SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549-1004

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FORM 10-K

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|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 2000

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

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Commission file number 0-13497

PITNEY BOWES CREDIT CORPORATION

Incorporated pursuant to the Laws of the State of Delaware

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Internal Revenue Service -- Employer Identification No. 06-0946476

27 Waterview Drive, Shelton, CT 06484-4361

(203) 922-4000

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Securities registered pursuant to Section 12 (b) of the Act: None

Securities registered pursuant to Section 12 (g) of the Act: None

Indicate by check mark whether 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 (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|

Indicate by check mark if disclosure by delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |X|

The aggregate market value of voting stock held by non-affiliates of th
Registrant at March 23, 2001: None

As of March 23, 2001, 460 shares of common stock, no par value, with a stated
value of $100,000 per share, were outstanding, all of which were owned by Pitney
Bowes Inc., the parent of the Registrant.

REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I(1)(a) AND (b)
OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE
FORMAT

PITNEY BOWES CREDIT CORPORATION

Part I

Item 1.-- Business................................................................ 3
Item 2.-- Properties.............................................................. 7
Item 3.-- Legal proceedings....................................................... 7
Item 4.-- Submission of matters to a vote of security holders..................... 7

Part II

Item 5.-- Market for the registrant's common equity and related
stockholder matters................................................. 7
Item 6.-- Selected financial data................................................. 8
Item 7.-- Management's discussion and analysis of financial
condition and results of operations................................. 9
Item 7A. -- Quantitative and qualitative disclosures about market risk............ 13
Item 8.-- Financial statements and supplementary data............................. 14
Item 9.-- Changes in and disagreements with accountants on
accounting and financial disclosure................................. 38

Part III

Item 10.-- Directors and executive officers of the registrant..................... 38
Item 11.-- Executive compensation................................................. 38
Item 12.-- Security ownership of certain beneficial owners and
management.......................................................... 38
Item 13.-- Certain relationships and related transactions......................... 38

Part IV

Item 14.-- Exhibits, financial statement schedules and reports on Form 8-K........ 39
Index to exhibits................................................................. 39
Signatures........................................................................ 42

PITNEY BOWES CREDIT CORPORATION

PART I

ITEM 1. -- BUSINESS

GENERAL

Pitney Bowes Credit Corporation (the "Company" or "PBCC") operates primarily in
the United States and is a wholly-owned subsidiary of Pitney Bowes Inc. ("PBI"
or "Pitney Bowes"). As such, the Company is part of PBI's Global Mailing,
Enterprise Solutions and Capital Services segments. The Company is principally
engaged in the business of providing lease financing for PBI products as well as
other financial services to the capital services markets.

The Internal Financing Division ("IFD") of PBCC provides marketing support to
PBI. Equipment financed for the IFD lease financing programs includes mailing,
paper handling and shipping equipment and scales. Transaction sizes generally
range from $500 to $500,000, although historically most transactions have
occurred in the $1,000 to $10,000 range, with lease terms generally from 36 to
60 months. As part of its focus on small business solutions, the Company offers
various products targeted toward the small business owner. IFD also offers
customers convenient alternatives for the purchase of postage. Purchase Power(R)
offers customers a revolving credit facility for postage purchases, while the
Reserve Account allows customers to prepay for postage and earn interest on
their deposits in the form of free postage. PBCC earns income on transaction
fees as well as interest on balances from customers choosing to use the credit
facility.

As part of a strategic alliance with U.S. Bank, a division of U.S. Bancorp, on
June 30, 2000 PBCC sold its PitneyWorksSM Business Rewards Visa(R) and Business
Visa(R) card operations, including credit card receivables of approximately $322
million. The Company expects to earn fees in connection with the strategic
alliance with U.S. Bank. However, the Company is no longer originating credit
card receivables and as a result will not be earning finance income on those
balances.

PBCC's Capital Services Division ("CSD") operates in the commercial and
industrial market by offering financial services to its customers for products
not manufactured or sold by PBI or its subsidiaries. Products financed through
Capital Services Division financing programs include commercial and
non-commercial aircraft, transportation equipment, railcars and locomotives, and
high-technology equipment such as data processing and communications equipment.
Transaction sizes (other than aircraft leases) generally range from $150,000 to
several million dollars, with original lease terms generally from 7 to 21 years.
Aircraft transaction sizes range up to $21 million for non-commercial aircraft
and up to $52 million for commercial aircraft. Original lease terms are
generally up to ten years for non-commercial aircraft and from 20 to 24 years
for commercial aircraft. The Company has also participated in leveraged lease
transactions including ten commercial aircraft leveraged lease transactions with
a net investment of $302.4 million at December 31, 2000. The Company's Capital
Services Division also participates in fee-based programs and in certain other
types of financial transactions including sales of lease transactions, certain
project financings and portfolio servicing.

PBCC's Capital Services Division is also responsible for managing Pitney Bowes
Real Estate Financing Corporation ("PREFCO"), a wholly-owned subsidiary of PBCC
providing lease financing for commercial real estate properties. Both PBCC and
Pitney Bowes have provided capital for PREFCO's investments.

On December 11, 2000, Pitney Bowes announced that its Board of Directors
approved a formal plan to spin-off its Office Systems business to stockholders
as an independent, publicly-traded company. The transaction is expected to be
completed by the end of the third quarter of 2001. Office Systems includes the
copier and facsimile businesses. For the year ended December 31, 2000 operating
results of Office Systems have been segregated and treated as discontinued
operations by Pitney Bowes. Accordingly, copier and facsimile financing is being
reported by PBCC as a component of Capital Services. Prior years' information
has been reclassified to conform to current year presentation. Equipment
financed by former PBI subsidiaries Dictaphone and Monarch is also reported as a
component of Capital Services.

On January 14, 2000, the Company sold its mortgage servicing business, Atlantic
Mortgage & Investment Corporation ("AMIC"), a wholly-owned subsidiary of the
Company, to ABN AMRO North America. The Company received approximately $484
million in cash at closing. Accordingly, operating results of AMIC have been
segregated and reported as discontinued operations in the Consolidated
Statements of Income. Prior year results have been reclassified to reflect this
presentation. In connection with the sale, the Company recorded a loss of
approximately $27.6 million (net of taxes of $18.4 million) for the year ended
December 31, 1999. The transaction is subject to post-closing adjustments. See
Note 2 to the CONSOLIDATED FINANCIAL STATEMENTS.

On October 30, 1998, Colonial Pacific Leasing Corporation ("CPLC"), a
wholly-owned subsidiary of the Company transferred the operations, employees and
substantially all assets related to its broker-oriented external financing
business to General Electric Capital Corporation ("GECC"), a subsidiary of the
General Electric Company. The Company received approximately $790 million at
closing. In connection with this transaction, the Company recorded a gain of
approximately $3.7 million (net of taxes of $2.0 million) for the year ended
December 31, 1999. This gain resulted from the settlement of post-closing
adjustments in 1999 related to the sale, offset by the cost of settlement with
regard to a dispute with GECC over certain assets that were included in the
sale. See Note 2 to the CONSOLIDATED FINANCIAL
STATEMENTS

Substantially all lease financing is done through direct finance leases whereby
PBCC recovers its costs plus a return on investment over the initial,
non-cancelable term of the contract. The Company has also entered into leveraged
and operating lease structures.

The Company's gross finance assets (see Note 3 to CONSOLIDATED FINANCIAL
STATEMENTS) outstanding for the Internal Financing and Capital Services programs
at December 31, 1996 through 2000 are presented in ITEM 6 - SELECTED FINANCIAL
DATA. Total Company gross finance assets at December 31, 2000 were $3.5 billion,
of which approximately 62 percent was related to mailing, paper handling and
shipping products, 9 percent to postage payment programs receivables, 8 percent
to copier and office equipment, 6 percent to commercial aircraft, 3 percent to
mining and manufacturing products, 2 percent to railcars and 2 percent to
transportation equipment. Total investment in finance assets amounted to $2.8
billion in 2000 and $3.0 billion in 1999. Capital Services programs accounted
for 13 percent of gross finance contracts acquired in 2000 compared to 14
percent in 1999.

At December 31, 2000, PBCC's largest customer accounted for $77.0 million, or
2.4 percent of gross finance receivables, and the Company's ten largest
customers accounted for $479.1 million in gross finance receivables, or 15.1
percent of the receivable portfolio.

CREDIT POLICIES

PBCC's management and Board of Directors establish credit approval limits at
regional, divisional, subsidiary and corporate levels based on the credit
quality of the customer and the type of equipment financed. The Company and PBI
have established an Automatic Approval Program ("AAP") for certain products
within the Internal Financing Division. The AAP dictates the criteria under
which PBCC will accept a customer without performing the Company's usual credit
investigation. The AAP considers criteria such as maximum equipment cost, a
customer's time in business and current payment experience with PBCC.

PBCC bases credit decisions primarily on a customer's financial strength.
However, with the Company's Capital Services programs, collateral values may
also be considered.

CREDIT EXPERIENCE

The percentage of receivables over 30 days delinquent was 4.6 percent at
December 31, 2000 and 4.7 percent at December 31, 1999 and 1998.

PBCC has charged against the allowance for credit losses $62.3 million, $85.8
million and $66.8 million in 2000, 1999 and 1998, respectively. The decrease in
2000 is attributable to write-offs in 1999 related to accounts retained in the
sale of CPLC in 1998. For further information see Note 6 to the CONSOLIDATED
FINANCIAL STATEMENTS.

RELATIONSHIP WITH PITNEY BOWES INC.

PBCC is PBI's domestic finance subsidiary and provides the largest financing
support for PBI's Global Mailing, Enterprise Solutions and Capital Services
segments. Equipment sales to PBCC as a percentage of PBI's consolidated revenue
from continuing operations was 14 percent in 2000 and 15 percent in 1999.

Business relationships between PBCC and PBI are defined by several agreements
including an Operating Agreement, Finance Agreement and Tax Sharing Agreement.

Operating Agreement An operating agreement with PBI was initiated on March 3,
1977 and was subsequently amended. This agreement was terminated in its entirety
and superseded with a successor agreement on November 6, 1996 as the First
Amended and Restated Operating Agreement ("Operating Agreement"). The Operating
Agreement can be modified or canceled on a prospective basis by either party
upon 90 days prior written notice.

PBI and PBCC have entered into detailed written operating procedures ("Operating
Procedures") which govern among other things: the terms and prices of equipment
purchases by PBCC for lease to third parties; computation and payment of fees
for referrals and services provided by PBI sales personnel; the AAP for PBI
equipment; buyback allowances; and the handling of contract terminations,
cancellations, trade-ups and trade-ins.

In connection with sales of finance assets in the IFD lease programs, PBI agreed
not to cancel or modify, in any material respect, its obligations under the
Operating Agreement concerning the sold receivables, without the prior written
consent of PBCC and the transferee.

Pursuant to the Operating Procedures, the purchase of equipment by the Company
is contingent upon a lessee entering into a direct finance lease with the
Company. Service and maintenance of the equipment leased is the responsibility
of the lessee and is generally arranged through a separate equipment maintenance
agreement between the lessee and PBI.

In connection with the buyback provision of the Operating Procedures, PBCC has
the option to request a buyback from PBI for non-copier equipment subject to a
lease which is terminated or canceled, provided the equipment is available for
repossession. Following such buyback, PBI is responsible for the repossession
and disposition of equipment. The buyback provision sets forth a stipulated
amount that is payable by PBI to PBCC for certain terminated leases; such amount
is calculated on the basis of a declining percentage, based upon the passage of
time, of the original total invoice value to PBCC. The difference between the
buyback amount received from PBI and the remaining value of the lease usually
results in a loss that is charged against PBCC's allowance for credit losses.

Pitney Bowes Office Systems does not remanufacture used copier equipment;
therefore copier equipment is excluded from the buyback arrangement described
above. However, under the Returned Copier Equipment Agreement (the "Agreement"),
Pitney Bowes Office Systems issues an annual blanket purchase order for the
repurchase of certain copier models. These returns are made under conditions and
at rates specifically set forth in the Agreement. All copier equipment lease
transactions are subject to the Company's standard credit review procedures.

Finance Agreement Pursuant to the Amended and Restated Finance Agreement (the
"Finance Agreement") dated June 12, 1995, between PBI and PBCC, PBI has agreed
to retain, directly or indirectly, ownership of the majority of the outstanding
shares of capital stock of the Company having voting power in the election of
directors, to make payments, if necessary, to enable the Company to maintain a
ratio of income available for fixed charges as defined to such fixed charges of
1.25 to 1 as of the end of each fiscal quarter, and to provide or cause to be
provided funds sufficient to make timely payment of any principal, interest or
premium in respect of any of the Company's indebtedness for borrowed money that
has the benefit of the Finance Agreement if the Company is unable to make such
payment.

Under the Indenture dated as of July 31, 1999 (the "1999 Indenture"), between
PBCC and SunTrust Bank, Atlanta, (the "1999 Trustee"), PBCC agreed it would not
waive compliance with or terminate or amend in any material respect, the Finance
Agreement without the consent of the holders of a majority in principal amount
of the outstanding securities of each series of debt securities issued under the
1999 Indenture; provided, however, that if such waiver, termination or amendment
would not have a material adverse effect on any such holders or if each rating
agency that rated such securities confirmed in writing that the rating for such
securities then in effect would not be down-graded as a result of such waiver,
termination of amendment, such waiver, termination or amendment could be
effected with the consent of the 1999 Trustee alone.

Under the terms of the Finance Agreement and the Indenture dated as of November
1, 1995 (the "1995 Indenture"), between the Company and Chase Manhattan Bank
(successor to Chemical Bank), as Trustee (the "1995 Trustee"), the Finance
Agreement may not be amended, in any material respect, or terminated while the
Company has any series of debt securities issued under the 1995 Indenture or any
series of other debt outstanding that is, by its express terms, entitled to the
provisions of the Finance Agreement unless at least two nationally recognized
statistical rating agencies that have been rating such series of debt, confirm
that their ratings for such series of debt will not be downgraded as a result or
the holders of at least a majority of the outstanding principal amount of such
series of debt have consented in writing.

Under the Indenture dated as of May 1, 1985 (together with all Supplemental
Indentures as noted in Part IV Item 14(a) 3, the "Indenture"), between PBCC and
Sun Trust Bank (successor to Bankers Trust Company, effective December 16,
1996), as Trustee (the "Trustee"), PBCC agreed it would not waive compliance
with, or amend in any material respect, the Finance Agreement without the
consent of the holders of a majority in principal amount of the outstanding
securities of each series of debt securities issued under the Indenture. In
addition, PBI has entered into a Letter Agreement with the Trustee pursuant to
which it agreed, among other things, that it would not default under the Finance
Agreement nor terminate the Finance Agreement without the consent of the holders
of a majority in principal amount of the outstanding securities issued under the
Indenture.

Tax Sharing Agreement The Company's taxable results are included in the
consolidated Federal and certain state income tax returns of Pitney Bowes. Under
the Tax Sharing Agreement, dated April 1, 1977, between the Company and Pitney
Bowes (the "Tax Sharing Agreement"), the Company makes payment to Pitney Bowes
for its share of consolidated income taxes, or receives cash equal to the
benefit of tax losses utilized in consolidated returns in exchange for which it
issues non-interest bearing subordinated notes with a maturity one day after all
senior debt is repaid. The Tax Sharing Agreement can be canceled by either PBI
or PBCC upon twelve months written notice.

PITNEY BOWES INC.

PBI, a Delaware corporation organized in 1920, is listed on the New York Stock
Exchange. Headquartered in Stamford, Connecticut, PBI employs approximately
28,500 worldwide. PBI operates within three industry segments: Global Mailing,
Enterprise Solutions and Capital Services.

Global Mailing includes worldwide revenues from the rental of postage meters and
the sale, rental and financing of mailing equipment, including software-based
mail creation and mail finishing equipment, software-based shipping,
transportation and logistics systems, and related supplies and services. In
accordance with postal regulations, postage meters may not be sold in the United
States; they are rented to users and therefore are not subject to lease by PBCC.

Enterprise Solutions includes Pitney Bowes Management Services and Document
Messaging Technologies. Pitney Bowes Management Services includes revenues from
facilities management contracts for advanced mailing, reprographic, document
management and other high value services to enterprises. Document Messaging
Technologies includes revenues from the sale, service and financing of high
speed, software-enabled production mail systems, sortation equipment, incoming
mail systems, electronic statement, billing and payment solutions, and mailing
software.

Capital Services primarily provides large-ticket financing and fee-based
programs covering a broad range of products and other financial services to the
commercial and industrial markets in North America. At December 31, 2000, PBI
and its consolidated subsidiaries had total assets of $7.9 billion and
stockholders' equity of $1.3 billion. For the year ended December 31, 2000,
PBI's consolidated revenue and income from continuing operations were $3.9
billion and $563.1 million, respectively, compared with $3.8 billion and $563.0
million, respectively, for 1999.

COMPETITION AND REGULATION

The finance business is highly competitive with aggressive rate competition.
Leasing companies, commercial finance companies, commercial banks and other
financial institutions compete in varying degrees in the several markets in
which PBCC does business and range from very large diversified financial
institutions to many small, specialized firms. In view of the market
fragmentation and absence of any dominant competitors which result from such
competition, it is not possible to provide a meaningful description of PBCC's
competitive position in its markets. While financing rates are generally
considered by customers to be the principal factor in choosing a financing
source, the Company believes there are additional important factors related to a
customer's decision, including simplicity of documentation, flexibility and ease
of doing business over the duration of the contract. PBCC seeks to distinguish
itself from its competition by providing excellent service to its customers.

PBI has historically been a leading supplier of certain products and services in
its business segments, particularly postage meters and mailing machines.
However, all of its segments have strong competition from a number of companies.
In particular, PBI is facing competition in many countries for new placements
from several postage meter and mailing machine suppliers, and its mailing
systems products face competition from products and services offered as
alternative means of message communications. Pitney Bowes believes that its long
experience and reputation for product quality, and its sales and support service
organizations, along with PBCC, are important factors in influencing customer
choices with respect to its products and services.

Several states have ceilings on interest rates which may be charged to
commercial customers on secured lending transactions. PBCC may be required to
charge lower interest rates in certain jurisdictions than it charges elsewhere,
or to cease offering secured lending transactions in such states. PBCC does not
extend consumer credit as defined in the Federal Consumer Credit Protection Act.
Accordingly, PBCC's financing transactions are not subject to that Act.

FUNDING POLICY

PBCC's borrowing strategy is to use a balanced mix of debt maturities, variable-
and fixed-rate debt and interest rate swap agreements ("interest rate swaps") to
control its sensitivity to interest rate volatility. The Company utilizes
interest rate swaps when it considers the economic benefits to be favorable.
Interest rate swaps 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. (See ITEM 7A.- QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK for information regarding market risk.) The
Company may borrow through the sale of commercial paper, under its confirmed
bank lines of credit and by private and public offerings of intermediate- or
long-term debt securities. In August 1999, the Company established a medium-term
note program for the issuance from time to time of up to $500 million aggregate
principal amount of Medium-Term Notes, Series D having maturities of nine months
or more, of which $175 million aggregate principal amount remains available for
issuance as of December 31, 2000. See Note 12 to the CONSOLIDATED FINANCIAL
STATEMENTS.

While the Company's funding strategy of balancing short-term and longer-term
borrowings and variable- and fixed-rate debt may reduce sensitivity to interest
rate changes over the long-term, effective interest costs have been and will
continue to be impacted by interest rate changes. The Company periodically
adjusts prices on its new leasing and financing transactions to reflect changes
in interest rates; however, the impact of these rate changes on revenue is
usually less immediate than the impact on borrowing costs.

EMPLOYEE RELATIONS

At December 31, 2000, there were 468 individuals employed by the Company and its
subsidiaries. Employee relations are considered to be highly satisfactory.
Management follows the policy of keeping employees informed of its decisions,
and encourages and implements suggestions whenever practicable.

ITEM 2. -- PROPERTIES

PBCC's executive and administrative offices are located in Shelton, Connecticut,
which it leases from PBI. The remaining lease term is for 12 years, cancelable
upon mutual agreement. Except for its executive offices, all of the Company's
remaining office space is occupied under operating leases with original terms
ranging from one to ten years. PBCC has nine district sales offices in or near
major metropolitan areas throughout the United States.

ITEM 3. -- LEGAL PROCEEDINGS

From time to time, the Company is a party to lawsuits that arise in the ordinary
course of its business. These lawsuits may involve litigation by or against the
Company to enforce contractual rights under contracts; lawsuits by or against
the Company relating to equipment, service or payment disputes with customers;
disputes with employees; or other matters. The Company is currently a plaintiff
or defendant in a number of lawsuits, none of which should have, in the opinion
of management and legal counsel, a material adverse effect on the Company's
financial condition or results of operations.

ITEM 4.-- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Omitted pursuant to General Instruction I 2 (c).

PART II
Item 5-Market for the registrant's common equity and related stockholder matters

All of the Company's common stock is owned by Pitney Bowes Inc. Accordingly,
there is no public trading market for the Company's common stock. The Board of
Directors declared and the Company paid dividends to PBI in amounts totaling
$390.6 million in 2000, $85.0 million in 1999 and $86.0 million in 1998. The
Company intends to continue payment of dividends to PBI in 2001.

PITNEY BOWES CREDIT CORPORATION

Item 6. -- Selected financial data

The following tables summarize selected financial data for the Company, and
should be read in conjunction with the more detailed financial statements and
related notes thereto included under Item 8 of this report.

(Dollars in thousands) December 31,
------------------------------------------------------------------------

For the Years Ended (1) 2000 1999 1998 1997 1996
------------------------ ---- ---- ---- ---- ----

Finance income............................... $ 579,089 $ 568,689 $ 514,287 $ 524,913 $ 529,987
Equipment sales.............................. - 8,206 - - 26,666
Selling, general and administrative expenses. 111,232 122,886 99,067 98,542 92,737
Depreciation and amortization................ 18,998 32,053 10,040 15,218 19,155
Cost of equipment sales...................... - 8,206 - - 22,821
Provision for credit losses.................. 55,787 41,917 36,080 34,076 35,617
Interest expense............................. 114,882 121,210 124,411 154,634 163,860
-------- -------- -------- -------- --------
Income from continuing operations before
income taxes 278,190 250,623 244,689 222,443 222,463

Provision for income taxes................... 65,759 60,204 69,946 61,285 70,114
-------- -------- -------- -------- --------
Income from continuing operations............ 212,431 190,419 174,743 161,158 152,349
Discontinued operations, net of tax.......... - (22,947) 32,733 33,675 26,885
-------- -------- -------- -------- --------
Net income................................... $ 212,431 $ 167,472 $ 207,476 $ 194,833 $ 179,234
======== ======== ======== ======== ========
Ratio of earnings from continuing operations to
fixed charges (2) 3.41X 3.06X 2.96X 2.43X 2.35X

At Year End

Gross finance assets

Internal Financing........................... $ 2,572,565 $ 2,699,659 $ 2,311,880 $ 1,991,797 $ 1,842,247
Capital Services............................. 958,792 968,277 1,151,261 2,393,021 3,717,715
-------- -------- -------- -------- --------
Total gross finance assets................... 3,531,357 3,667,936 3,463,141 4,384,818 5,559,962
Unearned income, net of initial direct
costs deferred (689,125) (689,613) (744,891) (909,280) (1,285,778)

-------- -------- -------- -------- --------
Finance assets............................... $ 2,842,232 $ 2,978,323 $ 2,718,250 $ 3,475,538 $ 4,274,184
======== ======== ======== ======== ========

Investment in leveraged leases............... $ 1,024,202 $ 850,000 $ 764,145 $ 667,779 $ 617,970
======== ======== ======== ======== ========

Investment in operating leases, net.......... $ 29,477 $ 45,607 $ 33,261 $ 32,112 $ 86,634
======== ======== ======== ======== ========

Allowance for credit losses.................. $ (74,129) $ (80,655) $ (115,233) $ (116,588) $ (98,721)
======== ======== ======== ======== ========

Total assets................................. $ 5,529,886 $ 5,382,976 $ 5,293,670 $ 5,328,340 $ 5,347,002
======== ======== ======== ======== ========

Senior notes payable

Within one year.............................. $ 1,004,949 $ 1,044,573 $ 991,853 $ 1,970,110 $ 1,901,581
After one year............................... 1,224,819 1,332,000 1,382,000 1,050,000 1,275,000
-------- -------- -------- -------- --------
Total senior notes payable................... $ 2,229,768 $ 2,376,573 $ 2,373,853 $ 3,020,110 $ 3,176,581
======== ======== ======== ======== ========

Short-term notes payable to affiliates....... $ 119,464 $ 37,000 $ 137,000 $ - $ 139,400
======== ======== ======== ======== ========
Long-term notes payable to affiliates........ $ 259,000 $ 333,000 $ 333,000 $ - $ -
======== ======== ======== ======== ========
Subordinated notes payable................... $ 362,926 $ 299,892 $ 285,886 $ 270,487 $ 229,154
======== ======== ======== ======== ========

Stockholder's equity......................... $ 1,420,640 $ 1,298,809 $ 1,216,337 $ 1,094,861 $ 978,028
======== ======== ======== ======== ========

Debt to equity............................... 2.09:1 2.35:1 2.57:1 3.01:1 3.62:1

(1) For the years ended December 31, 1999 and 1998, AMIC and CPLC have been
accounted for as discontinued operations in the Consolidated Statements of
Income. Consequently, prior years' Consolidated Statements of Income have
been reclassified to conform to current year presentation.

(2) The computation of the ratio of earnings to fixed charges has been computed
by dividing income from continuing operations before income taxes as
adjusted by fixed charges. Included in fixed charges is one-third of rental
expense as the representative portion of interest. (See Item 14 - Exhibit
12 for calculation)

PITNEY BOWES CREDIT CORPORATION

ITEM 7.-- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Overview

Income from continuing operations was $212.4 million in 2000, an increase of
$22.0 million (11.6%) from $190.4 million in 1999. Income from continuing
operations in 1999 represented an increase of $15.7 million (9.0%) from 1998.
The improvement throughout the three-year period was largely attributable to
growth in the Company's internal financing segment and higher fee- and
service-based income.

As part of a strategic alliance with U.S. Bank, a division of U.S. Bancorp, on
June 30, 2000 PBCC sold its PitneyWorksSM Business RewardsSM Visa(R) and
Business Visa(R) card operations, including credit card receivables of
approximately $322 million. The Company expects to earn fees in connection with
the strategic alliance with U.S. Bank. However, the Company is no longer
originating credit card receivables and as a result will not be earning finance
income on those balances. The transaction is subject to post-closing
adjustments.

On January 14, 2000, the Company sold its mortgage servicing business, Atlantic
Mortgage & Investment Corporation (AMIC), a wholly-owned subsidiary of the
Company, to ABN AMRO North America. The Company received approximately $484
million in cash at closing. Accordingly, operating results of AMIC have been
segregated and reported as discontinued operations in the Consolidated
Statements of Income. Prior year results have been reclassified to conform to
the current year presentation. In connection with the sale, the Company recorded
a loss of approximately $27.6 million (net of taxes of $18.4 million) for the
year ended December 31, 1999. The transaction is subject to post-closing
adjustments. See Note 2 to the consolidated financial statements

As part of the Company's strategy to reduce the capital committed to asset-based
financing, while increasing fee-based income in 1998, the Company sold its
broker-oriented small-ticket leasing business to General Electric Capital
Corporation (GECC), a subsidiary of General Electric Company. As part of the
sale, the operations, employees and substantially all the assets of Colonial
Pacific Leasing Corporation (CPLC) were transferred to GECC. The Company
received approximately $790 million at closing, which approximates the book
value of net assets sold or otherwise disposed of and related transaction costs.
Accordingly, operating results of CPLC have been segregated and reported as
discontinued operations in the Consolidated Statements of Income. In connection
with this transaction, the Company recorded a gain of approximately $3.7 million
(net of taxes of $2.0 million) for the year ended December 31, 1999. This gain
resulted from the settlement of post-closing adjustments in 1999 related to the
sale, offset by the cost of settlement with regard to a dispute with GECC over
certain assets that were included in the sale. See Note 2 to the consolidated
financial statements.

Results from Continuing Operations

Finance income increased $10.4 million (1.8%) to $579.1 million in 2000,
following a $54.4 million (10.6%) increase to $568.7 million in 1999. The net
increases primarily reflect a combination of portfolio growth in the internal
leasing business coupled with higher fee- and service-based revenue from the
Company's postage payment programs.

Selling, general and administrative ("SG&A") expenses decreased $11.7 million
(9.5%) to $111.2 million in 2000 compared with $122.9 million in 1999 and $99.1
million for 1998. The decrease in 2000 is primarily due to the sale of the
credit card portfolio in June 2000 and benefits from the regional consolidation
project completed early in 2000. The increase experienced in 1999 was due to
growth in the credit card portfolio and transition costs associated with the
regional consolidation project.

Net interest expense decreased $6.3 million (5.2%) to $114.9 million in 2000
compared with $121.2 million in 1999 and $124.4 million in 1998. The decrease in
2000 was due to lower average borrowings required to support lower earning asset
levels related to the sale of the credit card operation, partly offset by higher
interest rates in 2000. The effective interest rate on average borrowings was
6.86 percent in 2000 compared to 5.63 percent in 1999 and 5.68 percent in 1998.
Included in 1999 net interest expense was the effect of a $3.6 million gain from
the termination of an interest rate swap in September of that year. The swap was
for a notional principal amount of $125 million, at a fixed interest rate of
5.83 percent and a floating rate equal to the Money Market Yield of Commercial
Paper - Nonfinancial. Under the terms of the swap agreement the Company was the
fixed rate payor. The swap would have been effective through February 2, 2005.
The Company does not match fund its financing investments.

The provision for credit losses increased $13.9 million (33.1%) to $55.8 million
in 2000 compared with $41.9 million for 1999 and $36.1 million in 1998. The
year-to-year increases were mainly due to the high growth experienced in the
Company's postage payment programs and the credit card operation prior to its
sale in June 2000.

Depreciation of equipment under operating leases was $4.4 million, $5.2 million
and $6.0 million for years ended December 31, 2000, 1999 and 1998, respectively.
This reflects the ongoing decrease in the Company's investment in operating
leases.

PITNEY BOWES CREDIT CORPORATION

ITEM 7.-- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Provisions for income taxes on continuing operations were $65.8 million (an
effective tax rate of 23.6%) for the year ended December 31, 2000 compared with
$60.2 million (an effective tax rate of 24.0%) for 1999 and $69.9 million (an
effective tax rate of 28.6%) in 1998. The decrease in the effective tax rate
from 1999 to 2000 is primarily attributable to the impact of cumulative
adjustments made to recognize decreases in state income tax rates. The decrease
in the effective rate from 1998 to 1999 is principally attributable to the
impact of certain Capital Services partnership leasing transactions entered into
during 1999.

Business Segments

On December 11, 2000 Pitney Bowes announced that its Board of Directors approved
a formal plan to spin off its Office Systems business to stockholders as an
independent, publicly-traded company. The transaction is expected to be
completed by the end of the third quarter 2001. Financing for the Office Systems
business products had been included as a component of PBCC's Internal Financing
programs. For the year ended December 31, 2000, operating results of Office
Systems have been segregated and treated as discontinued operations by Pitney
Bowes. Accordingly, copier and facsimile financing is being reported by PBCC as
a component of Capital Services. Prior years' information has been reclassified
to conform to the current year presentation.

Revenue and income from continuing operations for the Company, by business
segment, for the years ended December 31, 2000, 1999 and 1998 are summarized
below.

(in thousands of dollars) 2000 1999 1998
----- ---- ----
Revenue:

Internal Financing.......................................... $ 407,676 $ 383,187 $ 327,371
Capital Services............................................ 171,413 193,708 186,916
------- ------- -------
Total revenue.......................................... $ 579,089 $ 576,895 $ 514,287
======== ======== ========
Income from continuing operations
before income taxes:

Internal Financing.......................................... $ 225,333 $ 211,542 $ 183,555
Capital Services............................................ 52,857 39,081 61,134
------ ------- -------
Total income from continuing operations
before income taxes.................................... $ 278,190 $ 250,623 $ 244,689
======== ======== ========

Internal financing revenue increased 6.4 percent in 2000 and 17.0 percent in
1999, while income from continuing operations before income taxes increased 6.6
percent in 2000 and 15.2 percent in 1999. The growth experienced in revenue and
income from continuing operations before income taxes was primarily due to
higher earning asset levels in its internal leasing business and higher fee- and
service-based income from postage payment programs.

Capital Services revenue decreased 11.5 percent in 2000 and increased 3.6
percent in 1999, while income from continuing operations before income taxes
increased 35.2 percent in 2000 and decreased 36.1 percent in 1999. The decrease
in revenue from 1999 reflects the Company's ongoing effort to reduce reliance on
investment levels in the Capital Services business. Additionally, the Company
sold operating lease assets in 1999, which generated $8.2 million in equipment
sales revenue. The increase in income from continuing operations before income
taxes in 2000 is due to lower depreciation and amortization costs and lower
credit loss provision requirements in the copier portfolio. The Company
continues to pursue a strategy of selective asset sales and limited new
investments.

Accounting Changes

In 1998 the Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 131, "Disclosures about Segments of an Enterprise and Related Information".
Under SFAS No. 131, the Company has two reportable segments: Internal Financing
and Capital Services. See Note 13 to the consolidated financial statements.

PITNEY BOWES CREDIT CORPORATION

ITEM 7.-- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

In June 1998, SFAS No. 133 "Accounting for Derivative Instruments and Hedging
Activities", amended in June 2000 by SFAS No. 138, was issued. SFAS No. 133
requires that an entity recognize all derivative instruments as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. Changes in the fair value of those instruments will be reflected
as gains or losses. The accounting for the gains and losses depends on the
intended use of the derivative and the resulting designation. Adoption of these
accounting standards is expected to result in a one-time cumulative after-tax
reduction in other comprehensive income of approximately $7.0 million in the
first quarter of 2001 and will also impact assets and liabilities recorded on
the balance sheet. Adoption of these standards is not expected to materially
impact net income in 2001.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements", summarizing certain guidance in applying generally accepted
accounting principles to revenue recognition in financial statements. The
Company adopted the provisions of SAB No. 101 in the fourth quarter of 2000,
retroactive to January 1, 2000. Adoption of this standard did not have a
material impact on the Company for the year ended December 31, 2000.

In September 2000, SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" was issued, amending SFAS
No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities". SFAS No. 140 revised the standards for
accounting for securitizations and other transfers of financial assets and
collateral, as well as requiring certain additional disclosures. However, it
carries over most of the provisions contained in SFAS No. 125. SFAS No. 140 is
effective for transfers and servicing of financial assets and extinguishment of
liabilities occurring after March 31, 2001. However, it is effective for the
recognition and reclassification of collateral and for disclosures relating to
those transactions for the year ended December 31, 2000. The Company does not
expect implementation of this statement to have a material effect on results of
operations, financial position or cash flows.

Portfolio Quality

Finance assets represent the Company's largest asset and its primary source of
revenue. The Company's finance assets at December 31, 2000 decreased $136.1
million to approximately $2.8 billion from approximately $3.0 billion at the end
of 1999. The decrease was primarily due to the sale of PBCC's credit card
operations offset by increased investment in its internal leasing business.

Lease finance receivables represent the Company's expected future rental
payments on its finance leases and at December 31, 2000 amounted to
approximately $2.8 billion compared to approximately $2.7 billion at December
31, 1999. The increase is mainly attributable to growth experienced in the
Company's internal leasing business.

Other finance receivables represent the amount invested in the Company's postage
payment and revolving credit products, including its PitneyWorksSM Business
RewardsSM Visa(R) and Business Visa(R) card operations that were sold in June
2000. The balance of other finance receivables at December 31, 2000 was $343.1
million compared to $539.5 million at December 31, 1999. The decrease reflects
the sale of the Company's credit card operations referred to above, partially
offset by growth in the postage payment products.

Non-performing receivables are those on which the Company has discontinued
recognizing revenue. For transactions in the internal financing programs, the
Company discontinues income recognition for finance receivables past due over
120 days. The Company has utilized this period because historically, internal
collection efforts have continued for this time period. In Capital Services
programs, income recognition is discontinued as soon as it is apparent that the
obligor will not be making payments in accordance with lease terms, such as in
the event of bankruptcy. Otherwise, income recognition is discontinued when
accounts are over 90 days past due. Non-performing receivables at December 31,
2000 were $51.5 million (1.8% of total finance assets) compared with $51.1
million (1.7% of total finance assets) at December 31, 1999.

The Company's allowance for credit losses as a percentage of net lease
receivables (net investments before allowance for credit losses plus the
uncollected principal balance of receivables sold) was 1.71 percent at December
31, 2000 and 1.83 percent at December 31, 1999. PBCC charged $62.3 million and
$85.8 million against the allowance for credit losses in 2000 and 1999,
respectively.

PITNEY BOWES CREDIT CORPORATION

ITEM 7.-- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

The Company's principal sources of funds are from operations and borrowings. It
has been PBCC's practice to use a balanced mix of debt maturities, variable- and
fixed-rate debt and interest rate swap agreements to control sensitivity to
interest rate volatility. PBCC's debt mix was 38 percent short-term and 62
percent long-term at December 31, 2000 and 36 percent short-term and 64 percent
long-term at December 31, 1999. PBCC's swap-adjusted variable-rate versus
fixed-rate debt mix was 42 percent variable-rate and 58 percent fixed-rate at
December 31, 2000, and 43 percent variable-rate and 57 percent fixed-rate at
December 31, 1999. The Company may borrow through the issuance of commercial
paper, under its confirmed bank lines of credit, and by private and public
offerings of intermediate- or long-term debt securities. Together with its
parent, PBI, the Company had unused lines of credit and revolving credit
facilities totaling $1.5 billion at December 31, 2000, largely supporting its
commercial paper borrowings. More detailed information regarding the Company's
debt is contained in Note 12 to the CONSOLIDATED FINANCIAL STATEMENTS.

PBCC has $425 million of unissued debt securities available at December 31, 2000
from a shelf registration statement filed with the SEC in July 1998. As part of
this shelf registration statement in August 1999, PBCC established a medium-term
note program for the issuance from time to time of up to $500 million aggregate
principal amount of Medium-Term-Notes, Series D, of which $175 million remained
available at December 31, 2000.

In December 2000, PBCC issued $100 million of unsecured floating rate notes
maturing April 2002 and $100 million of unsecured floating rate notes maturing
June 2004, under the medium-term note program. These notes bear interest at
floating rates of LIBOR plus 5 basis points and 25 basis points, respectively,
set as of the quarterly interest payment dates. The proceeds from these notes
were used for general corporate purposes, including the repayment of commercial
paper.

In April 2000, certain partnerships controlled by affiliates of PBCC issued a
total of $134 million of Series A and Series B Secured Floating Rate Senior
Notes. The notes are due in 2003 and bear interest at 7.44%. The proceeds from
the notes were used to purchase subordinated debt obligations from PBI ("PBI
Obligations"). The PBI Obligations have a principal amount of $134 million and
bear interest at 8.073% for the first three years and reset in May 2003 and each
third anniversary of the first reset date. The proceeds from the PBI Obligations
were used for general corporate purposes, including the repayment of short-term
debt. In March 2000, PBCC issued $43.3 million of 7.52% Senior Notes maturing
2002 through 2012. The proceeds from these notes were used to pay down
commercial paper.

In September 1999, PBCC issued $125 million of 5.95% unsecured notes available
under the medium-term note program. The proceeds from the notes were used for
general corporate purposes, including the repayment of short-term debt. The
notes matured in September 2000. The Company's utilization of derivative
instruments is normally limited to interest rate swap agreements ("Interest Rate
Swaps") and foreign currency exchange forward contracts ("Foreign Currency
Contracts"). The Company periodically enters into interest rate swaps as a means
of managing interest rate exposure. The interest rate differential paid or
received over the life of the agreements is recognized as an adjustment to
interest expense. The Company is exposed to credit loss in the event of
non-performance by the counterparties to the interest rate swaps to the extent
of the differential between fixed- and variable-rates; such exposure is
considered minimal. At December 31, 2000 the Company was counterparty to
interest rate swaps with a total notional amount of $550 million.

The Company periodically enters into foreign currency contracts for the purpose
of minimizing its risk of loss from fluctuations in exchange rates in connection
with certain intercompany transactions. The Company is exposed to credit loss in
the event of non-performance by the counterparties to the foreign currency
contracts to the extent of the difference between the spot rate at the date of
the contract delivery and the contracted rate; such exposure is also considered
minimal. At December 31, 2000 there were no foreign currency contracts
outstanding.

Since the Company normally enters into derivative transactions only with members
of its banking group, the credit risk of these transactions is monitored as part
of the normal credit review of the banking group. The Company monitors the
market risk of derivative instruments through periodic review of fair market
values.

Under the Finance Agreement between Pitney Bowes and the Company, Pitney Bowes
is obligated on a quarterly basis to make payments, to the extent necessary, so
that the Company's earnings available for fixed charges for the preceding one
year period shall not be less than 1.25 times its fixed charges. Pitney Bowes
has also agreed to make any past due principal, interest or premium payments on
behalf of PBCC in respect to all approved debt and/or commercial paper, in the
event that PBCC is unable to make such payments. To date, no such payments from
Pitney Bowes have been required.

PITNEY BOWES CREDIT CORPORATION

ITEM 7.-- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The Company will continue to use cash to invest in finance assets with emphasis
on Internal Financing transactions and select investment in Capital Services
programs. The Company believes that cash generated from operations and
collections on existing lease contracts will provide the majority of cash needed
for such investment activities. Borrowing requirements will be dependent upon
the level of equipment purchases from Pitney Bowes Inc., the level of Capital
Services financing activity, capital requirements for new business initiatives,
intercompany loans, and the refinancing of maturing debt. Additional cash, to
the extent needed, is expected to come from commercial paper and intermediate-
or long-term debt securities and intercompany funds, when available. While the
Company expects that market acceptance of its debt will continue to be strong,
additional liquidity is available under revolving credit facilities and credit
lines.

FORWARD - LOOKING STATEMENTS

The Company wants to caution readers that any forward-looking statements with
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 (those which talk about the company's or
management's current expectations as to the future) in this Form 10-K or any
other filing by the Company, or made by the Company's management involve risks
and uncertainties which may change based on various factors. Words such as
"estimate", "project", "plan", "believe", "expect" and similar expressions may
identify such forward-looking statements. Some of the factors which could cause
future financial performance to differ materially from the expectations as
expressed in any forward-looking statement made by or on behalf of the Company
include, but are not limited to:

o changes in postal regulations
o timely development and acceptance of new products
o success in gaining product approval in new markets where regulatory approval
is required
o successful entry into new markets
o mailers' utilization of alternative means of communication or
competitors' products
o the Company's success at managing customer credit and residual value risks
o changes in interest rates
o terms and timing of the spin-off of Office Systems from Pitney Bowes

ITEM 7A. -- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to the impact of interest rate changes due to its
investing and funding activities.

The Company's objective in managing its exposure to interest rate changes is to
limit the impact of these changes on earnings and cash flows and to lower its
overall borrowing costs. To achieve its objectives, the Company uses a balanced
mix of debt maturities and variable and fixed rate debt together with interest
rate swaps.

The Company employs established policies and procedures governing the use of
financial instruments to manage its exposure to such risks. The Company does not
enter into interest rate transactions for speculative purposes.

The Company utilizes a "Value-at-Risk" ("VaR") model to determine the maximum
potential loss in fair value from changes in market conditions. The VaR model
utilizes a "variance/co-variance" approach and assumes normal market conditions,
a 95% confidence level and a one-day holding period. The model includes all of
the company's debt and all interest rate and foreign exchange derivative
contracts. Anticipated transactions, firm commitments and receivables and
accounts payable denominated in foreign currencies, which certain of these
instruments are intended to hedge were excluded from the model.

The VaR model is a risk analysis tool and does not purport to represent actual
losses in fair value that will be incurred by the Company, nor does it consider
the potential effect of favorable changes in market factors.

At December 31, 2000, the Company's maximum potential one-day loss in fair value
of the Company's exposure to interest rates using the variance/co-variance
technique described above, was not material.

PITNEY BOWES CREDIT CORPORATION

Item 8. -- Financial statements and supplementary data

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholder and Board of Directors of
Pitney Bowes Credit Corporation

In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) on page 39 present fairly, in all material
respects, the financial position of Pitney Bowes Credit Corporation and its
subsidiaries (the "Company") at December 31, 2000 and 1999, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States of America. In addition, in our opinion, the
financial statement schedule listed in the index appearing under Item 14(a)(2)
on page 39 presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements. These financial statements and the financial statement schedule are
the responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements and the financial statement schedule
based on our audits. We conducted our audits of these statements in accordance
with auditing standards generally accepted in the United States of America which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Stamford, Connecticut
January 22, 2001

PITNEY BOWES CREDIT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(in thousands of dollars)

Years Ended December 31 2000 1999 1998
---- ---- ----
Revenue:

Finance income...................................... $ 579,089 $ 568,689 $ 514,287
Equipment sales..................................... - 8,206 -
------- ------- -------

Total revenue..................................... 579,089 576,895 514,287
------- ------- -------

Expenses:
Selling, general and administrative................. 111,232 122,886 99,067
Interest, net....................................... 114,882 121,210 124,411
Provision for credit losses......................... 55,787 41,917 36,080
Depreciation and amortization....................... 18,998 32,053 10,040
Cost of equipment sales............................. - 8,206 -
------- ------- -------
Total expenses.................................... 300,899 326,272 269,598
------- ------- -------
Income from continuing operations
before income taxes................................. 278,190 250,623 244,689
Provision for income taxes............................ 65,759 60,204 69,946
------- ------- -------
Income from continuing operations..................... 212,431 190,419 174,743
Discontinued operations:
Income from discontinued operations, net of taxes
of $177 in 1999 and $17,751 in 1998............... - 971 32,733
Loss on disposal of discontinued operations, net of
tax benefits of $16,382 in 1999................... - (23,918) -
------- ------- -------

Net income [1]........................................ $ 212,431 $ 167,472 $ 207,476
======= ======= =======

Consolidated Statement of Retained Earnings

(in thousands of dollars)

Years Ended December 31 2000 1999 1998
---- ---- ----

Retained earnings at beginning of year................ $ 1,211,084 $ 1,128,612 $ 1,007,136
Net income for the year............................... 212,431 167,472 207,476
Dividends paid to Pitney Bowes Inc. (390,600) (85,000) (86,000)
-------- -------- --------

Retained earnings at end of year...................... $ 1,032,915 $ 1,211,084 $ 1,128,612
======== ======== ========

[1] For the years ended December 31, 2000, 1999 and 1998, the Company
had no other comprehensive income items. Consequently, net income
represents the Company's total comprehensive income.

The accompanying notes are an integral part of the financial statements.

PITNEY BOWES CREDIT CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands of dollars)

December 31,
2000 1999
---- ----
Assets:

Cash and cash equivalents................................................ $ 81,211 $ 132,914
--------- ---------
Investments:
Finance assets......................................................... 2,842,232 2,978,323
Investment in leveraged leases......................................... 1,024,202 850,000
Investment in operating leases, net of accumulated depreciation........ 29,477 45,607
Allowance for credit losses............................................ (74,129) (80,655)
--------- ---------
Net investments...................................................... 3,821,782 3,793,275
--------- ---------

Assets held for sale................................................... 363,622 342,934
Investment in partnership.............................................. 166,850 167,071
Loans and advances to affiliates....................................... 968,430 362,012
Net assets of discontinued operations.................................. - 491,763
Other assets........................................................... 127,991 93,007
--------- ---------
Total assets........................................................ $ 5,529,886 $ 5,382,976
========= =========

Liabilities:

Senior notes payable within one year................................... $ 1,004,949 $ 1,044,573
Short-term notes payable to affiliates................................. 119,464 37,000
Accounts payable to affiliates......................................... 207,473 227,503
Accounts payable and accrued liabilities............................... 338,385 283,361
Deferred taxes......................................................... 592,230 526,838
Senior notes payable after one year.................................... 1,224,819 1,332,000
Long-term notes payable to affiliates.................................. 259,000 333,000
Subordinated notes payable............................................. 362,926 299,892
--------- ---------
Total liabilities.................................................. 4,109,246 4,084,167
--------- ---------
Stockholder's Equity:

Common stock........................................................... 46,000 46,000
Capital in excess of par value......................................... 341,725 41,725
Retained earnings...................................................... 1,032,915 1,211,084
--------- ---------
Total stockholder's equity.......................................... 1,420,640 1,298,809
--------- ---------
Total liabilities and stockholder's equity.......................... $ 5,529,886 $ 5,382,976
========= =========

The accompanying notes are an integral part of the financial statements.

PITNEY BOWES CREDIT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of dollars)

Years Ended December 31 2000 1999 1998
---- ---- ----
Operating Activities

Net income........................................................... $ 212,431 $ 167,472 $ 207,476
Loss on disposal of discontinued operations, net of taxes............ - 23,918 -
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for credit losses....................................... 55,787 51,217 65,404
Depreciation and amortization..................................... 18,998 120,136 75,163
Increase (decrease) in deferred taxes............................... 65,392 56,314 (23,154)
(Increase) decrease in other assets................................. (50,962) 120,939 (159,638)
(Decrease) increase in accounts payable to affiliates............... (20,030) (50,949) 45,535
Increase in accounts payable and accrued liabilities................ 55,024 60,825 11,385
Other, net.......................................................... (17,486) (34,271) (998)
--------- --------- --------
Net cash provided by operating activities 319,154 515,601 221,173
--------- --------- --------
Investing Activities

Proceeds and cash receipts from sale of subsidiary................. 512,780 - 789,936
Proceeds from sale of credit card operations....................... 321,746 - -
Investment in revolving credit products, net....................... (125,355) (239,374) (149,782)
Investment in net finance assets................................... (721,514) (715,638) (782,040)
Investment in mortgage service rights.............................. - (28,738) (206,464)
Investment in leveraged leases..................................... (126,177) (70,014) (77,441)
Investment in operating leases..................................... (355) (552) (6,366)
Investment in assets held for sale................................. (652,830) (552,060) (545,149)
Cash receipts collected under lease contracts, net of finance
income recognized............................................... 1,193,173 1,123,195 1,366,163
Long-term loans and advances to affiliates........................... (134,000) - (282,000)
Short-term loans and advances to affiliates, net..................... (472,418) 249,614 (39,138)
--------- --------- --------
Net cash (used in) provided by investing activities.................. (204,950) (233,567) 67,719
--------- --------- --------
Financing Activities

Change in commercial paper borrowings, net........................ 122,300 230,300 (1,187,410)
Change in other short-term debt, net.............................. (465,573) (152,580) 174,953
Loans from affiliates............................................. 8,464 (100,000) 470,000
Proceeds from issuance of senior notes payable after one year..... 377,268 125,000 532,000
Proceeds from issuance of subordinated debt....................... 63,034 14,006 15,399
Settlement of long-term debt...................................... (180,800) (200,000) (225,000)
Capital contribution from Pitney Bowes Inc........................ 300,000 - -
Dividends paid to Pitney Bowes Inc................................ (390,600) (85,000) (86,000)
--------- --------- --------
Net cash used in financing activities................................ (165,907) (168,274) (306,058)
--------- --------- --------
(Decrease) increase in cash and cash equivalents..................... (51,703) 113,760 (17,166)
Cash and cash equivalents at beginning of year....................... 132,914 19,154 36,320
--------- --------- --------
Cash and cash equivalents at end of year............................. $ 81,211 $ 132,914 $ 19,154
========= ========= ========

Interest paid........................................................ $ 180,304 $ 155,044 $ 162,270
========= ========= ========
Income taxes (refunded) paid, net.................................... $ (50,869) $ 25,456 $ (63,420)
========= ========= ========

Supplemental noncash activities:

During 1998, the Company acquired a lease portfolio consisting of direct
financing and operating leases. In connection with this acquisition, the Company
assumed certain non-recourse debt in the amount of $59.2 million.

The accompanying notes are an integral part of the financial statements.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 1. - Summary of Significant Accounting Policies

Consolidation - The consolidated financial statements include the accounts of
Pitney Bowes Credit Corporation and all of its subsidiaries (the "Company" or
"PBCC"). All significant intercompany transactions and balances have been
eliminated. Use of estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents - Cash equivalents include short-term, highly liquid
investments with a maturity of three months or less from the date of
acquisition. The Company places its temporary cash and short-term investments
with financial institutions and limits the amount of credit exposure with any
one institution.

Basis of accounting for financing transactions - At the time a financing
transaction is consummated, the Company records on its balance sheet the total
receivable, unearned income and the estimated residual value of leased
equipment. Unearned income represents the excess of the total receivable plus
the estimated residual value over the cost of equipment. Unearned income is
recognized as finance income under the interest method over the term of the
transaction. Initial direct costs incurred in consummating transactions,
including fees paid to Pitney Bowes Inc. ("Pitney Bowes" or "PBI"), are
accounted for as part of the investment in a direct financing lease and
amortized to income using the interest method over the term of the lease. Fee
income is recognized as services are provided.

The Company has, from time-to-time, sold selected finance assets. Beginning
January 1, 1997, the Company adopted Statement of Financial Accounting Standards
No. 125 "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," to account for the sale of these assets. All
assets obtained or liabilities incurred in consideration are recognized as
proceeds of the sale and any resulting gain or loss is recognized in income
currently.

The Company's investment in leveraged leases consists of rentals receivable net
of principal and interest on the related nonrecourse debt, estimated residual
value of the leased asset and unearned income. At lease inception, unearned
income represents the excess of rentals receivable, net of that portion of the
rental applicable to principal and interest on the nonrecourse debt, plus the
estimated residual value of the leased property over the Company's investment in
the transaction. Unearned income is recognized as finance income over the term
of the transaction.

Investment in operating leases - Equipment under operating leases is depreciated
over the initial term of the lease to its estimated residual value. Rental
income is recognized on a straight-line basis over the related lease term.

Allowance for credit losses - The Company evaluates the collectibility of its
net investment in finance assets based upon its loss experience and assessment
of prospective risk, and does so through ongoing reviews of its exposures to net
asset impairment. The Company adjusts the carrying value of its net investment
in finance assets to the estimated collectible amount through adjustments to the
allowance for credit losses. Finance receivables are charged to the allowance
for credit losses after the account is deemed uncollectible. (See Note 6 to
CONSOLIDATED FINANCIAL STATEMENTS.)

The Company's general policy is to discontinue income recognition for finance
receivables contractually past due for over 90 to 120 days depending on the
nature of the transaction. Resumption of income recognition occurs when payments
reduce the account to 60 days or less past due. Capital Services transactions
are reviewed on an individual basis. Income recognition is discontinued when it
is apparent an obligor will not be making payment in accordance with lease terms
and is resumed when the Company has sufficient experience on resumption of
payments to be satisfied that such payments will continue in accordance with
contract terms.

Income taxes - The Company's taxable results are included in the consolidated
Federal and certain state income tax returns of Pitney Bowes. Primarily all the
accounts of the Company are included in the consolidated federal income tax
return and certain consolidated state income tax returns of PBI. However, the
provision for income taxes is calculated as if the Company had filed separate
federal and state income tax returns. Under a tax sharing agreement between the
Company and Pitney Bowes, the Company makes payments to Pitney Bowes for its
share of consolidated income taxes or receives cash equal to the benefit of tax
losses utilized in consolidated returns in exchange for which it issues
non-interest bearing subordinated notes with a maturity one day after all senior
debt is repaid. For tax purposes, income from leases is recognized under the
operating method and represents the difference between gross rentals billed and
operating expenses. Deferred taxes reflected in the Company's balance sheet
represent the difference between Federal and state income taxes reported for
financial and tax reporting purposes, less non-interest bearing subordinated
notes issued.

Reclassifications - Certain prior years' amounts have been reclassified in order
to conform to current year presentation.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 2. - Discontinued Operations

On January 14, 2000, the Company sold its mortgage servicing business, Atlantic
Mortgage & Investment Corporation (AMIC), a wholly-owned subsidiary of the
Company, to ABN AMRO North America. The Company received approximately $484
million in cash at closing. Accordingly, operating results of AMIC have been
segregated and reported as discontinued operations in the Consolidated
Statements of Income for 1999 and 1998. In connection with the sale, the Company
recorded a loss of approximately $27.6 million (net of tax benefits of $18.4
million) for the year ended December 31, 1999. The transaction is subject to
post-closing adjustments.

On October 30, 1998, the Company's wholly-owned subsidiary, Colonial Pacific
Leasing Corporation ("CPLC"), transferred the operations, employees and
substantially all assets related to its broker-oriented small-ticket leasing
business to General Electric Capital Corporation ("GECC"). As part of the sale,
the Company retained certain non-performing accounts of CPLC. (See Note 6 to
CONSOLIDATED FINANCIAL STATEMENTS.) The Company received approximately $790
million at closing, which approximates the book value of the net assets sold or
otherwise disposed of and related transaction costs. The transaction is subject
to post-closing adjustments. In connection with this transaction, the Company
recorded a gain of approximately $3.7 million (net of taxes of $2.0 million) for
the year ended December 31, 1999. This gain resulted from the settlement of
post-closing adjustments in 1999 related to the sale, offset by the cost of
settlement with regard to a dispute with GECC over certain assets that were
included in the sale. Operating results of CPLC have been segregated and
reported as discontinued operations in the Consolidated Statements of Income for
1998.

Cash flow impacts of discontinued operations have not been segregated in the
accompanying consolidated statements of cash flows. Details of income from
discontinued operations, net of income taxes, are as follows (in thousands of
dollars):

2000 1999 1998
---- ---- ----

AMIC (net of taxes of $177 and $12,514)....... $ - $ 971 $ 24,280
CPLC (net of taxes of $5,237)................. - - 8,453
------- ------- -------
Income from discontinued operations, net
of taxes $ - $ 971 $ 32,733
======= ======= =======

Mortgage servicing revenue of AMIC was $114.9 million and $132.1 million for the
years ended December 31, 1999 and 1998, respectively. Net interest expense
allocated to AMIC's discontinued operations was $5.6 million, and $4.9 million
for the years ended December 31, 1999 and 1998, respectively. Interest has been
allocated based on the level of intercompany borrowings by AMIC, charged at the
Company's weighted average borrowing rate, partially offset by the interest
savings the Company realized due to its borrowing against AMIC's escrow deposits
as opposed to regular commercial paper borrowings.

Finance income of CPLC was $128.8 million for the year ended December 31, 1998.
Income from discontinued operations included interest expense of $33.9 million,
allocated to CPLC based on its level of intercompany borrowings, charged at the
Company's weighted average borrowing rate.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 3. - Finance Assets

The composition of the Company's finance assets is as follows:

December 31 2000 1999
---- ----
(in thousands of dollars)

Lease finance receivables.................................. $ 2,831,418 $ 2,713,358
Other finance receivables.................................. 343,108 539,499
--------- ---------
Total gross finance receivables......................... 3,174,526 3,252,857
Unguaranteed residual valuation............................ 356,831 415,079
--------- ---------
Total gross finance assets.............................. 3,531,357 3,667,936
Initial direct costs deferred.............................. 43,845 43,916
Unearned income............................................ (732,970) (733,529)
--------- ---------
Total finance assets.................................... $ 2,842,232 $ 2,978,323
========= =========

Lease finance receivables represent earning assets held by the Company which are
generally due in monthly, quarterly or semi-annual installments over original
periods ranging from 36 to 180 months. In addition, lease finance receivables
for Capital Services programs include commercial jet aircraft transactions with
lease terms of up to 24 years and other non-commercial jet aircraft transactions
with lease terms of up to ten years.

Other finance receivables primarily represent the Company's investment in its
revolving credit products for postage payments and in 1999, credit card
receivables.

Gross finance assets at December 31, 2000, including estimated residual value
realizable at the end of the lease term, is payable as follows:

Gross Finance Assets
-----------------------------------------------------------

Internal Financing Capital Services Total

2001 $ 1,175,639 $ 238,463 $ 1,414,102
2002 661,951 155,600 817,551
2003 438,001 125,444 563,445
2004 222,952 77,830 300,782
2005 64,129 58,404 122,533
Thereafter 9,893 303,051 312,944
--------- -------- ---------

Total $ 2,572,565 $ 958,792 $ 3,531,357
========= ======== =========

Pitney Bowes products financed during 2000, 1999 and 1998 were $544.0 million,
$552.7 million and $529.8 million, respectively.

During 1997, PBCC and GATX Corporation ("GATX") formed PBG Capital Partners LLC
("PBG") for the purpose of financing and managing certain leasing related
assets. PBCC and GATX each contributed assets (primarily direct financing
leases) to PBG. The Company and GATX each maintain a 50 percent ownership
interest and jointly manage PBG. PBCC accounts for its investment in PBG under
the equity method and recorded income of $11.5 million, $6.0 million and $8.0
million for the years ended December 31, 2000, 1999 and 1998 respectively. PBCC
contributed $65.3 million of assets to PBG during 1998 and received cash
distributions totaling $4.6 million in 2000 and $3.2 million in 1999.

During 2000 and 1999, PBCC sold finance assets with limited recourse of $156.9
million and $196.1 million respectively. The uncollected principal balance of
receivables sold at December 31, 2000 and 1999 was $448.2 million and $534.4
million, respectively. The maximum risk of loss in these transactions arises
from the possible non-performance of lessees to meet the terms of their
contracts. The Company believes adequate provisions have been made for sold
receivables which may become uncollectible.

As of December 31, 2000, $170.2 million (6.0 percent) of the Company's finance
assets and $227.4 million (6.4 percent) of the Company's gross finance assets
were related to aircraft leased to commercial airlines. The Company considers
its credit risk for these leases to be minimal due to the credit worthiness of
the underlying lessees and the fact that all payments are being made in
accordance with lease agreements.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 3. - Finance Assets (continued)

The Company believes any potential exposure in commercial aircraft investment is
mitigated by the value of the collateral as the Company retains a security
interest in the leased aircraft

Note 4. - Net Investment in Leveraged Leases

The Company's net investment in leveraged leases is composed of the following
elements:

December 31 2000 1999
---- ----
(in thousands of dollars)

Net rents receivable....................................... $ 993,573 $ 869,788
Unguaranteed residual valuation............................ 739,879 613,419
Unearned income............................................ (709,250) (633,207)
--------- ---------
Investment in leveraged leases............................. 1,024,202 850,000
Deferred taxes arising from
leveraged leases (1) ..................................... (638,788) (525,501)
--------- ---------
Net investment in leveraged leases......................... $ 385,414 $ 324,499
========= =========

(1) Includes amounts reclassified to subordinated debt.

Following is a summary of the components of income from leveraged leases:

Years Ended December 31 2000 1999 1998
---- ---- ----
(in thousands of dollars)

Pretax leveraged lease income............... $ 34,636 $ 33,826 $ 19,212
Income tax (expense) benefit................ (806) 2,372 14,186
------- ------- -------
Net income from leveraged leases........... $ 33,830 $ 36,198 $ 33,398
======= ======= =======

Leveraged lease assets acquired by the Company are financed primarily through
nonrecourse loans from third-party debt participants. These loans are secured by
the lessee's rental obligations and the leased property. Net rents receivable
represent gross rents less the principal and interest on the nonrecourse debt
obligations. Unguaranteed residual values are principally based on independent
appraisals of the values of leased assets remaining at the expiration of the
lease.

Leveraged lease investments are related to the following:

Term
Equipment Type (years) Total Investment Proportion
-------------- ------- ---------------- ----------
Commercial real estate up to 25 $ 316,417 30.9%
Commercial aircraft 22 to 25 302,457 29.5%
Railcars and rail and bus facilities 32 to 44 267,274 26.1%
Postal equipment 14 to 21 89,136 8.7%
Telecommunications 14 48,918 4.8%
--------- -----
$1,024,202 100.0%
========= =====

Note 5. - Investment in Operating Leases, Net

The Company is the lessor of various types of equipment under operating leases
including data processing, transportation and production equipment.

Minimum future rental payments to be received in each of the next five years
under non-cancelable operating leases are $1.6 million in 2001, $1.0 million in
2002, $0.9 million in 2003, $0.8 million in 2004, $0.7 million in 2005 and $2.0
million thereafter.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 6. - Allowance for Credit Losses

The following is a summary of the Company's allowance for credit losses:

December 31 2000 1999 1998
---- ---- ----
(in thousands of dollars)

Beginning balance.......................... $ 80,655 $ 115,233 $ 116,588
Additions charged to
discontinued operations.................. - 9,300 29,324
Additions charged to continuing operations. 55,787 41,917 36,080
Amounts written-off:
Internal Financing....................... (50,674) (37,941) (25,234)
Capital Services:
Large-ticket........................... (112) 86 (490)
Small-ticket........................... (11,527) (47,940) (41,035)
------- ------- -------
Total write-offs........................... (62,313) (85,795) (66,759)
------- ------- -------
Ending balance............................. $ 74,129 $ 80,655 $ 115,233
======= ======= =======

The increase in the amount of additions charged to continuing operations in 2000
and 1999 is the result of higher investment levels in Internal Financing
programs, including growth experienced in the postage payment products and the
credit card operation prior to its sale in June 2000. The increase in write-offs
related to Internal Financing programs in 2000 is primarily attributable to
growth in the postage payment products and the impact of the credit card
operation prior to its sale.

In establishing the provision for credit losses, the Company utilizes an
asset-based percentage. This percentage varies depending on the nature of the
asset, recent historical experience, vendor recourse, management judgement, and
for Capital Services transactions, the credit ratings assigned by Moody's and
Standard & Poor's. In evaluating the adequacy of reserves, estimates of expected
losses, again by nature of the asset, are utilized. While historical experience
is the principal factor in determining loss percentages, adjustments are also
made for current economic conditions, deviations from historical aging patterns,
seasonal write-off patterns and levels of non-earning assets. If the resulting
evaluation of expected losses differs from the actual aggregate reserve,
adjustments are made to the reserve.

For transactions in the Internal Financing programs, the Company discontinues
income recognition for finance receivables past due over 120 days. The Company
has utilized this period because historically, internal collection efforts have
continued for this time period. In Capital Services programs, income recognition
is discontinued as soon as it is apparent that the obligor will not be making
payments in accordance with lease terms, such as in the event of bankruptcy.
Otherwise, income recognition is discontinued when accounts are past due over 90
days.

Finance receivables are written-off to the allowance for credit losses after
collection efforts are exhausted and the account is deemed uncollectible. For
Capital Services transactions, write-offs are normally made after efforts are
made to repossess the underlying collateral, the repossessed collateral is sold,
and efforts to recover remaining balances are exhausted.

Resumption of income recognition on Internal Financing program non-earning
accounts occurs when payments are reduced to 60 days or less past due. On
Capital Services transactions, resumption of income recognition occurs after the
Company has had sufficient experience on resumption of payments and is satisfied
that such payments will continue in accordance with the original or restructured
contract terms.

The carrying values of non-performing and troubled finance assets are as
follows. There are no leveraged leases classified under these categories.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 6. - Allowance for Credit Losses (continued)

December 31 2000 1999 1998
---- ---- ----
(in thousands of dollars)
Non-performing (non-earning) transactions

Internal Financing:...................... $ 32,542 $ 32,423 $ 25,304
Capital Services:
Large-ticket........................... 214 763 1,020
Small-ticket........................... 18,696 17,867 46,311
------- ------- -------
Total...................................... $ 51,452 $ 51,053 $ 72,635
======= ======= =======
Troubled (potential problem) transactions
capital services programs............... $ 6,340 $ 11,469 $ 12,906
======= ======= =======

The decrease in non-performing transactions in 1999 compared to 1998 in Capital
Services small-ticket programs is due to continued resolution and/or write-offs
of certain accounts retained from the sale of CPLC in October 1998. As part of
this sale, the Company retained certain non-performing accounts. These accounts
were placed with a specialized late stage collection group in an effort to
maximize the potential for recovery. The Company believes it has sufficient
reserves remaining to provide for any losses which may result from the final
resolution of the above transactions.

Historically, the Company has not allocated a specific amount of credit loss
reserve to non-performing and troubled transactions. This is due to the
historically low level of write-offs in the Capital Services large-ticket
business and the limited number of transactions with material credit loss
exposure in other areas. As stated previously, the Company adjusts its aggregate
reserve position in comparison to the evaluation of expected losses.

Note 7. - Assets Held for Sale

The Company funded transactions totaling $652.8 million in 2000, $552.1 million
in 1999, and $545.1 million in 1998, relating to assets held for sale.
Transactions with a net book value of $474.4 million in 2000 and $511.6 million
in 1999, were sold for a net gain before taxes of $4.4 million in 2000 and $4.7
million in 1999, which is recorded as part of finance income. Eighty-eight
contracts relating to assets held for sale remain in inventory with a net
carrying value of $363.6 million at December 31, 2000, compared to 65 contracts
with a net carrying value of $342.9 million at December 31, 1999.

Note 8. - Other Assets

December 31 2000 1999
---- ----
(in thousands of dollars)

Billed meter rental receivables ............................ $ 43,234 $ 38,916
Beneficial interest in trust................................ 49,516 5,923
Other receivables........................................... 13,250 25,481
Prepaid expenses and other assets........................... 10,575 5,678
Equipment and leasehold improvements, net of accumulated
depreciation and amortization: 2000-$23,139; 1999-$23,871. 9,017 14,356
Deferred debt placement fees................................ 2,399 2,653
-------- --------

Total other assets......................................... $ 127,991 $ 93,007
======== ========

Billed meter rental receivables represent outstanding meter rental receivables
billed to customers who have opted to have their meter rental charged on their
lease invoice. PBCC remits these charges to PBI upon billing. The increase in
billed meter rental receivables in 2000 from 1999 resulted from a larger
customer base and higher meter rates.

The Company has sold finance assets with limited recourse. In connection with
certain transactions, the Company has retained a beneficial interest in the
assets. The beneficial interest is a subordinated interest in a trust and
represents the present value of the estimated future cash flows.

Equipment and leasehold improvements are stated at cost. Equipment is
depreciated on a straight-line basis over the expected useful life generally
ranging from five to ten years. Leasehold improvements are amortized on a
straight-line basis over the remaining lease terms.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 9. - Relationship with Pitney Bowes Inc. and Related Party Transactions

Business relationships between PBCC and PBI are defined by several agreements
including an Operating Agreement, Finance Agreement and Tax Sharing Agreement.

Operating Agreement - The operating agreement specifies the policies under which
PBI and PBCC conduct transactions. Specific procedures for implementing the
policies are contained in the operating procedures. The operating agreement can
be modified or canceled on a prospective basis by either party upon 90 days
prior written notice.

PBI and PBCC have entered into detailed written operating procedures ("Operating
Procedures") which govern among other things: the terms and prices of equipment
purchases by PBCC for lease to third parties; computation and payment of fees
for referrals and services provided by PBI sales personnel; the Automatic
Approval Program for PBI equipment; buyback allowances; and the handling of
contract terminations, cancellations, trade-ups and trade-ins.

Under the terms of the Operating Procedures, PBCC has the option to request a
buyback from PBI for non-copier equipment subject to a lease which is terminated
or canceled, provided the equipment is available for repossession. Following
such buyback, PBI is responsible for the repossession and disposition of
equipment. The buyback provision sets forth a stipulated amount that is payable
by PBI to PBCC for certain terminated leases; such amount is calculated on the
basis of a declining percentage, based upon the passage of time, of the original
total invoice value to PBCC. The difference between the buyback amount received
from PBI and the remaining value of the lease usually results in a loss that is
charged against the Company's allowance for credit losses.

Finance Agreement - Pursuant to the Amended and Restated Finance Agreement (the
"Finance Agreement") dated June 12, 1995, between PBI and PBCC, PBI has agreed
to retain, directly or indirectly, ownership of the majority of the outstanding
shares of capital stock of the Company having voting power in the election of
directors, to make payments, if necessary, to enable the Company to maintain a
ratio of income available for fixed charges as defined to such fixed charges of
1.25 to 1 as of the end of each fiscal quarter, and to provide or cause to be
provided funds sufficient to make timely payment of any principal, interest or
premium in respect of any of the Company's indebtedness for borrowed money that
has the benefit of the Finance Agreement if the Company is unable to make such
payment.

Under the terms of the Finance Agreement and the Indenture dated as of November
1, 1995 (the "1995 Indenture"), between the Company and Chase Manhattan Bank
(successor to Chemical Bank), as Trustee (the "Trustee"), the Finance Agreement
may not be amended, in any material respect, or terminated while the Company has
any series of debt securities issued under the 1995 Indenture or any series of
other debt outstanding that is, by its express terms, entitled to the provisions
of the Finance Agreement unless at least two nationally recognized statistical
rating agencies that have been rating such series of debt, confirm that their
ratings for such series of debt will not be downgraded as a result or the
holders of at least a majority of the outstanding principal amount of such
series of debt have consented in writing.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 9. - Relationship with Pitney Bowes Inc. and Related Party Transactions
(continued)

Under the Indenture dated as of May 1, 1985 (together with all supplemental
indentures, the "Indenture"), between PBCC and Sun Trust Bank (successor to
Bankers Trust Company, effective December 16, 1996), as Trustee (the "Trustee"),
PBCC agreed it would not waive compliance with, or amend in any material
respect, the Finance Agreement without the consent of the holders of a majority
in principal amount of the outstanding securities of each series of debt
securities issued under the Indenture. In addition, PBI has entered into a
letter agreement with the Trustee pursuant to which it agreed, among other
things, that it would not default under the Finance Agreement nor terminate the
Finance Agreement without the consent of the holders of a majority in principal
amount of the outstanding securities issued under the Indenture.

Tax Sharing Agreement - The Company's taxable results are included in the
consolidated Federal and certain state income tax returns of Pitney Bowes. Under
the Tax Sharing Agreement, dated April 1, 1977, between the Company and Pitney
Bowes (the "Tax Sharing Agreement"), the Company makes payment to Pitney Bowes
for its share of consolidated income taxes, or receives cash equal to the
benefit of tax losses utilized in consolidated returns in exchange for which it
issues non-interest bearing subordinated notes with a maturity one day after all
senior debt is repaid. The Tax Sharing Agreement can be canceled by either PBI
or PBCC upon twelve months written notice.

PBI / PBCC Products - The Company has jointly developed various financing
products with other Pitney Bowes business units. Revenues and expenses for
certain of these products are shared with the applicable Pitney Bowes business
unit.

Lending / Borrowing Arrangements - From time to time, the Company will either
borrow funds from or lend funds to Pitney Bowes and its affiliates at prevailing
interest rates. Loans and Advances to Affiliates totaled $968.4 million and
$362.0 million at December 31, 2000 and 1999, respectively. Borrowings from
Pitney Bowes totaled $378.5 million and $370.0 million at December 31, 2000 and
1999, respectively. Interest income on Loans and Advances to Affiliates was
$51.0 million, $19.2 million and $6.3 million in 2000, 1999 and 1998,
respectively. Interest expense associated with borrowings from Pitney Bowes was
$20.9 million, $20.2 million and $2.7 million in 2000, 1999 and 1998,
respectively.

Together with Pitney Bowes, the Company had unused lines of credit and revolving
credit facilities totaling $1.5 billion at December 31, 2000, largely supporting
its commercial paper borrowings.

Shared Services - Pitney Bowes provides PBCC with certain services, including:
customer service and collections for the Internal Financing lease portfolio,
information technology, employee benefit plans and corporate staff support.
Generally, PBCC reimburses Pitney Bowes for the cost of these services.
Note 10. - Accounts Payable and Accrued Liabilities

December 31 2000 1999
---- ----
(in thousands of dollars)

Advances and deposits from customers................................... $ 147,169 $ 85,997
Accounts payable....................................................... 34,720 41,547
Reserve for loss on discontinued operations............................ 59,069 76,231
Accrued sales and use, property and sundry taxes....................... 27,061 23,762
Accrued interest payable............................................... 26,925 30,665
Due to noteholders..................................................... 16,382 2,635
Accrued salary and benefits payable.................................... 11,190 8,180
Other liabilities...................................................... 15,869 14,344
-------- --------
Total accounts payable and accrued liabilities........................ $ 338,385 $ 283,361
======== ========

Advances and deposits from customers consist mainly of deposits from customers
under the Company's Reserve Account program, which began in April 1999. Due to
noteholders represents the principal due to investors on securitized assets.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 11. - Notes Payable

Short-term notes payable totaled approximately $1.0 billion at both December 31,
2000 and 1999. These notes were issued as commercial paper, loans against bank
lines of credit, or to trust departments of banks and others at rates below the
prevailing prime rate.

The composition of the Company's notes payable is as follows:

December 31 2000 1999
---- ----
(in thousands of dollars)
Senior Notes Payable:

Commercial paper at the weighted average

interest rate of 6.37% (5.55% in 1999)............................... $ 526,300 $ 404,000
Notes payable against bank lines of credit and others at a
weighted average interest rate of 1.36% in 1999...................... - 457,255
Other notes payable at a weighted average interest rate
of 7.51% in 2000 and 7.50% in 1999.................................. 1,649 8,318
Current installment of long-term debt due within one year at
interest rates of 6.78% to 7.23% in 2000
(5.95% to 6.11% in 1999)............................................. 477,000 175,000
--------- ---------
Total senior notes payable due within one year........................ 1,004,949 1,044,573
Senior notes payable due after one year at interest rates of
5.65% to 9.25% in both 2000 and 1999................................ 1,224,819 1,332,000
--------- ---------
Total senior notes payable............................................ 2,229,768 2,376,573
--------- ---------
Notes Payable to Affiliates:

Due within one year at interest rates of 5.38% in 2000 and 5.55% in 1999 119,464 37,000
Due after one year at an interest rate of 5.38% in both 2000 and 1999. 259,000 333,000
--------- ---------
Total notes payable to affiliates..................................... 378,464 370,000
--------- ---------
Subordinated Notes Payable:

Non-interest bearing notes due Pitney Bowes Inc........................ 362,926 299,892
--------- ---------

Total notes payable................................................... $ 2,971,158 $ 3,046,465
========= =========

Interest expense is shown net of interest income earned on loans made to the
Company's parent, Pitney Bowes Inc, and to other affiliates. Total interest
income, including income from loans to Pitney Bowes, was $62.2 million, $36.6
million and $10.0 million in 2000, 1999 and 1998, respectively.

At December 31, 2000, the Company, together with its parent, PBI, had unused
lines of credit and revolving credit facilities totaling $1.5 billion largely
supporting commercial paper borrowings.

Notes payable at December 31, 2000 (excluding commercial paper borrowings)
mature as follows: approximately $598 million in 2001, $239 million in 2002,
$439 million in 2003, $140 million in 2004, $40 million in 2005 and $989 million
thereafter.

Lending Arrangements: Under terms of its senior and subordinated loan
agreements, the Company is required to maintain earnings before taxes and
interest charges at prescribed levels. With respect to such loan agreements,
Pitney Bowes will endeavor to have the Company maintain compliance with such
terms and, under certain loan agreements, is obligated, if necessary, to pay to
the Company amounts sufficient to maintain a prescribed ratio of earnings
available for fixed charges or make approved debt/commercial paper principal,
interest or premium payments in the event that PBCC is unable to. To date, no
such payments have been required to maintain earnings available for fixed charge
coverage or to maintain the Company's contractual liquidity obligations.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 11. - Notes Payable (continued)

PBCC has $425 million of unissued debt securities available at December 31, 2000
from a shelf registration statement filed with the SEC in July 1998. As part of
this shelf registration statement, in August 1999, PBCC established a
medium-term note program for the issuance from time to time of up to $500
million aggregate principal amount of Medium-Term-Notes, Series D, of which $175
million remained available at December 31, 2000.

In December 2000, PBCC issued $100 million of unsecured floating rate notes
maturing in April 2002 and $100 million of unsecured floating rate notes
maturing in June 2004, available under the medium-term note program. These notes
bear interest at floating rates of LIBOR plus 5 basis points and 25 basis
points, respectively, set as of the quarterly interest payment dates. The
proceeds from these notes were used for general corporate purposes, including
the repayment of commercial paper.

In April 2000, certain partnerships controlled by affiliates of PBCC issued a
total of $134 million of Series A and Series B Secured Floating Rate Senior
Notes. The notes are due in 2003 and bear interest at 7.443%. The proceeds from
the notes were used to purchase subordinated debt obligations from PBI ("PBI
Obligations"). The PBI Obligations have a principal amount of $134 million and
bear interest at 8.073% for the first three years and reset in May 2003 and each
third anniversary of the first reset date. The proceeds from the PBI Obligations
were used for general corporate purposes including the repayment of short-term
debt.

In March 2000, PBCC issued $43.3 million of 7.515% Senior Notes maturing 2002
through 2012. The proceeds from these notes were used to pay down commercial
paper.

During August 1999 the Company entered into three interest rate swaps for an
aggregate notional amount of $350 million.

Notional Effective
Amount Through Fixed Rate Floating Rate
$100,000,000 February 2008 8.625% See below
$100,000,000 June 2008 9.250% See below
$150,000,000 September 2009 8.550% See below

The floating rates for each swap are based on six month LIBOR plus a spread,
equal to the difference between the fixed rate of the debt and the fixed rate
for similar debt available at the time the swap agreement was executed. Under
the terms of the swap agreements the Company is the floating rate-payor.

In the fourth quarter of 2000, two of the Company's interest rate swap
agreements, with an aggregate notional amount of $200 million, were amended to
more closely relate to the terms of the Medium-Term Notes they are intended to
hedge.

Notional Effective
Amount Through Fixed Rate Floating Rate
$100,000,000 April 2002 8.90% See below
$100,000,000 June 2004 8.85% See below

The floating rates for each swap are based on six month LIBOR plus a spread,
equal to the difference between the fixed rate of the debt and the fixed rate
for similar debt available at the time the swap agreement was executed. Under
the amended terms of the swap agreements the Company remains the fixed
rate-payor with payments due quarterly. The fixed rate interest payments are due
on a semi-annual basis.

In 2000 and 1999, the Company issued $63.0 million and $14.0 million,
respectively, of non-interest bearing subordinated notes to Pitney Bowes in
exchange for funds equal to tax losses generated by the Company and utilized by
Pitney Bowes in the 1999 and 1998 consolidated tax returns. Any non-interest
bearing subordinated notes payable to Pitney Bowes mature after all senior notes
now outstanding and executed hereafter are paid.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 12. - Business Segment Information

The Company operates in two reportable segments: Internal Financing and Capital
Services. Internal Financing provides marketing support to PBI and includes
financing of mailing, paper handling and shipping equipment and scales. Internal
Financing also includes convenient financing alternatives for the purchase of
postage and other services targeted toward the small business owner. Capital
Services primarily provides large-ticket financing and fee-based programs
covering a broad range of products and other financial services.

In December 2000 Pitney Bowes announced that its board of directors approved a
formal plan to spin off its Office Systems business as an independent,
publicly-traded company. The transaction is expected to be completed by the end
of the third quarter of 2001. Office Systems includes the copier and facsimile
businesses, financing for which, had been included as a component of PBCC's
Internal Financing segment. For the year ended December 31, 2000 operating
results of Office Systems have been segregated and treated as discontinued
operations by PBI. Accordingly, copier and facsimile financing is being reported
as a component of Capital Services. Prior years' information has been
reclassified to conform to current year presentation.

During 2000 the Company changed the way it allocates corporate interest and
expenses to a fully allocated basis. Accordingly, prior year amounts have been
reclassified to a comparable basis. Identifiable assets are those used by the
segment directly in operations and exclude cash and cash equivalents, short-term
investments and general corporate assets.

Segmental revenue and income from continuing operations before income taxes for
the years ended 2000, 1999 and 1998 are presented below. Revenue generated
outside of the United States is not considered material.

Revenue
----------------------------------------
Years Ended December 31 2000 1999 1998
---- ---- ----
(in thousands of dollars)

Internal Financing............................... $ 407,676 $ 383,187 $ 327,371
Capital Services................................. 171,413 193,708 186,916
------- ------- -------
Total revenue............................... $ 579,089 $ 576,895 $ 514,287
======= ======= =======

Income from Continuing
Operations Before Income Taxes
----------------------------------------
Years Ended December 31 2000 1999 1998
---- ---- ----
(in thousands of dollars)
Internal Financing............................... $ 225,333 $ 211,542 $ 183,555
Capital Services................................. 52,857 39,081 61,134
------- ------- -------
Income from continuing operations
before income taxes............................. $ 278,190 $ 250,623 $ 244,689
======= ======= =======

Additional segment information is as follows:

Depreciation and Amortization

---------------------------------
Years Ended December 31 2000 1999 1998
---- ---- ----
(in thousands of dollars)
Internal Financing............................... $ 102 $ 94 $ 16
Capital Services................................. 18,896 31,959 10,024
------- ------ -------
Total depreciation and amortization................ $ 18,998 $ 32,053 $ 10,040
======= ======= =======

Interest Expense, Net

---------------------------------
Years Ended December 31 2000 1999 1998
---- ---- ----
(in thousands of dollars)
Internal Financing............................... $ 58,801 $ 59,570 $ 51,119
Capital Services................................. 56,081 61,640 73,292
------- ------- -------
Consolidated interest expense, net................. $ 114,882 $ 121,210 $ 124,411
======= ======= =======

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 12. - Business Segment Information (continued)

December 31,
-------------------------------
Net investment in financial assets (1): 2000 1999
---- ----
(in thousands of dollars)

Internal Financing............................... $ 2,012,772 $ 2,151,037
Capital Services................................. 2,172,632 1,985,172
-------- --------
Total for reportable segments.................... 4,185,404 4,136,209
Cash............................................. 81,211 132,914
Net assets of discontinued operations............ - 491,763
Other assets..................................... 1,263,271 622,090
-------- --------
Consolidated assets................................ $ 5,529,886 $ 5,382,976
======== ========

(1)Net investment in financial assets, for purposes of this disclosure
includes net finance receivables, investments in leveraged leases,
operating leases and assets held for sale, net of any allowance for
credit losses.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 13. - Derivative Instruments

PBCC's principal objective in holding derivatives is the management of
interest-rate risk. The Company uses various financial instruments, particularly
interest rate swaps to manage these risks. The Company is exclusively an end
user of these instruments and does not engage in any derivatives trading or
market-making activities in the derivative markets.

The major source of the Company's interest rate risk is its exposure to changes
in interest rates as they relate to its notes payable. To manage this exposure,
the Company periodically enters into interest rate swaps. The interest rate
differential to be paid or received is recognized over the life of the
agreements as an adjustment to interest expense.

The aggregate amount of interest rate swaps as of December 31, 2000 categorized
by type, and the related weighted average interest rate paid and received,
assuming current market conditions, is reflected below:

Total
Major Type Notional
of Interest Amount Weighted Average Interest Rates
Rate Swap Hedged Liability (000's) Fixed Variable

Pay fixed Medium-term Notes $200,000 8.88% 6.80% (1)
Pay variable Senior Notes $350,000 8.77% 8.35% (2)

(1) The variable rate is indexed from the three-month LIBOR rate.
(2) The variable rate is indexed from the six-month LIBOR rate

The aggregate notional amount of interest rate swaps as of December 31, 2000
categorized by annual maturity is reflected below:

Pay Pay
(in thousands of dollars) Fixed Variable
2001....................................... $ - $ -
2002....................................... 100,000 -
2003....................................... - -
2004....................................... 100,000 -
2005....................................... - -
Thereafter................................. - 350,000
-------- --------
Notional Amount............................ $ 200,000 $350,000
======== ========

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 13. - Derivative Instruments (continued)

The following is a reconciliation of interest rate swap activity by major type
of swap:

Annual Maturity
--------------------------------
Pay
-------------------
(in thousands of dollars) Fixed Variable Total
----- -------- -----

Balance December 31, 1998................... $ 325,000 $ - $ 325,000
New contracts............................... - 350,000 350,000
Assigned contracts......................... (125,000) - (125,000)
-------- -------- --------

Balance December 31, 1999.................. 200,000 350,000 550,000
New contracts.............................. - - -
Terminated contracts....................... - - -
-------- -------- --------

Balance December 31, 2000................... $ 200,000 $ 350,000 $ 550,000
======== ======== ========

Interest rate swaps are used in the majority of circumstances to either convert
variable rate commercial paper interest payments to fixed rate interest payments
or to convert fixed rate public debt interest payments to variable rate interest
payments.

The impact of interest rate swaps on interest expense and the weighted average
borrowing rate is as follows:

2000 1999 1998
---- ---- ----

Impact of interest rate swaps on interest expense (000's).............. $ 2,619 $ 5,049 $ 4,500
Weighted average borrowing rate excluding interest rate swaps.......... 6.75% 5.45% 5.53%
Weighted average borrowing rate including interest rate swaps.......... 6.86% 5.64% 5.69%

Interest rate swap agreements involve the exchange of fixed rate and variable
rate interest payments based on a notional principal amount and maturity date.

The Company is exposed to credit loss in the event of non-performance by the
counterparties to the interest-rate swap to the extent of the differential
between fixed- and variable-rates; such exposure is considered minimal.

The Company periodically enters into foreign currency contracts for the purpose
of minimizing its risk of loss from fluctuations in exchange rates in connection
with certain intercompany loans and certain sales of receivables with recourse
of foreign currency denominated lease receivables. The Company had no foreign
currency contracts outstanding as of December 31, 2000 and 1999.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 14. - Stockholder's Equity

The following is a reconciliation of stockholder's equity:

Capital Total
Common in Excess Retained Stockholder's
(in thousands of dollars) Stock of Par Earnings Equity
----- ------ -------- ------

Balance December 31, 1998...... $ 46,000 $ 41,725 $1,128,612 $1,216,337
Net income - 1999.............. - - 167,472 167,472
Dividends paid to PBI.......... - - (85,000) (85,000)
-------- -------- -------- --------

Balance December 31, 1999...... 46,000 41,725 1,211,084 1,298,809
-------- -------- -------- --------
Net income - 2000.............. - - 212,431 212,431
Capital contribution from PBI.. - 300,000 - 300,000
Dividends paid to PBI.......... - - (390,600) (390,600)
-------- -------- -------- --------
Balance December 31, 2000...... $ 46,000 $ 341,725 $1,032,915 $1,420,640
======== ======== ======== ========

At December 31, 2000, 10,000 shares of common stock, no-par with a stated value
of $100,000 per share were authorized and 460 shares were issued and outstanding
and amounted to $46.0 million at December 31, 2000 and 1999. All of the
Company's stock is owned by Pitney Bowes.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 15. - Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:

Cash, assets held for sale, accounts payable and senior notes payable within one
year. Due to the short maturity of these instruments, the carrying amounts
approximate fair value.

Investment securities. The fair value of investment securities is estimated
based on quoted market prices, dealer quotes and other estimates.

Loans receivable. The fair value of loans receivable is estimated based on
quoted market prices, dealer quotes or by discounting the future cash flows
using current interest rates at which similar loans would be made to borrowers
with similar credit ratings and similar remaining maturities.

Senior notes payable. The fair value of long-term debt is estimated based on
quoted dealer prices for the same or similar issues.

Interest rate swaps. The fair values of interest rate swaps are obtained from
dealer quotes. These values represent the estimated amount the Company would
receive or pay to terminate the agreements taking into consideration current
interest rates and the creditworthiness of the counterparties.

Transfers of receivables with recourse. The fair value of the recourse liability
represents the estimate of expected future losses. The Company periodically
evaluates the adequacy of reserves and estimates of expected losses; if the
resulting evaluation of expected losses differs from the actual reserve,
adjustments are made to the reserve.

The estimated fair value of the Company's financial instruments is as follows:

December 31 2000 1999
--------------------- ---------------------
(in thousands of dollars) Carrying Fair Carrying Fair
Value Value Value Value

Investment securities $ - $ - $ 683 $ 683
Loans receivable 394,241 405,288 614,712 625,582
Senior notes payable (1,729,039) (1,758,617) (1,531,932) (1,556,808)
Interest rate swaps (422) 10,293 (234) (10,662)
Transfers of receivables
with recourse (33,129) (33,129) (64,662) (64,662)
Financial guarantee contracts - - - (5,800)

(1) Carrying value for loans receivable is net of applicable allowance for credit losses.
(2) Carrying value includes accrued interest and deferred fee income, where applicable.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 16. - Taxes on Income from Continuing Operations

Income from continuing operations before income taxes and the provision for
income taxes were as follows:

Years Ended December 31 2000 1999 1998
---- ---- ----
(in thousands of dollars)
Income from continuing operations

before income taxes...................... $ 278,190 $ 250,623 $ 244,689
======== ======== ========
Provision for income taxes:
Federal:
Current................................. $ (35,621) $ (27,385) $ (7,509)
Deferred................................ 103,199 79,314 67,561
------- ------- -------
Total federal....................... 67,578 51,929 60,052
------- ------- -------
State and local:
Current................................. (6,963) 466 2,495
Deferred................................ 5,144 7,809 7,399
------- ------- -------
Total state and local............... (1,819) 8,275 9,894
------- ------- -------

Total...................................... $ 65,759 $ 60,204 $ 69,946
======= ======= =======

Including discontinued operations, the provision for income taxes consists of
the following:

Years Ended December 31 2000 1999 1998
---- ---- ----
(in thousands of dollars)
Federal.................................... $ 67,578 $ 39,199 $ 76,773
State and local............................ (1,819) 4,800 10,924
------- ------- -------
Total............................... $ 65,759 $ 43,999 $ 87,697
======= ======= =======

Deferred tax liabilities and (assets):

December 31 2000 1999 1998
---- ---- ----
(in thousands of dollars)
Deferred tax liabilities:
Lease revenue and related depreciation.... $ 592,230 $ 526,838 $ 511,172
Deferred tax assets:
Alternative minimum tax

credit carryforwards................... - - (24,266)
------- ------- -------
Total...................................... $ 592,230 $ 526,838 $ 486,906
======= ======= =======

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 16. - Taxes on Income from Continuing Operations (continued)

The reconciliation of the U.S. Federal statutory rate to the Company's effective
income tax rate for continuing operations is as follows:

Years Ended December 31 2000 1999 1998
---- ---- ----
(Percent of pretax income)

U.S. Federal statutory rate................. 35.0% 35.0% 35.0%
State and local income taxes .............. (0.4) 1.6 2.6
Partnership leasing transactions........... (9.0) (9.9) (0.8)
Tax-exempt foreign trade income............ (1.3) (1.6) (1.9)
Tax-exempt finance income ................. (0.6) (0.7) (1.3)
Residual portfolio and

equipment acquisition.................... (0.5) (1.3) (0.6)
Other, net ................................ 0.4 0.9 (4.4)
-------- -------- --------
Effective income tax rate ................. 23.6% 24.0% 28.6%
======== ======== ========

Note 17. - Retirement and Non Pension Post Retirement Benefit Plans

The Company participates in the Pitney Bowes retirement plan which covers the
majority of PBCC employees. The assets of this plan fully fund vested benefits.
Pitney Bowes' plan assumptions for 2000 were 7.5 percent for the discount rate,
4.75 percent for the expected rate of increase in future compensation levels and
9.55 percent for the expected long-term rate of return on plan assets. Plan
assumptions for 1999 were 7.75 percent for the discount rate, 4.25 percent for
the expected rate of increase in future compensation levels and 9.30 percent for
the expected long-term rate of return on plan assets. The Company's pension
expense was $0.4 million in 2000, $0.5million in 1999 and $0.3 million in 1998.

The Company participates in the Pitney Bowes non-pension post-retirement benefit
plan, which provides certain health care and life insurance benefits to eligible
retirees and their dependents. The Company's nonpension post-retirement expense
was $0.4 million in 2000, $0.2 million in 1999 and $0.1 million in 1998.

The Company's share of PBI's assets and liabilities related to such plans are
not readily determinable.

Note 18. - Commitments, Contingencies, Legal and Regulatory Matters

The Company is the lessee under non-cancelable operating leases for office space
and automobiles. Future minimum lease payments under these leases are as
follows: $2.9 million in 2001, $2.4 million in 2002, $2.3 million in 2003, $2.2
million in 2004, $2.2 million in 2005 and $14.2 million thereafter. Rental
expense under operating leases was $1.2 million, $1.8 million and $1.6 million
in 2000, 1999 and 1998, respectively.

At December 31, 2000, the Company had $37.2 million of unfunded commitments to
extend credit to customers in its postage payment programs and none for its
Capital Service programs. The Company evaluates each customer's creditworthiness
on a case-by-case basis. Upon extension of credit, the amount and type of
collateral obtained, if deemed necessary by the Company, are based on
management's credit assessment of the customer. Fees received under the
agreements are recognized over the commitment period. The maximum risk of loss
arises from the possible non-performance of the customer to meet the terms of
the credit agreement. As part of the Company's review of its exposure to risk,
adequate provisions are made for finance assets, which may be uncollectible.

From time to time, the Company is a party to lawsuits that arise in the ordinary
course of its business. These lawsuits may involve litigation by or against the
Company to enforce contractual rights under contracts; lawsuits by or against
the Company relating to equipment, service or payment disputes with customers;
disputes with employees; or other matters. The Company is currently a plaintiff
or a defendant in a number of lawsuits, none of which should have, in the
opinion of management and legal counsel, a material adverse effect on the
Company's financial condition, results of operations or cash flows.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 18. - Commitments, Contingencies and Regulatory Matters (continued)

Pitney Bowes is subject to Federal, state and local laws and regulations related
to the environment, and is currently named as a member of various groups of
potentially responsible parties in administrative or court proceedings. Based on
facts presently known, PBI does not believe that the outcome of any current
proceeding will have a material adverse effect on its financial condition or
results of operations.

In January 2000, the U.S. Postal Services ("USPS") issued a proposed schedule
for the phase out of manually reset electronic meters in the U.S. As of February
1, 2000 new placements of manually reset electronic meters are no longer
permitted. Current users of manually reset electronic meters can continue to use
these meters for the term of their current rental and lease agreements. Leases
or rentals due to expire in the year 2000 can be extended to December 31, 2001.

In August 2000, the USPS also issued a proposal to lease placements of
non-digital, or letterpress, meters as follows: new placements of non-digital
meters with a "timeout" feature that enable the meters to be automatically
disabled, if not reset within a specified time period are no longer permitted
after December 2003; new placements of non-digital meters without the "timeout"
feature are no longer permitted after June 2001.

PBI has submitted comments to the USPS proposed schedules described above. Based
on the proposed schedule, the company believes that the phase out of manually
reset electronic meters will not cause a material adverse financial impact on
the company. PBI is working with the USPS to meet the non-digital meter phase
out schedule and is currently evaluating the potential financial impact on the
company.

As a result of PBI's aggressive efforts to meet the USPS mechanical meter
migration phase out schedule combined with PBI's ongoing and continuing
investment in advanced postage evidencing technologies, mechanical meters
represented less that 1% of PBI's installed U.S. meter base at December 31, 2000
and 1999, respectively. PBI continues to work in close cooperation with the USPS
to convert those mechanical meter customers who have not migrated to digital or
electronic meters.

In May 1995, the USPS publicly announced its concept of its Information Based
Indicia Program (IBIP) for future postage evidencing devices. As initially
stated by the USPS, the purpose of the program was to develop a new standard for
future digital postage evidencing devises which significantly enhance postal
revenue security and support expended USPS value-added services to mailers. The
program would consist of the development of four separate specifications; (i)
the indicium specification: the technical specifications for the indicium to be
printed; (ii) a Postal Security Device specification: the technical
specification for the device that would contain the accounting and security
features of the system; (iii) a Host specification; and (iv) a Vendor
Infrastructure specification.

During the period from May 1995 through December 31, 2000, PBI has submitted
extensive comments to a series of proposed IBIP specifications issued by the
USPS. In March 2000, the USPS issued the latest set of proposed specifications,
entitled "Performance Criteria for Information Based Indicia and Security
Architecture for Open IBI Postage Evidencing Systems" (the IBI Performance
Criteria). PBI has submitted comments to the IBI Performance Criteria. In
September and October 2000, the USPS issued further proposed regulations
regarding postage evidencing systems using Information Based Indicia, titled
"Refunds and Exchanges" and "Production, Distribution and Information Based
Indicia." PBI has submitted comments regarding those proposed regulations.

In March 2000, PBI received approval from the USPS for the commercial launch of
the Internet version of a product which satisfies the proposed IBI Performance
Criteria, ClickStampTM Online.

In June 1999, PBI was served with a Civil Investigative Demand ("CID") from the
Justice Department's Antitrust Division. A CID is a tool used by the Antitrust
Division for gathering information and documents. PBI believes that the Justice
Department may be reviewing PBI's efforts to protect its intellectual property
rights. PBI believes it has complied fully with the antitrust laws and is
cooperating fully with the department's investigation.

In August 1999, the USPS and PBI announced that they had reached an agreement
(USPS Settlement) resolving a lawsuit filed by PBI in 1997. The lawsuit arose
out of a dispute over a 1978 Statement of Understanding authorizing PBI to offer
Postage by Phone(R), its proprietary version of the Computerized Meter Resetting
System. Under the terms of the agreement, PBI received $51.8 million,
representing a portion of the financial benefit that the USPS obtained as a
result of the revised regulations.

PITNEY BOWES CREDIT CORPORATION

Notes to Consolidated Financial Statements

Note 19. - Quarterly Financial Information (Unaudited)

Summarized quarterly financial data for 2000 and 1999 follows (in thousands of
dollars):

Three Months Ended
----------------------------------------------

2000 March 31 June 30 Sept. 30 Dec. 31
---- -------- ------- -------- -------

Total revenue $ 142,106 $ 150,164 $ 142,437 $ 144,382
-------- -------- -------- --------
Expenses:
Selling, general and administrative 31,172 26,873 26,874 26,313
Depreciation and amortization 3,604 4,994 3,451 6,949
Provision for credit losses 16,918 15,387 9,208 14,274
Interest 28,749 31,716 28,303 26,114
Provision for income taxes 16,224 19,822 19,947 9,766
-------- -------- -------- --------
Total expenses 96,667 98,792 87,783 83,416
-------- -------- -------- --------
Net income $ 45,439 $ 51,372 $ 54,654 $ 60,966
======== ======== ======== ========

1999

Total revenue $ 135,124 $ 141,955 $ 140,119 $ 159,697
-------- -------- -------- --------
Expenses:
Selling, general and administrative 25,871 33,511 29,833 33,671
Depreciation and amortization 7,717 7,165 7,427 9,744
Cost of equipment sales - - - 8,206
Provision for credit losses 12,299 7,714 8,030 13,874
Interest 31,780 32,781 26,606 30,043
Provision for income taxes 16,710 17,982 14,783 10,729
-------- -------- -------- --------
Total expenses 94,377 99,153 86,679 106,267
-------- -------- -------- --------
Income from continuing operations 40,747 42,802 53,440 53,430
Discontinued operations (net of taxes
of $2,140, $(19,025), $0 and $680) 3,700 (27,667) - 1,020
-------- -------- -------- --------
Net income $ 44,447 $ 15,135 $ 53,440 $ 54,450
======== ======== ======== ========

PITNEY BOWES CREDIT CORPORATION

Item 9.-- Changes in and disagreements with accountants on accounting and
financial disclosure

None.

PART III

ITEM 10. -- Directors and executive officers of the registrant

Omitted pursuant to General Instruction I2(c).

Item 11. -- executive compensation

Omitted pursuant to General Instruction I2(c).

Item 12.-- security ownership of certain beneficial owners and management

Omitted pursuant to General Instruction I2(c).

Item 13. -- certain relationships and related transactions

Omitted pursuant to General Instruction I2(c).

PITNEY BOWES CREDIT CORPORATION

Part IV

Item 14.-- exhibits, financial statement SCHEDULES and reports on form 8-k

(a) Index of documents filed as part of this report: Page(s)
-------
1. Consolidated financial statements
Included in Part II of this report
Report of independent accountants................................................. 14
Consolidated statements of income and of retained earnings for each of
the three years in the period ended December 31, 2000............................. 15
Consolidated balance sheet at December 31, 2000 and 1999.......................... 16
Consolidated statement of cash flows for each of the three years in
the period ended December 31, 2000................................................ 17
Notes to consolidated financial statements........................................ 18-37
2. Financial statement schedules

Valuation and qualifying accounts and reserves (Schedule II)........................ 43

The additional financial data should be read in conjunction with the
financial statements included in Item 8 to this Form 10-K. Schedules
not included with this additional financial data have been omitted
because they are not applicable or the required information is shown in
the financial statements or notes thereto.

3. Index to Exhibits (numbered in accordance with Item 601 of Regulation S-K)

REG S-K STATE OR INCORPORATION
EXHIBITS DESCRIPTION BY REFERENCE
-------- ------------------------------------------ ----------------------
(3) 1. Certificate of Incorporation, as amended Incorporated by reference to
Exhibit (3.1) to Form 10-K
(No. 01-13497) as filed with
the Commission on March 21, 1996.

2. By-Laws, as amended Incorporated by reference to Exhibit
(3.2) to Form 10 on Registration Statement
(No. 01-13497) as filed with the Commission
on May 1, 1985.

(4) (a) Form of Indenture dated as of May 1, 1985 Incorporated by reference to
between the Company and Bankers Trust Exhibit (4a) to Registration
Company, as Trustee. Statement on Form S-3 (No. 2-97411) as
filed with the Commission on May 1, 1985.

(b) Form of First Supplemental Indenture Incorporated by reference to
dated as of December 1, 1986 between Exhibit (4b) to Registration
the Company and Bankers Trust Company, Statement on Form S-3 (No.
as Trustee. 33-10766) as filed with the Commission on
December 12, 1986.

(c) Form of Second Supplemental Indenture Incorporated by reference to
dated as of February 15, 1989 between Exhibit (4c) to Registration
the Company and Bankers Trust Company, Statement on Form S-3 (No.
as Trustee. 33-27244) as filed with the
Commission on February 24, 1989.

(4) (d) Form of Third Supplemental Indenture Incorporated by reference to
dated as of May 1, 1989 between the Exhibit (1) on Form 8-K
Company and Bankers Trust Company, (No. 0-13497) as filed with
as Trustee. the Commission on May 16, 1989.

PITNEY BOWES CREDIT CORPORATION

3. Index to Exhibits (numbered in accordance with Item 601 of Regulation S-K) [continued]

REG S-K STATE OR INCORPORATION
EXHIBITS DESCRIPTION BY REFERENCE
-------- ------------------------------------------ ----------------------
(4) (e) Letter Agreement between Pitney Bowes Inc. Incorporated by reference to
and Bankers Trust Company, as Trustee. Exhibit (4b) to Registration
Statement on Form S-3 (No.
2-97411) as filed with the
Commission on May 1, 1985.

(f) Indenture dated as of November 1, 1995 Incorporated by reference to
between the Company and Chemical Bank, Exhibit (4a) to Amendment
as Trustee. No.1 to Registration statement
on Form S-3 (No.33-62485) as
filed with the Commission on
November 2, 1995.

(g) Indenture dated as of July 31, 1999 between Incorporated by reference to
Pitney Bowes Credit Corporation and Exhibit 3 to Form 8-K of
Sun Trust Bank, Atlanta, as Trustee. Pitney Bowes Credit Corporation
(No. 0-13497), as filed with the
Commission on September 3, 1999.

(h) Form of Medium Term Note, Series D Incorporated by reference to
(Global Fixed Rate). Exhibit 2.a to Form 8-K of
Pitney Bowes Credit
Corporation (No. 0-13497),
as filed with the Commission
on September 3, 1999.

(i) Form of Medium Term Note, Series D Incorporated by reference to
(Global Floating Rate). Exhibit 2.b to Form 8-K of
Pitney Bowes Credit
Corporation (No. 0-13497),
as filed with the Commission
on September 3, 1999.

(j) Form of Medium Term Note, Series D Incorporated by reference to
(Certificated Fixed Rate). Exhibit 2.c to Form 8-K of
Pitney Bowes Credit
Corporation (No. 0-13497),
as filed with the Commission
on September 3, 1999.

(k) Form of Medium Term Note, Series D Incorporated by reference to
(Certificated Floating Rate). Exhibit 2.d to Form 8-K of
Pitney Bowes Credit
Corporation (No. 0-13497),
as filed with the Commission
on September 3, 1999.
(10) Material Contracts

1. First Amended and Restated Operating Incorporated by reference to
Agreement dated November 6, 1996, Exhibit (i) on Form 10-Q
between the Company and Pitney Bowes Inc. (No. 01-13497) as filed with
the Commission on
November 13, 1996.

PITNEY BOWES CREDIT CORPORATION

3. Index to Exhibits (numbered in accordance with Item 601 of Regulation S-K) [continued]

REG S-K STATE OR INCORPORATION
EXHIBITS DESCRIPTION BY REFERENCE
-------- ------------------------------------------ ----------------------
(10) 2. Tax Sharing Agreement dated April 1, 1977 Incorporated by reference to
between the Company and Pitney Bowes Inc. Exhibit (10.3) to Form 10 as
filed with the Commission
on May 1, 1985.

3. Amended and Restated Finance Agreement, Incorporated by reference to
dated June 12, 1995 between the Company Exhibit (i) on Form 8-K
and Pitney Bowes Inc. (No. 01-13497) as filed with
the Commission on
June 12, 1995.

4. Distribution Agreement dated August 30, Incorporated by reference to
1999, among Pitney Bowes Credit Exhibit 1 to Form 8-K of
Corporation, Salomon Smith Barney Inc., Pitney Bowes Credit
Banc of America Securities LLC, Bear, Corporation (No. 0-13497),
Stearns & Co. Inc. and J. P. Morgan as filed with the Commission
Securities Inc. on September 3, 1999.

5. Form of Underwriting Agreement. Incorporated by reference to
Exhibit 1 to Registration
Statement on Form S-3 of
Pitney Bowes Credit
Corporation (No. 333-59181),
as filed with the Commission
on July 15, 1998.

(12) Computation of ratio of earnings from continuing Exhibit (i)
operations to fixed charges

(21) Subsidiaries of the registrant Exhibit (ii)

(23) Consent of Independent Accountants Exhibit (iii)

(27) Financial Data Schedule Exhibit (iv)

(b) Reports on Form 8-K

None

PITNEY BOWES CREDIT CORPORATION

SIGNATURES

Pursuant to the requirements of the Section 13 or 15 (d) 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 CREDIT CORPORATION

By /s/ MATTHEW S. KISSNER

----------------------
Matthew S. Kissner
President and Chief Executive Officer

Dated: March 30, 2001

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.

By /s/ DAVID KLEINMAN Dated: March 30, 2001
----------------------
David Kleinman
Vice President, Finance and
Chief Administrative Officer
(Principal Financial Officer)

By /s/ MICHAEL C. COSTELLO Dated: March 30, 2001
--------------------------
Michael C. Costello
Controller
(Principal Accounting Officer)

By /s/ MARC C. BRESLAWSKY Dated: March 30, 2001
----------------------
Marc C. Breslawsky
Director

By /s/ MICHAEL J. CRITELLI Dated: March 30, 2001
----------------------
Michael J. Critelli
Director

By /s/ SARA E. MOSS Dated: March 30, 2001
----------------------
Sara E. Moss
Director

By /s/ BRUCE P. NOLOP Dated: March 30, 2001
-------------------------
Bruce P. Nolop
Director

By /s/ JOHN N.D. MOODY Dated: March 30, 2001

----------------------
John N.D. Moody
Director

By /s/ ARLEN F. HENOCK Dated: March 30, 2001
----------------------
Arlen F. Henock
Director

By /s/ DENNIS M. RONEY Dated: March 30, 2001
----------------------
Dennis M. Roney
Director

PITNEY BOWES CREDIT CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1998 TO 2000

Allowance for credit losses (shown on balance sheet as deduction from
net investments)
---------------------------------------------------------------------------------
Additions Additions Deductions -
Balance at charged to charged to uncollectible
beginning costs and discontinued accounts Balance at
of year expenses operations written off (1) end of year
------- -------- ---------- --------------- -----------

2000 $ 80,655 $ 55,787 $ - $ 62,313 $ 74,129

1999 $ 115,233 $ 41,917 $ 9,300 $ 85,795 (2) $ 80,655

1998 $ 116,588 $ 36,080 $ 29,324 $ 66,759 (2) $ 115,233

(1) Principally uncollectible accounts written off.
(2) Amounts include the write-off of finance receivable retained in
connection with the disposal of Colonial Pacific Leasing Corporation
against previously established allowance for credit losses.

PITNEY BOWES CREDIT CORPORATION

Exhibit (i)

Computation of Ratio of Earnings from Continuing Operations to Fixed Charges
(in thousands of dollars)

Years Ended December 31,
-------------------------------------------------------------------
2000 1999 1998(2) 1997(2) 1996(2)
---- ---- ---- ---- ----

Income from continuing operations

before income taxes............... $ 278,190 $ 250,623 $ 244,689 $ 222,443 $ 222,463
------- ------- -------- ------- -------

Fixed charges:
Interest on debt.................. 114,882 121,210 124,411 154,634 163,860
One-third of rent expense......... 385 585 520 1,107 1,149
------- ------- -------- -------- -------
Total fixed charges................. 115,267 121,795 124,931 155,741 165,009
------- ------- -------- -------- -------

Earnings from continuing

operations before fixed charges... $ 393,457 $ 372,418 $ 369,620 $ 378,184 $ 387,472
======= ======= ======== ======== =======

Ratio of earnings from continuing
operations to fixed charges (1)... 3.41X 3.06X 2.96X 2.43X 2.35X
======= ======= ======== ======== =======

(1) The ratio of earnings from continuing operations to fixed charges is
computed by dividing earnings from continuing operations before fixed
charges by fixed charges. Fixed charges consist of interest on debt and
one-third of rent expense as representative of the interest portion.

(2) Amounts reclassified to reflect CPLC and AMIC as discontinued operations.
Interest expense and the portion of rents representative of the interest
factor of these discontinued operations have been excluded from fixed
charges in the computation.

Including these amounts in fixed changes, the ratio of earnings to fixed
charges would be 3.41, 2.96, 2.50, 2.09 and 2.08 times for the years ended
December 31, 2000, 1999, 1998, 1997 and 1996, respectively.

PITNEY BOWES CREDIT CORPORATION

Exhibit (ii)

Subsidiaries of the Registrant

The Registrant, Pitney Bowes Credit Corporation, a Delaware corporation, is a
subsidiary of Pitney Bowes Inc.

The following are subsidiaries of the Registrant as of December 31, 2000:

Country or State
Company Name of Incorporation

Waterview Resolution Corporation Massachusetts
CPLC Inc. Delaware
FSL Holdings Inc. Connecticut
FSL Risk Managers Inc. (Subsidiary of FSL Holdings Inc.) New York
PB CFSC I Inc. US Virgin Islands
PB Funding Corporation Delaware
PB Global Holdings Inc. Connecticut
PBA Foreign Sales Corporation (Subsidiary of PB Global Holdings Inc.) Barbados
PB Global Holdings II Inc. Connecticut
Tower FSC Ltd. (Subsidiary of PB Global Holdings II Inc.) Bermuda
PB Global Holdings III Inc. Connecticut
PB Nikko FSC Ltd. (Subsidiary of PB Global Holdings III Inc.) Bermuda
PB Global Holdings IV Inc. Connecticut
PB Nihon FSC Ltd. (Subsidiary of PB Global Holdings IV Inc.) Bermuda
PB Leasing Services Inc. Nevada
The Pitney Bowes Bank, Inc. Utah
Pitney Bowes Insurance Agency, Inc. Connecticut
PB Public Finance Inc. Delaware
Pitney Structured Funding I Inc. Delaware
PB Municipal Funding Inc. (Subsidiary of PBCC) Nevada
PB Miles Inc. Delaware
PB Lease Holdings Inc. (Subsidiary of PBCC) Nevada
PB Air Inc. (Subsidiary of PBCC) Nevada
PB Equipment Management Inc. (Subsidiary of PBCC) Delaware
Pitney B2B Capital.com Inc. (Subsidiary of PBCC) Delaware
Harlow Aircraft Inc. Delaware
PREFCO Twelve Holdings Inc. (Subsidiary of Harlow Aircraft Inc.) Delaware
Pitney Bowes Real Estate Financing Corporation ("PREFCO") Delaware
PB/PREFCO Real Estate Holdings Inc. (Subsidiary of PREFCO) Delaware
PREFCO I LP Inc (Subsidiary of PREFCO) Delaware
PREFCO II Inc. (Subsidiary of PREFCO) Delaware
PREFCO II SPE Inc. (Subsidiary of PREFCO) Delaware
PREFCO III LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO IV LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO V LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO VI Inc. (Subsidiary of PREFCO) Delaware
PREFCO VI LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO VII Inc. (Subsidiary of PREFCO) Delaware
PREFCO VII LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO VIII LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO IX LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XI LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XII LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XIII Inc. (Subsidiary of PREFCO) Delaware
PREFCO XIII LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XIV LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XV LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XVI Inc. (Subsidiary of PREFCO) Delaware
PREFCO - Dayton Community
Urban Redevelopment Corporation (Subsidiary of PREFCO XVI Inc.) Ohio
PREFCO XVI LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XVII Inc. (Subsidiary of PREFCO) Delaware
PREFCO XVII LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XVIII LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XIX LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XXI Inc. (Subsidiary of PREFCO) Delaware
PREFCO XXI LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XXII Inc. (Subsidiary of PREFCO) Delaware
PREFCO XXII LP Inc. (Subsidiary of PREFCO) Delaware
PREFCO XXIV Inc. (Subsidiary of PREFCO) Delaware

PITNEY BOWES CREDIT CORPORATION

Exhibit (iii)

Consent of Independent Accountants

We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 (No. 333-59181) of Pitney Bowes Credit Corporation of our
report dated January 22, 2001 relating to the financial statements and financial
statement schedule, which appears in this Form 10-K.

PricewaterhouseCoopers LLP

Stamford, Connecticut
March 30, 2001