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Pitney Bowes Completes Settlement With IRS

Friday, September 01, 2006

Press release from the issuing company

STAMFORD, Conn., Aug. 31 -- Pitney Bowes Inc. today completed its previously disclosed tax settlement with the Internal Revenue Service. "We are quite pleased to reach this resolution as it closes a chapter on a non-core business that we have sold," said Michael J. Critelli, Chairman and CEO of Pitney Bowes. "This permits us to concentrate our energies on our growth strategies and makes it easier for investors to understand our financial position and growth potential." As a result of the IRS settlement and the previously completed sale of the Capital Services business, Pitney Bowes expects to pay about $1.1 billion of tax over the next six months. This tax liability was previously accrued in the company's financial statements. All of the tax payments will be made using proceeds from the Capital Services sale, as well as an advance against the company's Corporate Owned Life Insurance (COLI) assets. The largest portion of the tax, nearly $900 million, resulted from the Capital Services sale, which represents amounts owed on transactions the company entered into over the past 15 years. This tax would have been due over the next 20 years, but the sale accelerated the time at which it must be paid. The remaining payments reflect taxes owed with respect to various other transactions, including the company's COLI investments.




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