PITNEY BOWES INC. EXHIBIT (ii) ------------ COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES(1) (Dollars in thousands) Years Ended December 31, --------------------------------------------------------------------- 1997 1996 1995 1994 1993(2) ---------- -------- -------- -------- --------- Income from continuing operations before income taxes..................... $ 803,098 $684,383 $618,931 $566,507 $498,860 Add: Interest expense................. 209,194 203,877 226,110 194,115 189,292 Portion of rents representative of the interest factor............. 39,404 40,538 42,064 42,339 33,842 Amortization of capitalized interest............ 973 914 914 914 914 Minority interest in the income of subsidiary with fixed charges................... 11,322 8,121 5,013 - - ---------- -------- -------- -------- -------- Income as adjusted................ $1,063,991 $937,833 $893,032 $803,875 $722,908 ========== ======== ======== ======== ======== Fixed charges: Interest expense................ $ 209,194 $203,877 $226,110 $194,115 $189,292 Capitalized interest............. - 1,201 2,178 733 - Portion of rents representative of the interest factor............. 39,404 40,538 42,064 42,339 33,842 Minority interest, excluding taxes, in the income of subsidiary with fixed charges................... 17,285 11,838 7,607 - - ---------- -------- -------- -------- -------- $ 265,883 $257,454 $277,959 $237,187 $223,134 ========== ======== ======== ======== ======== Ratio of earnings to fixed charges.................... 4.00 3.64 3.21 3.39 3.24 ========== ======== ======== ======== ======== Ratio of earnings to fixed charges excluding minority interest......................... 4.23 3.79 3.28 3.39 3.24 ========== ======== ======== ======== ======== (1) 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. (2) Reclassified to reflect discontinued operations.