Charles McBride – VP, IR Murray Martin – Chairman, President and CEO Mike Monahan – EVP and CFO

Shannon Cross – Cross Research Vincent Lin – Goldman Sachs Chris Whitmore – Deutsche Bank Lloyd Zeitman – Bernstein

Thank you and good afternoon. Let me remind you, you can find today’s earnings press release in the attached schedules on our website at www.pb.com/investor relations.

The forward-looking statements contained in this presentation involve risks and uncertainties and are subject to change based on various supporting factors including changes in international or national, political or economic conditions, timely development and acceptance of new products, timing of potential acquisitions, mergers or restructurings, gaining product approval, successful entry into new markets, changes in interest rates, changes in currency and changes in postal regulations as more fully outlined in the company’s Form 10-K Annual Report filed with the Securities and Exchange Commission. Additionally, if there are any non-GAAP measures discussed during this call, such as adjusted earnings per share, earnings before interest and taxes or EBIT, free cash flow and organic revenue, there will be a reconciliation of those measures to GAAP measures located on our website.

Now, our Chairman, President and Chief Executive Officer, Murray Martin, will start with an overview of the quarter and the year. Murray?

Good afternoon. Thank you for joining us for today’s discussion of our fourth quarter and our 2008 full-year results.

I’ll share a few thoughts on our performance and Mike will follow with a financial overview of the quarterly and full-year results. I will conclude with our outlook for 2009 and then will open the line for questions.

I’m very pleased with our performance in 2008 given the challenges that we faced. On a full-year basis, we generated robust cash flow, increased revenue, and we grew adjusted earnings per share in line with current guidance.

All of this, against the backdrop of one of the most turbulent economic environments in recent history. This performance is even more notable when you factor in the impact of currency, particularly the strengthening of the US dollar.

Significant currency fluctuations reduced our earnings by $0.05 per share for the year, when compared with the guidance we provided at the beginning of 2008. On that basis, our adjusted earnings per share for the year would have been $2.83, which was within our original guidance for adjusted earnings of $2.80 to $2.90.

Our results highlight the resiliency of our business model, our disciplined focus on cash generation, and our early and ongoing actions to optimize our cost structure and enhance our operating efficiency. On this call, one year ago, I characterized it as the time of continued of progress in transformation.

We had recently announced a restructuring program based on changes we were seeing in the environment and in order to enhance our long-term positioning for growth. Little did we know at that time how valuable our actions would be in successfully navigating an increasingly volatile and unpredictable economic environment in 2008.

During the year, we improved our operating efficiency and reduced our cost structure in a variety of ways. We stopped placing older technology, which tended to be more costly to service.

We continue to consolidate our global supply chain to transition out of manufacturing and to enhance back office and shared service operations. We reduced approximately 8% of our global workforce, much of it at the middle and upper management levels.

As the global economy continued to weaken during the fourth quarter, we identified additional opportunities to reduce our cost structure and further improve our capital position. We intensified our focus on our capital position by reducing debt.

The benefits of our actions can be seen in our outstanding free cash flow of $888 million for the year. Our commitment to delivering shareholder value is reflected in the way we used our cash to deliver returns to shareholders.

During the year, we returned $292 million to shareholders through dividends and we repurchased 333 million in stock. We are pleased that for the 27 consecutive years, our Board of Directors approved an increase in the dividend, which for the first quarter 2009 will be a 3% increase to $0.36 per common share.

Our fourth quarter performance provides a good illustration of how our actions to deliver value helped us withstand the prevailing headwinds in the marketplace. During the quarter, our reported revenue declined 7%.

However, five percentage points were related to unfavorable currency. Currency affected revenue growth in most of our business segments, particularly in international mailing and in software.

The growing global economic uncertainty also led customers to act with increased caution and reduced spending. Our lower cost structure and expense controls on the other hand continued to prove beneficial in all of our businesses.

These actions resulted in improving gross margins across nearly all of our revenue streams, as well as improving EBIT margins in many of our business segments. This was particularly evident in US mailing, international mailing and production mail, which posted substantial year-over-year EBIT margin improvements for the quarter.

The margin benefits from our reduced cost structure were offset by integration expenses in international management services and in mail services, as well as lower revenues in software. Overall, we are pleased that our actions to streamline operations, to reduce costs and to generate cash have left us with greater liquidity, flexibility and instability.

Before I discuss our outlook for 2009, Mike will provide an overview of our financial results. Mike?

Thank you, Murray. Revenue was $1.6 billion for the quarter, a decline of just 2% from the prior year on a constant currency basis, and a 7% decline as reported.

Foreign currency, particularly, the strengthening of the US dollar against the Pounds Sterling, the Canadian dollar and the Euro, reduced revenue growth by almost 5%. For the quarter, revenue in the US declined by 3% while revenue outside the US was essentially flat versus the prior year on constant currency basis.

Revenue outside the US was down 16% on a reported basis, reflecting the dramatic currency swings in the quarter. Our revenue for the year was $6.3 billion which represents more than a 2% increase from the prior year, and within our current guidance range of 2% to 4%.

On a full-year basis, favorable currency movement in the first half of the year was substantially offset by the dollar strengthening, particularly in the fourth quarter. Therefore, full-year revenue grew about 2% year-over-year on both a constant currency and a reported basis.

For the year, non-US operations represented about 31% of total revenue. Adjusted earnings before interest and taxes or EBIT for the quarter which excludes charges related to restructuring and asset impairments was $297 million.

EBIT margin improved year-over-year to 19.1% and was substantially higher than the 18.1% margin in the third quarter, despite the decline in revenue. The improvement in the EBIT margin for the quarter was a direct result of the benefits we achieved from our restructuring initiatives started late in 2007.

We focused on reducing both our product and service costs, as well as our selling, general and administrative expenses. In fact, we achieved gross margin improvement in nearly all revenue streams compared to the prior year’s fourth quarter.

Our SG&A expense ratio improved this quarter by 20 basis points when compared with the prior year, and by 30 basis points excluding the impact of acquisitions and currency. When we add back depreciation and amortization, adjusted EBITDA for the quarter was $387 million or $1.87 per share.

Net interest expense in the quarter decreased by about $13 million compared with the prior year. We benefited in the quarter from a lower average interest rate which declined from 5.3% last year to 4.1% this year.

The effective tax rate for the quarter on adjusted earnings was 33.6% which was lower than last year and last quarter. This is primarily due to the recent extension of a tax credit for research activities.

We previously noted that the tax rate could vary during the course of the year. However, the tax rate for the full year on adjusted earnings was 34.3% which was right in line with our expectations.

Adjusted earnings per share for the quarter was $0.77 which is an 8% increase over our adjusted earnings per share of $0.72 for the same period last year. For the year, our adjusted earnings per share was $2.78 within our most recent guidance range of $2.75 to $2.82, and it was $0.06 above the $2.72 for the prior year.

This was a 2% increase. As we discussed in the past, dramatic strengthening of the US dollar, primarily against the Euro, the Pounds Sterling and the Canadian dollar, had a $0.05 per share negative impact on our results for the year when compared with our expectations at the beginning of the year when we provided an initial guidance.

Excluding this impact, our adjusted earnings per share for the year would have been $2.83 which again was within our original guidance range of $2.80 to $2.90. Given the continued constraints and concerns in the credit markets in general, we continue to enhance our financial flexibility and preserve our capital capacity.

We, therefore, did not repurchase shares during the quarter. Based upon share repurchases done earlier in the year, our shares outstanding this quarter were about 5% below what they were in last year’s fourth quarter.

GAAP earnings per share for the quarter included $0.40 per share of charges for our transition initiatives and asset impairments. Tax adjustments include a $0.04 per share benefit related to deferred tax assets associated with certain US leasing transactions and a $0.03 per share benefit related to tax adjustments in the UK and Canada.

Additionally, GAAP earnings per share includes a $0.09 per share charge for discontinued operations, which related to tax and interest on uncertain tax positions related to our former capital services business. Free cash flow was $235 million for the quarter and $888 million for the year.

Our strong free cash flow was the result of an ongoing focus on the balance sheet and cash management during the year, a settlement in the fourth quarter of an interest rate swap and continued growth in reserve account deposits. During the quarter, we returned $72 million to our shareholders through dividends.

For the year, we have returned $625 million to our shareholders in the form of dividends and share repurchases. We have $73 million of share repurchase authorization remaining as of the end of the year.

As a result of our strong free cash flow, we reduced our commercial paper balances by $220 million during the quarter to about $610 million. About 78% of our total debt is fixed rate and 22% is floating rate.

Again, let me emphasize the strength of our liquidity and continued access to the capital markets. We continue to maintain an A1/P1 rating as a commercial paper issuer and have taken the following actions to ensure we preserve our liquidity and financial flexibility.

We’ve narrowed our acquisition focus and, in addition to meeting our strategic objectives, acquisitions must meet our more stringent risk-adjusted rates of return. We retained flexibility regarding funding our pension plan with no current funding requirements at this time.

We’ve eliminated or deferred pay increases for the majority of our employees and we have chosen not to repurchase shares. Additionally, you should be aware that we have only $150 million in bonds maturing in 2009 and no debt maturing in either 2010 or 2011.

We have a $1.5 billion credit facility, which supports more than two times our current commercial paper balance. Our debt and our credit facility have no covenants or MAC clauses and our credit facility does not mature until 2011, and all of the original bank commitments remain intact.

And we are also eligible for the government’s commercial paper funding facility program through the Federal Reserve. While the company has substantial retained earnings, fourth quarter charges directly to stockholders’ equity related to foreign currency translation adjustments and a FAS 158 recognition of a decline in pension asset values decreased stockholders’ equity by approximately $575 million to a negative $188 million balance at the end of the year.

It’s important to note that this does not impact our debt, our ability to continue to pay dividends, or our credit ratings, and the company remains in a strong financial position. In fact, as Murray noted earlier, our Board authorized an increase in our quarterly dividend for the 27th consecutive year.

Let’s turn now to the transition initiatives announced in November 2007. As a result of the further weakening of the economy and the ongoing uncertainty around future economic conditions, we implemented additional restructuring actions during the quarter, focused on reducing our fixed cost structure.

This included reducing our off-site print capacity, and consolidating and globalizing a research and development infrastructure, and other support functions. As a result, we identified additional actions, bringing in the total pretax charges to $115 million for the quarter and $200 million for the year.

Of the $115 million in pretax charges in the quarter, approximately $89 million were cash charges related to severance and other exit costs, and the remaining $26 million were non-cash charges related primarily to asset write-offs associated with our outsourcing of manufacturing in Europe and a write-down of certain intangibles. Since the inception of the program, we have identified about 3,000 positions that have already been eliminated or will be eliminated in early 2009.

On an after-tax basis, the total charges in the quarter for restructuring and other charges amounted to about $82 million, which is equal to $0.40 per share. As we discussed earlier, the majority of the cost savings generated by our transition initiatives in 2008 was reinvested during the year to enhance customer value and gain operational efficiencies.

These savings also helped mitigate the impact of the current economic downturn on our business activity. So, that concludes my remarks.

Now, Murray will provide some insight about our plans going forward.

Near the end of this call a year ago, I stated my belief that we were taking the right actions to successfully manage the lingering conditions that we had identified at the end of 2007. We were right about the timing and appropriateness of our actions.

Unfortunately, we were also right about the lingering nature of the conditions which were unfolding. With a lower cost structure, increased liquidity and reduced debt, we are better positioned to successfully navigate an uncertain environment today than we were one year ago.

Yet, prolonged economic weakness, unanticipated currency fluctuations and the significant increase in pension costs related to recent changes in financial markets and interest rates will continue to offset the benefits from our actions and impact the 2009 reported results. That is why we are providing a wider range of guidance than we have historically.

On a constant currency basis, we expect 2009 revenues in the range of 1% growth to a decline of 2%. On a reported basis, we expect revenue in the range of a decline of 4% to 7%.

This range includes an estimated negative 5% impact from currency when compared with 2008. We expect adjusted earnings per diluted share from continuing operations for the year will be in the range of $2.55 to $2.75.

Adjusted earnings per share would grow in the middle single-digit range compared with 2008 if we excluded an estimated negative impact of $0.30 to $0.35 per diluted share for currency and incremental pension expense. On a GAAP basis, we expect earnings per diluted share from continuing operations for the year to be in the range of $2.49 to $2.69.

GAAP EPS from continuing operations will include approximately $0.06 per share, related to a non-cash tax charge associated with out-of-the-money stock options that expire principally in the first quarter of 2009. We expect to generate free cash flow in a range of $700 million to $800 million for the year.

The guidance presumes no significant changes in foreign currency exchange rates or interest rates from their current levels. We might not know what lies ahead in 2009, but last year highlighted our ability to manage through it.

We help businesses reduce costs and increase the returns on their investments in data, documents and mail, which helps them connect with their customers. We believe that our value proposition becomes even more compelling in times like these.

Our confidence in our ability to deliver shareholder and customer value in 2009 and beyond is enhanced by the ongoing benefits of all of our actions, and our expectations at our business model will continue to generate substantial free cash flow. We are committed to delivering returns to our shareholders.

We are committed to diligence in spending and investing cash to maximize shareholder return. We are committed to enhancing our customer experience.

We are committed to ongoing improvements in operating efficiency and productivity, and we are committed to increasing the value we deliver by applying innovation to our operations, our processes, and our solutions. Thank you.

And now, let’s open the line for questions.

Thank you. Good afternoon.

My question – I’ve got a few, but the first one I’d start with is just can you talk a little bit about what you’re seeing in terms equipment sales? I mean, they were relatively solid versus others on a constant currency basis.

Obviously, some pressure, but what are people buying? Are you seeing a mix shift down in terms of the ticket items?

Can you talk about your sale cycles, just maybe on a geographic basis, and anything you can give us to give us some idea of where the sales are happening on the equipment side?

Thanks, Shannon. I think this is something we’ve talked about for the last couple of quarters particularly in the US, where we talked about the change in availability of trade-up leases in our cycle and the cycle that we went through over the last two years.

We did see in the fourth quarter equipment sales grow by 6% in the US and that was really primarily focused around that change in the lease space, which we had predicted a year ago would begin in the third quarter and then accelerate in the fourth quarter, and then continue through 2009. So, overall, we’re seeing our equipment sales in the metering mail business to be strong.

In Europe, we saw very strong sales in our production mail equipment sales with a more of a negative impact in the US in that regard, as there was a slowdown in the financial services on large ticket items. So, I think that is generally the mix overall.

We saw pretty good results on equipment sales.

Okay. And then, can you talk a little bit about supplies?

It was a bit weaker. What I’m curious about is how much of this do you think is end use?

We’ve seen from channel contraction out there in terms of supplies. Just any color you can give us in terms of what you think is happening in that revenue line item.

Sure. When we look at supplies, I think there are really two things that we see.

Number one, people are delaying the procurement of their supplies as long as possible. They are storing less supplies, so their order size is smaller to begin with, so we have a little more frequency on smaller size; and then, there is a slight decline in the actual consumption of supplies.

But we think that the biggest effect is people buying less and having less on their shelf, which should create some leveling as we go forward.

Okay. And then, I don’t know, Mike, if you want to take this.

I’m just curious when we look at your capital structure, you paid back $220 million -- you didn’t renew the commercial paper this quarter. Is there a level of commercial paper you’re comfortable with?

Is there – obviously, you’ve got a very strong balance sheet, so I’m just curious as to how you think about it with the $700 million to $800 million in cash coming in 2009 and how you would be comfortable maybe exiting the year.

Sure. Of the free cash flow that we will have next year, obviously, if we look at the dividend payments over the course of a year, that’s about $300 million.

We will have need for use of cash around our restructuring activities that will be about another $100 million. And then, the other items that obviously is the working capital of the business, if we see growth in our equipment sales that obviously creates the opportunity for increases in finance receivables, which is a very good use of our cash in terms of long-term return on the business.

But clearly, we will have excess free cash flow and we’ll look at, obviously, our options around that to either reduce our debt outstanding or look at other options for deploying the cash. But on a net basis, we think there’s an opportunity obviously, if we don’t do something with that cash, to further reduce our commercial paper.

But today, we’re around $600 million in commercial paper outstanding and plus or minus a few hundred of that we think is a reasonable range.

Okay. And then, one final question.

Can you talk a little bit about the split between the pension cost and the currency hit on the $0.30, $0.35, whatever it was you provided that would be in apples-to-apples? Can you give us some idea?

Sure. The pension is obviously one that’s easier to identify because of the assumption set around it.

So, pension represents about $0.07 of that number based on our calculations as of the end of the year. The rest of the range is really related to currency based on, obviously, the results over the course of the year.

Okay, thank you.

Hi. This is actually Vincent speaking on behalf of Julio.

Just wanted to make sure on year 2009 EPS guidance, is there any buyback assumed in the EPS guidance?

We have not assumed any buyback inside of that guidance.

Got it. Great.

And then, just on the – and how about debt repayment? So, there’s no debt repayment implied in that guidance either?

Not in a significant way.

Okay. Thanks.

Hi. Thanks very much.

Wanted to follow-up on the currency question. To what extent does Pitney hedge?

I’m trying to understand how the currency impact can be so large in this year versus last year. I don’t recall when the dollar was working for you, such a large impact being discussed on the EPS line.

Yes. There is really a couple of issues here.

There are obviously two components to currency; one is the translation effect and the other is transaction effect. And in terms of your question, our hedging strategy, we generally try to hedge about 50% of our transactions.

The issue we have is a bit of the absolutes in terms of the currencies and the relationships to the currencies. Obviously, in terms of foreign currencies, the mix of countries we do business in, the Euro, the Pound, and the Canadian dollar are the largest; and so, obviously, the big change in the Pound Sterling to the dollar is a significant, as well as the movement in the Canadian dollar.

The other side of it on the transaction side, a significant portion of what we sell in our international operations, particularly around our DNP businesses sourced in the US in US dollars, so there are some meaningful exposure there. And the other significant purchases for us are in Yen and, obviously, the Yen-dollar relationship is one that’s significantly different today than it was a year ago.

So, it’s the combination of those factors that really drive it.

How would you split it between the transaction and the translation impact?

It’d be difficult for me to give you a clean break on that because it’s obviously based on a mix of purchases over the course of the year.

Presumably, that transaction impact will come through in gross margins? Is that correct?

(inaudible).

What is cooked into your guidance with respect to gross margins for 2009 on a year-over-year basis? Can you talk to the sustainability of the gross margin strength you saw in Q4 given the pressure on organic growth?

Obviously, we’ve seen gross margin improvement on an operating basis without currency. The currency, obviously, would have a depressing impact on the gross margins.

That’s particularly true in our production mail, international production mail business, and then in our international mailing business where we’re purchasing in Yen.

In terms of expectations for gross margins?

We haven’t really given the full breakdown of the P&L at this point, so I think our guidance is going to stay at the revenue and EPS level at this point.

Okay, thank you.

All right, folks. First of all, could you tell us what percentage of your revenues are recurring, let’s say, into the full-year ’08 and fourth quarter?

Sure. In terms of full year, about 72% of our revenues are recurring in nature and it’s similar for the fourth quarter.

I don’t have the exact numbers at the top of my head, but I think it’s very much in the same range.

Okay. And I guess having so much of your revenue base coming in on a recurring basis makes it a little easier to forecast.

Lot of companies have been shy about doing that in their fourth quarter reports. I was just wondering what your underlying expectations are for the global economy, for the US economy, that get you to the forecast that you’ve given us for ’09?

Yes. I would say that we have assumed a continuation of the environment that we see today and, obviously, I think the fourth quarter reflects very much the mix of those impacts.

Obviously, the currency impacts that we described, the large ticket tends to be impacted a bit more. Even within the recurring revenue streams, there are some elements of that that are more volume-oriented.

We talked a little bit about supplies as one and some of our services businesses that have some volume elements might be impacted as well to some degree, but that high-recurring revenue ratio is what gives us the confidence in our guidance.

Okay. And I was just wondering, over the course of the fourth quarter, overall, it seems the business environment really took a tumble as we went through.

What did you folks see -- what did you see over the course of the quarter in terms of the reception you got from your customers when you presented your value proposition to them?

I think there are a couple of things. If you go to the very beginning of the quarter when there was significant dislocation, there was a lot of delay and uncertainty.

However, as we’ve discussed with the high-recurring nature of the business and the leases that come due as they come due, they either are renewed which is good for us from a cash flow and an EBIT perspective but less positive on top line revenue, or they renew them. As we talked about the 6% growth in equipment sales in the quarter, we actually saw that recover as we continued through the quarter and people, although maybe having more people involved in decisions, a higher level of decision-making came back into a more traditional flow.

We did, however, see a continuing uptake in the extensions of leases rather than pure renewals with new equipments. So there was a combination of the two across the portfolio.

And any issues as far as pricing?

No. I think, as you can see from our margins, our pricing has held very stable throughout this time.

Okay, very good. Thanks very much.

Thanks. I was just curious, Murray, do you have any thoughts on the current issues facing the post office and how it might either benefit or impact Pitney, maybe perhaps more outsourcing from the post office?

And then, just my second question is are there any rate changes, anything year-over-year we should think about other than, obviously, what’s benefiting you on the equipment side just as you look at 2009 and 2010 to make sure we’re prepared for any changes in leases or anything like that? Thanks.

Starting with the rate change, there is a change in rates in the US and around a number of countries in the world. They generally happen in the first quarter and are becoming more regular.

Historically, they were spread every two or three years, but most posts around the world now have come to realize that more frequent, smaller increases are more tolerable for business. They’re more predictable and people can budget accordingly.

So, we’re seeing that and we see that as a positive and that is why, if you recall, in 2007, we said we were changing our technology and moving to connected and downloadable devices because it makes it easier, quicker, and simpler for our customers and for us to support that. So, we see that as a very positive direction.

On your first question around the results of the postal service, I’d make a couple of comments. One, we are not immune to volume, but most of our equipment is really for access rather than on pure volume.

So, the supply side has a volume effect, but the access, which is the device itself, is really not as directly affected by volume. When we look at our mail services business, we have continued to see more and more outsourcing there.

And therefore, continued organic growth in both first class and standard mail even during this time when you could say the theoretical volume in total has become less because more people are interested in it, they’re seeing the value and with the changes that are coming with the barcode, the IMB that will come in place in 2009, we can provide those facilities without them having to make the investment. So we’re seeing certainly at something you see, you feel, but it has not had a direct one-on-one impact with us.

So I’m still fairly optimistic that at some point later in the year, we’ll see some recovery on those volumes in the postal service and that that will be a particular value in the high-volume mail segment which has been a little slower.

Okay, great. Thank you.

Hi, this is Vincent again, two follow-up questions. The first being implied in your 2009 guidance, what is your current expectation in terms of contribution from the software segment?

And then, secondly, if you can update us in terms of revenue concentration from the financial services vertical and whether you’re seeing any stabilization in terms of activities from the financial services vertical?

In the financial services vertical, it’s about 23% in total. However, mailing itself, it is actually less.

It’s around 15%. So that doesn’t really affect the traditional mailing business.

It does affect the higher end production mail and the software business. We have seen some recoveries starting to occur in some accounts, but still there is delay there.

I guess the way I look at it from a positive point of view is large equipment ages and will need to be replaced. And so, from our side, it is really a matter of timing.

And if people are stretching the lives of the equipment, we will see that it’s just a matter of when we will see it. As to the other question –

Yes, in terms of software, I think Murray touched on one element of it, is that we have large licensing agreements within the software business and similar to the production mail environment. Those will be, in many cases, a good number of our customers are in financial services and the retail sectors.

So, we would expect some challenges around those sectors, around software. But on the other side, there is a good bit of compliance software requirements in there and we expect that customers need to stay compliant with those products.

So, that and obviously it’s a much more global mix of business in our software business, so there will be some currency impacts but we do expect to see some improving performance in some of the markets outside the US.

Okay, thanks.

Okay. I want to thank you very much for your questions this afternoon.

We are pleased with our 2008 performance. Certainly, very pleased given the turbulent economic environment and the impact of the significant currency swings that we saw, particularly in the fourth quarter.

We have generated robust cash flow, increased revenue, and we grew our adjusted earnings per share in line with our 2008 guidance. Our results highlight the resiliency of our business model, our disciplined focus on cash generation, and our early and ongoing actions to optimize our cost structure and to enhance our operating efficiency.

Thanks for joining us and have a great day.