends declared per share of common
stock $ .345 $ .30 $ .69 $ .60

Ratio of earnings to fixed charges 3.89 3.12 3.73 3.11
</TABLE>
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 4
Pitney Bowes Inc.
Consolidated Balance Sheet
(Unaudited)
<TABLE>
June 30, December 31,
(Dollars in thousands) 1996 1995
<CAPTION>
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 92,787 $ 85,352
Short-term investments, at cost which
approximates market 996 3,201
Accounts receivable, less allowances:
6/96, $13,880; 12/95, $13,050 356,750 386,727
Finance receivables, less allowances:
6/96, $38,155; 12/95, $37,699 1,346,815 1,208,532
Inventories (Note 2) 289,310 311,271
Other current assets and prepayments 104,269 106,014

Total current assets 2,190,927 2,101,097

Property, plant and equipment, net
(Note 3) 494,218 495,001
Rental equipment and related
inventories, net (Note 3) 789,665 773,337
Property leased under capital
leases, net (Note 3) 7,815 7,876
Long-term finance receivables, less
allowances:
6/96, $70,830; 12/95, $75,807 3,289,823 3,390,597
Investment in leveraged leases 589,966 570,008
Goodwill, net of amortization:
6/96, $33,646; 12/95, $30,504 211,840 208,698
Other assets 314,204 298,034

Total assets $7,888,458 $7,844,648

Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued
liabilities $ 741,690 $ 818,122
Income taxes payable 236,440 232,794
Notes payable and current portion of
long-term obligations 2,390,441 2,138,065
Advance billings 325,509 312,595

Total current liabilities 3,694,080 3,501,576

Deferred taxes on income 654,741 612,811
Long-term debt 801,455 1,048,515
Other noncurrent liabilities 399,670 410,646

Total liabilities 5,549,946 5,573,548

Preferred stockholders' equity in a
subsidiary company 200,000 200,000

Stockholders' equity:
Cumulative preferred stock, $50 par
value, 4% convertible 47 47
Cumulative preference stock, no par
value, $2.12 convertible 2,457 2,547
Common stock, $2 par value 323,338 323,338
Capital in excess of par value 26,908 30,299
Retained earnings 2,308,528 2,186,996
Cumulative translation adjustments (49,397) (46,991)
Treasury stock, at cost (473,369) (425,136)

Total stockholders' equity 2,138,512 2,071,100

Total liabilities and stockholders'
equity $7,888,458 $7,844,648

</TABLE>
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 5
Pitney Bowes Inc.
Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
(Dollars in thousands)
Six Months Ended June 30,
<CAPTION> 1996 1995(*)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 225,042 $ 215,335
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 135,337 129,492
Net change in the strategic focus
initiative (9,871) (20,481)
Increase in deferred taxes on
income 41,748 29,546
Change in assets and liabilities:
Accounts receivable 29,588 12,575
Sales-type lease receivables (23,534) (32,047)
Inventories 21,449 (19,853)
Other current assets and
prepayments 3,487 5,002
Accounts payable and accrued
liabilities (66,059) (117,748)
Income taxes payable 3,548 30,552
Advance billings 13,336 10,397
Other, net (44,401) (35,155)

Net cash provided by operating
activities 329,670 207,615

Cash flows from investing activities:
Short-term investments 2,161 (746)
Net investment in fixed assets (134,749) (158,870)
Net investment in direct-finance
lease receivables (13,163) (140,168)
Investment in leveraged leases (22,391) (29,616)
Proceeds from sale of subsidiary - 127,000

Net cash used in investing
activities (168,142) (202,400)

Cash flows from financing activities:
Increase (decrease) in notes payable 12,117 (308,402)
Proceeds from long-term obligations - 275,000
Principal payments on long-term
obligations (8,114) (24,322)
Proceeds from issuance of stock 21,251 19,128
Stock repurchases (75,339) (14,932)
Proceeds from preferred stock issued
by a subsidiary - 200,000
Dividends paid (103,510) (90,748)

Net cash (used in) provided by
financing activities (153,595) 55,724

Effect of exchange rate changes on cash (498) 760

Increase in cash and cash equivalents 7,435 61,699

Cash and cash equivalents at beginning
of period 85,352 75,106

Cash and cash equivalents at end of
period $ 92,787 $ 136,805

Interest paid $ 103,700 $ 130,437

Income taxes paid $ 77,075 $ 60,976

</TABLE>

[FN]
(*) Certain prior year amounts have been reclassified to conform with the
1996 presentation.
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 6

Pitney Bowes Inc.
Notes to Consolidated Financial Statements
Note 1:
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of Pitney Bowes Inc. ("the company"), all adjustments
(consisting of only normal recurring adjustments) necessary to present
fairly the financial position of the company as of June 30, 1996 and the
results of its operations and cash flows for the six months ended June
30, 1996 and 1995 have been included. Operating results for the six
months ended June 30, 1996 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1996. These
statements should be read in conjunction with the financial statements
and notes thereto included in the company's Annual Report to
Stockholders and Form 10-K Annual Report for the year ended December 31,
1995.

Note 2:
<TABLE>
Inventories are comprised of the following:
<CAPTION>
(Dollars in thousands) June 30, December 31,
1996 1995
<S> <C> <C>
Raw materials and work in process $ 64,892 $ 57,203
Supplies and service parts 90,560 87,863
Finished products 133,858 166,205

Total $289,310 $311,271
</TABLE>
Note 3:
<TABLE>
Fixed assets are comprised of the following:
<CAPTION>
(Dollars in thousands) June 30, December 31,
1996 1995
<S> <C> <C>
Property, plant and equipment $1,086,105 $1,072,229
Accumulated depreciation (591,887) (577,228)

Property, plant and equipment, net $ 494,218 $ 495,001

Rental equipment and related
inventories $1,638,478 $1,591,321
Accumulated depreciation (848,813) (817,984)

Rental equipment and related
inventories, net $ 789,665 $ 773,337

Property leased under capital
leases $ 26,143 $ 25,468
Accumulated amortization (18,328) (17,592)

Property leased under capital
leases, net $ 7,815 $ 7,876
</TABLE>
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 7

Note 4:
The company adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" on January 1, 1996. The company periodically
reviews the fair value of long-lived assets the result of which has had
no material affect on the company's reported results.

The company adopted Statement of Financial Accounting Standards No.
122, "Accounting for Mortgage Servicing Rights" (FAS 122) on January 1,
1996. FAS 122 requires that capitalized mortgage servicing rights be
assessed periodically for impairment based on the fair value of those
rights. Based on an evaluation performed as of June 30, 1996, no
impairment was recognized in the company's mortgage servicing rights
portfolio.

The company also adopted Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" (FAS 123), on January 1,
1996. Under FAS 123, companies can elect, but are not required, to
recognize compensation expense for all stock-based awards, using a fair
value methodology. The company has adopted the disclosure only
provisions, as permitted by FAS 123. These disclosures will be
included in the company's 1996 annual report to stockholders.
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 8


Pitney Bowes Inc.
Management's Discussion and Analysis of Financial
Condition and Results of Operations

Results of Continuing Operations - second quarter of 1996 vs. second
quarter of 1995.

Revenue increased nine percent to $942.9 million in 1996 compared to
$862.6 million in the second quarter of 1995. Income from continuing
operations increased 21 percent to $118.5 million in 1996 from $98.3
million in the second quarter of 1995.

Sales revenue increased 11 percent in 1996, essentially all of which
was the result of volume growth. The facilities management business
recorded a 19 percent increase in sales as it continued to expand its
contract base, especially in the commercial market. In addition, sales
revenue was enhanced by strong sales of production mail systems as well
as significant growth in the international mailing business.

Rentals and financing revenue increased nine percent from the prior
year. Rental revenue growth reflected a greater number of higher
yielding Postage By Phone(R) meters on rental. Second quarter 1996 was
also favorably affected by the placement of a higher number of plain
paper facsimile systems in service and by price increases. The
increase in financing revenue was principally due to a higher base of
small-ticket equipment under lease, an increased contribution from non-
interest sensitive revenue sources, and the sale of the Custom
Vendor Finance (CVF) operations of Pitney Bowes Credit Corporation in
May 1996.

Support services revenue rose seven percent from the prior year. The
revenue growth was attributable to volume increases primarily at
production mail and the acquisition in 1995 of a former Japanese joint
venture.

The ratio of cost of sales to sales revenue decreased to 62.8 percent
in the second quarter of 1996 from 62.9 percent in the second quarter
of 1995. The improvement in this ratio reflects higher price
realization from domestic mailing equipment sales as well as lower
copier equipment costs related to a weaker yen. This improvement in
the ratio is partially offset by the growth of the company's facilities
management business, which includes most of its expenses in cost of
sales.

The ratio of cost of rentals and financing to rentals and financing
revenue decreased to 27.6 percent in 1996 from 27.9 percent in 1995,
primarily as a result of the CVF sale mentioned above.
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 9


Selling, service and administrative expenses were 33.9 percent of
revenue in the second quarter of 1996 compared to 33.3 percent in the
second quarter of 1995. The increase in this ratio was due to higher
expenses related to direct marketing, the inclusion of a dividend
payment on preferred stock of a subsidiary company and strategic
expenditures which are expected to have a favorable impact on future
revenue and costs and expenses.

Research and development expenses decreased five percent to $20.6
million in the second quarter of 1996 from $21.6 million in the second
quarter of 1995. This decrease reflected higher 1995 expenditures for
new products approaching the end of their development cycle. In
addition, the company has maintained its cost containment programs
while continuing to significantly invest in cost effective, advanced
product development with emphasis on electronic and digital technology
and software development.

Net interest expense decreased to $47.4 million in the second quarter
of 1996 from $59.9 million in 1995. This decrease was due to lower
interest rates, lower average borrowing levels in 1996 reflecting the
impact of the cash generated by the sales of Dictaphone Corporation
(Dictaphone) and Monarch Marking Systems, Inc. (Monarch) in the latter
half of 1995 and the issuance of preferred stock in a subsidiary of the
company to outside institutional investors. The consolidated statement
of income reflects these preferred stock dividends as a minority
interest in "selling, service, and administrative" expense.

The second quarter effective tax rate was 34.9 percent in 1996 compared
to 36.0 percent in 1995. The improvement in the 1996 effective rate
was primarily due to tax benefits attributable to foreign operations.

Results of Continuing Operations - six months of 1996 vs. six months of
1995.

For the first six months of 1996 compared with the same period of 1995,
revenue increased nine percent while income from continuing operations
increased 16 percent to $225.0 million. The factors that affected
revenue and earnings performance included those cited for the second
quarter of 1996 versus 1995. In addition, first quarter 1995 revenue
included approximately $30 million in PROM (memory chip) sales
attributable to the January 1, 1995 United States postal rate change.

Nonrecurring Item

As of June 30, 1996, the company has made severance and benefit
payments of approximately $58.3 million to 1,500 employees
separated under the strategic focus initiatives commenced in 1994.
Approximately 400 employees with the requisite enhanced skills have
been hired to manufacture and service advanced product offerings. The
company has substantially completed its actions contemplated under the
strategic initiatives.
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 10


Accounting Changes

The company adopted Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of" on January 1, 1996. The company
periodically reviews the fair value of long-lived assets the results of
which have had no material affect on the company's reported results.

The company adopted Statement of Financial Accounting Standards
No. 122, "Accounting for Mortgage Servicing Rights" (FAS 122) on
January 1, 1996. FAS 122 requires that capitalized mortgage servicing
rights be assessed periodically for impairment based on the fair value
of those rights. Based on an evaluation performed as of June 30, 1996,
no impairment was recognized in the company's mortgage servicing rights
portfolio.

The company also adopted Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" (FAS 123), on
January 1, 1996. Under FAS 123, companies can, but are not required
to, elect to recognize compensation expense for all stock-based awards,
using a fair value methodology. The company has adopted the
disclosure only provisions, as permitted by FAS 123. These
disclosures will be included in the company's 1996 annual report.

Liquidity and Capital Resources

The current ratio remained essentially unchanged at June 30, 1996 and
December 31, 1995 at .59 to 1 and .60 to 1, respectively. Working
capital has decreased since year-end 1995 primarily due to the
reclassification of $200 million of notes due in February 1997 to
current portion of long term debt.

As part of the company's non-financial services shelf registrations, a
medium-term note facility exists permitting issuance of up to $100
million in debt securities with maturities ranging from more than one
year up to 30 years of which $32 million remain available at June 30,
1996. The company also has an additional $300 million remaining on its
non-financial services shelf registrations filed with the Securities
and Exchange Commission (SEC). Amounts available under credit
agreements, shelf registrations and commercial paper and medium-term
note programs, in addition to cash generated internally and by the
sales of Monarch and Dictaphone, are expected to be sufficient to
provide for financing needs in the next several years.

In July 1996, Pitney Bowes Credit Corporation (PBCC) issued $200
million of medium-term notes due in July, 1999 and $100 million of
medium-term notes due in July, 2001 with coupon rates of 6.54 percent
and 6.78 percent, respectively.
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 11

Subsequent to the July 1996 issuance, PBCC has $450 million of unissued
debt securities available from a shelf registration statement filed
with the SEC in September 1995. Up to $200 million of medium-term
notes may be offered under this registration statement. The $450
million available under this shelf registration statement should meet
PBCC's financing needs for the next two years. PBCC also had unused
lines of credit and revolving credit facilities totaling $1.7 billion
at June 30, 1996, largely supporting its commercial paper borrowings.

The ratio of total debt to total debt and stockholders' equity
including the preferred stockholders' equity in a subsidiary company in
total debt, was 61.4% at June 30, 1996 compared to 62.2% at December
31, 1995. This ratio was favorably affected by the proceeds from the
sales of Dictaphone and Monarch which were used primarily to repay
short-term debt, partially offset by the repurchase of approximately
1,556,000 shares of common stock for $75.3 million in the first half of
1996. Book value per common share increased to $14.32 at June 30, 1996
from $13.79 at year-end 1995 principally due to year-to-date income
offset by the repurchase of common shares as noted above.

The company enters into interest rate swap agreements principally
through its financial services businesses. 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 the company's 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.

Capital Investments

In the first half of 1996, net investments in fixed assets included
$40.8 million in net additions to property, plant and equipment and
$93.5 million in net additions to rental equipment and related
inventories compared with $61.4 million and $94.8 million during the
same period in 1995, respectively. The decrease in net additions to
property, plant and equipment was due to the completion of a new
facility in 1995. In the case of rental equipment, the additions
included the production of postage meters and purchase of facsimile and
copier equipment for both new placements and upgrade programs.

At June 30, 1996, commitments for the acquisition of property, plant
and equipment included plant and manufacturing equipment improvements,
as well as rental equipment for new and replacement programs.
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 12


Legal and Regulatory Matters

The company has been advised by the Antitrust Division of the U.S.
Department of Justice that its civil investigation of Pitney Bowes'
postage equipment business has been closed. The investigation was
concluded without any findings that Pitney Bowes violated the surviving
provisions of the 1959 consent decree between the company and the U.S.
Department of Justice, and/or the antitrust laws.

In June, 1995, the United States Postal Service (U.S.P.S.) issued final
revised regulations addressing the manufacture, distribution and use of
postage meters. The regulations cover four general categories: meter
security, administrative controls, Computerized Meter Resetting Systems
(C.M.R.S.) and other issues. In general, the regulations impose
reporting and performance obligations on meter manufacturers, prescribe
potential administrative sanctions for failure to meet these
obligations and require a restructuring of the fund management system
of C.M.R.S., such as the company's Postage by Phone System, to give the
U.S.P.S. more direct control over meter licensee deposits. The company
is working with the U.S.P.S. to ensure that the implementation of these
regulations provides mailing customers and the U.S.P.S. with the
intended benefits, and that Pitney Bowes also benefits. The company
has undertaken a number of actions to implement these changes,
including modifying its Postage by Phone System. Customers now deposit
prepayments of postage into a U.S.P.S. account rather than a trust
account. The company's resetting of Postage by Phone meters still
requires the customer to request an authorization and reset code from
the company, a service for which the company charges a fee. The
company continues to believe that the financial impact to the company
resulting from implementation of these regulations will not be
material.

The company also continues to work with the U.S.P.S. to devise a multi-
year migration schedule to phase out mechanical meters in the United
States and replace them with electronic or digital meters in a manner
that is most beneficial and least disruptive to the operations of the
company's customers. This is consistent with the company's strategy of
introducing new technology into the marketplace to add value to
customers' operations and meet postal needs. This strategy and the
company's long-term focus has resulted in an increase in the percentage
of the electronic meters in the current U.S. base from six percent of
the overall base in 1986 to nearly 50 percent of the installed meter
base in 1995.

In May 1996, the U.S.P.S. issued a proposed schedule for the phase out
of mechanical meters in the United States marketplace. The schedule
proposes that (i) as of June 1, 1996, placements of mechanical meters
will be available only as replacements for existing licensed mechanical
meters; (ii) as of March 1, 1997, mechanical meters may not be used by
persons or firms who process mail for a fee; (iii) as of December 31,
1997, mechanical meters that interface with mail machines or processors
will no longer be approved; and (iv) as of March 1, 1999, all other
mechanical meters (stand alone meters) will no longer be approved. The
company has voluntarily ceased marketing and making new placements of
mechanical meters in the United States as of June 1, 1996. The company
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 13


intends to continue to work with the U.S.P.S. to devise a final
mechanical meter migration schedule that is most beneficial to our
customers and minimizes any negative impact to the company. Until such
time as a final mechanical meter migration plan is completed, the
financial impact, if any, on the company cannot be determined with any
certainty; but it is currently the belief of the company that such migration
plan will not cause a material adverse financial impact.

The May 1996 U.S.P.S. proposal also contemplates the evolution of
metering technology to include a digital information based indicia
standard which has not yet been developed. In July 1996, the U.S.P.S.
proposed initial specifications for a digital information based indicia
program. The U.S.P.S.
anticipates that digital metering would eventually replace electronic
metering in the United States at some undetermined date in the future.
The company's long-term strategy also envisions the use of digital
technology in new product offerings; the company anticipates working
with the U.S.P.S. in this effort to achieve a timely and effective
substitution plan. However, until final standards for a digital
information based indicia program are completed, and
transition to the new standard is clarified by the U.S.P.S., the impact
of this proposal, if any, on the company cannot be determined.


The company wishes to caution readers that any forward-looking
statements contained in this Form 10-Q or made by the management of the
company involve risks and uncertainties, and are subject to change
based on various important factors. The following factors, among
others, could affect the company's financial results and could cause
the company's financial performance to differ materially from the
expectations expressed in any forward-looking statement made by or on
behalf of the company -- the strength of worldwide economies; the
effects of and changes in trade, monetary and fiscal policies and laws,
and inflation and monetary fluctuations; the timely development of and
acceptance of new Pitney Bowes products and the perceived overall value
of these products by users including the features, pricing, and quality
compared to competitors' products; the willingness of users to
substitute competitors' products for Pitney Bowes products; the success
of the company in gaining approval of its products in new markets where
regulatory approval is required; the ability of the company to
successfully enter new markets, including the ability to efficiently
distribute and finance its products; the impact of changes in postal
regulations around the world that directly regulate the manufacture,
ownership and or distribution of postage meters, or that regulate
postal rates and discounts; the willingness of mailers to utilize
alternative means of communication; and the company's success at
managing customer credit risk.
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 14


Part II - Other Information


Item 1: Legal Proceedings

The company is currently a defendant in a number of lawsuits arising in
the ordinary course of business, 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 by the Antitrust Division of the U.S.
Department of Justice that its civil investigation of Pitney Bowes'
postage equipment business has been closed. The investigation was
concluded without any findings that Pitney Bowes violated the surviving
provisions of the 1959 consent decree between the company and the U.S.
Department of Justice, and/or the antitrust laws.


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

Below are the final results of the voting at the annual meeting of
shareholders held on May 13, 1996:

Proposal 1 - Election of Directors

Nominee For Withheld


Michael J. Critelli 115,246,883 11,800,384
George B. Harvey 115,203,912 11,843,355
Michael I. Roth 115,237,998 11,809,269
Phyllis S. Sewell 115,190,319 11,856,948


Proposal 2 - Appointment of Price Waterhouse LLP as Independent
Accountants

For Withheld Abstain

126,508,573 250,928 287,766
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 15



Proposal 3 - Proposal to Approve Adoption of the 1996 Pitney Bowes
Employee Stock Purchase Plan

For Withheld Abstain

120,823,328 5,561,570 662,369


Proposal 4 - Proposal to Approve Amendment to the Pitney Bowes
1991 Stock Plan

For Withheld Abstain

121,337,186 4,762,280 947,801


Proposal 5 - Proposal to Approve Amendment to the Pitney Bowes
Inc. Key Employees' Incentive Plan

For Withheld Abstain

117,174,545 8,930,669 942,053

There were no broker non-votes on any proposals.

The following other directors continued their term of office after the
annual meeting:

Linda G. Alvarado Charles E. Hugel
Marc C. Breslawsky David T. Kimball
William E. Butler Leroy D. Nunery
Colin G. Campbell Arthur R. Taylor
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 16


Item 6: Exhibits and Reports on Form 8-K.

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

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

(3)(a) Restated Certificate of See Exhibit (i)
Incorporation, as amended. on page 18.


(11) Computation of earnings See Exhibit (ii)
per share. on page 49.

(12) Computation of ratio of See Exhibit (iii)
earnings to fixed charges. on page 50.
(27) Financial Data Schedule See Exhibit (iv)
on page 51.

(b) Reports on Form 8-K.

No reports on Form 8-K were filed for the three months ended June
30, 1996.
Pitney Bowes Inc. - Form 10-Q
Six Months Ended June 30, 1996
Page 17






Signatures



Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.





PITNEY BOWES INC.




August 14, 1996




/s/ C. F. Adimando
C. F. Adimando
Vice President - Finance and
Administration, and Treasurer
(Principal Financial Officer)



/s/ A. F. Henock
A. F. Henock
Vice President - Controller and
Chief Tax Counsel
(Principal Accounting Officer)