1. Portfolio Analysis at Pitney BowesBen YeminiDirector, Corporate StrategySeptember 29th, 2012This document is for academic discussion purposes only. It is an incomplete record of the conversation. Data containedherein has been disguised. This material does not contain any Pitney Bowes official statements of fact or intent.

2. Pitney Bowes History1902:Arthur Pitney patents his postage-stamping machine1920:Pitneys American Postage Meter Co. and Walter Bowess Universal Stamping Machine Co. merge to form Pitney Bowes1957:Faces government anti-trust suit, forced to license technology to others1979:Acquires Dictaphone Corp.1982:Enters fax machine market1995:Sells Dictaphone and Monarch subsidiaries2001:Spins off fax and copier division as Imagistics International2001-08: Completes 92 acquisitions including mainly in Software and Services2008-10: USPS First Class Mail decline rate increases from -2%/yr. (2001-08) to -7%yr. (2009-10)PB Revenue declines by $800MEBIT margin declines from 24% to 16%2009 -11: Strategic Transformation initiative Portrait Software acquired in 20102 3. Company VisionWe help SMB and Enterprise businesses optimize their communications, transactions & interactions with their customers, prospects and partners to enable business growth. CustomersProspectsPartners Communications Solutions for preparing, delivering and responding tobusiness communications ProcessOptimizing internal business processes related to Optimization connections Transactions Solutions for executing and processing transactions Customer Insight Customer and prospect profiling and response analysisEvery Connection is a New Opportunity TM3 4. Objectives of Portfolio Management Actively manage our portfolio to leverage our resources mosteffectively and maximize value creation for our shareholders Key Considerations: How is our current portfolio positioned today? Given the market outlook, how do we expect our businesses to perform in the future? How should resources (e.g. R&D, Sales & Marketing) be allocated?44 5. Portfolio Management FrameworkENHANCE PROFITABILITY INVEST TO GROW1 Maximize cash flow Prioritize over businesses in other Invest in technology to improve quadrants for investmentsproductivity Exit sub-segments with poor prospects2Profitability3 REDUCE COST & SCRUTINIZE GROW & IMPROVE PROFITABILITY Prioritize achieving acceptable Allow growth investments only whenprofitability scale drives profitability4 Divest/Exit, if underperformance persists Move businesses up into Invest toGrow or left to Reduce Costquadrants based on performance toplan.5 123 45 Strategic alignment and market attractiveness55 6. Approach to Portfolio Analysis Define the portfolio bubbles Identify Business Unit segments for our core business Identify growth segments Assess each core and growth bubble based on consistent relative criteria Profitability Strategic Fit Market Attractiveness Determine likely trajectory of bubble Provide assessment to GMs as input to their 3 year strategic plan and 1year budget submission 66 7. Portfolio Assessment Core CriteriaProfitability Criteria EBIT Margin RelativePerformance EBITMargin vs. Peers % Strategic Alignment Criteria Market Attractiveness Criteria Leverage Core Assets Industry Growth Trans. & Innovation Industry Profitability Growth Beyond Core Addressable Market LOB Growth Relative Market Share Sustain Profitability Position vs. Market Forces 77 8. Portfolio Assessment Growth CriteriaProfitability Criteria NPV (5 YR) EBIT Margin (YR 3) Cannibalization Strategic Alignment Criteria Market Attractiveness Criteria Alignment with CCM Industry Growth Alignment with BU Strategy Industry Profitability Leverage of core assets Addressable Market Executability Market Establishment Risk Ability to be a disruptor Susceptibility to Secular Change 88 9. What Ive Learned Connecting strategy and budget requires persistence Not ending up in the top right is okay Invest in fewer, bigger strategic bubbles Customer needs should govern bubble definition Overinvest in risk assessment for growth bubbles99