Jim (cont'd):


Jim:     Mr. Martin welcome to Mad Money.

Murray:      Good to see you, Jim.

Jim:     Sir, can you talk about your companies philosophy to shareholders, and how you reward them thru thick and thin?

Murray:      Well, we believe that the company is here for our shareholders. It is there for our customers and our shareholders, and we look forward to generating returns for them. And that is why for 27 consecutive years, we have increased our dividend to insure the return. At the same time, depending on how our cash flows are we also do stock buy backs to enhance the shareholder value.

Jim:     Now, some of the analysts believe that the growth is not what it used to be, and perhaps it will not return to the old growth, that is slowing… on what is known as a cyclical basis. That it is just a long term decline, is that true?

Murray:      We don’t think so, Jim. We continue to see our EPS growth over the long term in the 10% to 12% range, which is what we have been focused on over time. We did have a little slow down due to the cyclicality of our lease phase, that is the equipment that we lease to our customers. And that has now bottomed out, and is now moving positive, and we saw that in the fourth quarter.

Jim:     What kind of organic growth could we get here if the economy just stabilizes?

Murray:      We have said that our organic growth would be in the 2% to 4% growth range. And that is sort of what we would expect, and at the same time we have diversified our portfolio. And as we continue to diversify and add higher growth areas, such as software, marketing services, and mail services, we would expect that to move up in that range over time.

Jim:     It seems like people just remember you as a meter company, why is it that we don’t think of Pitney Bowes as more of a technology company?

Murray:      Well, Pitney Bowes is always been one of the leaders in technology, we are a very large patent holder. In fact, even during this time we have continued to increase our spend in R&D, and we are up almost 11% in R&D spend. And, so customers don’t really realize the technology that is in the metering or postal evidencing devices, but we are expanding that across software. We are a very significant software company, and also in the mail services area.

Jim:     Can you talk to me about your exposure to financial services? I don’t mean to point out all of these negatives… I mean to me people should be buying your stock… but I get all these different comments… the organic growth is slowing… the financial service exposure is not good… so why don’t you tell us what you are seeing?

Murray:      Sure, over all in the financial service sector, there is about 1 quarter of our revenue, however, that is really in the larger ticket items. And we took that hit in 2008, so we think that that has pretty much leveled out at this market rate. The core of our business is much lower than that in a percentage, so we don’t see a long term continuing affect from the basis that we are now at. In fact, I look at it and say that a lot of this is large ticket items, it is large software, and all of that will have to renew at a point in time. So, I see this as a deferral rather than a loss, because we have not lost any of these revenues.

Jim:     Excellent... Murray Morton, chairman and CEO of Pitney Bowes. Thank you so much for coming on this show sir.

Murray:      Thank you.

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