Good morning and welcome to the Pitney Bowes First Quarter 2013 results conference call. Your lines have been placed in a listen-only mode during the conference until the question-and-answer segment. Today’s call is also being recorded. If you have any objections, please disconnect your lines at this time. I would now like to introduce you to your speakers for today’s conference call, Mr. Marc Lautenbach, President and Chief Executive Officer; Mr. Michael Monahan, Executive Vice President and Chief Financial Officer; and Mr. Charles McBride, Vice President, Investor Relations. Mr. McBride will now begin the call with a Safe Harbor overview.

Thank you and good morning. Included in this presentation are forward-looking statements about our expected future business and financial performance. Forward-looking statements involve risks and uncertainties that could cause actual results to be materially different from our projections. More information about these risks and uncertainties can be found in our 2012 Form 10-K annual report and other reports filed with the SEC that are located on our website at www.pb.com, and by clicking on Investor Relations. Please keep in mind that we do not undertake any obligation to update any forward-looking statements as a result of new information or developments. Also, for non-GAAP measures used in the press release or discussed in this presentation, you can find reconciliations to the appropriate GAAP measures in the tables attached to our press release and also on our Investor Relations website. Additionally, we have provided slides that summarize most of the points we will discuss during this call. These slides can also be found on our Investor Relations website. Now our President and Chief Executive Officer, Marc Lautenbach, will start with a few opening remarks. Marc?

Thanks, Charlie. Good morning. Thanks to all of you for joining this discussion of our first quarter results. As I indicated last quarter, since joining the company, I have actively reached out to clients, shareholders, and employees. I wanted to gain their perspectives on where we are as a company, what we are capable of, and importantly, where we have opportunities. I have also worked with our senior management team to conduct a thorough review of the business. As we combined our in depth analysis with the insights from our stakeholders, what emerged to me was a picture of how Pitney Bowes can deliver value on a sustained basis. We have identified actions and developed plans focused on improving revenues, managing costs and improving working capital. I know that one of the fundamentals necessary to transform our business to deliver more value is to create a culture focused disciplined execution. That was why that in my first hundred days, we have gone beyond the planning phase to start taking important actions that enhance the conditions for successful execution going forward. It's not lost at me or any of my colleagues that the company needs to move forward with a greater sense of urgency than in the past. We have taken several very important steps, including announcement of a number of new management appointments, moves to strengthen our balance sheet and increase our financial flexibility and reposition our business portfolio by exiting non-strategic businesses. Today we announced another action designed to unlock the value of the company. In order to provide financial flexibility to invest in what I believe to be compelling opportunities. And to enhance our capital structure, the Board of Directors has reduced the dividend on our common stock to 18.75 cents per share. As I described on our…

Thank you, Marc. This morning we reported results for the first quarter of 2013. As Mark indicated, during the quarter we had revenue growth in two of our business segments and flat revenue in the third. I’ll discuss the trends in the business in more detail as I take you through the results of each of the business segments. For the first quarter, revenue totaled $1.2 billion, a decline of 4% compared to the prior year on both the reported and constant currency basis. Revenue benefited from growth in our Production Mail and Mail Services businesses. Revenue in International Mailing was flat compared with the prior year. In addition, we continue to experience a moderation in the decline of recurring revenue streams in the SMB group. Revenue was adversely impacted by weakness in our Software segment, pricing pressures in Management Services segment, and to a lesser extent by the decline in the Marketing Services segment. As I indicated when we provided guidance at the beginning of the year, we anticipated the first half of the year would be weaker than the second half as we continue to invest in our growth initiatives and start to realize more of the benefits of those investments in the second half of the year. Additionally, we expect that the decline in recurring revenue streams in Mailing will be less of a headwind in the second half of the year. Adjusted earnings per share from continuing operations for the quarter were $0.42 compared with $0.52 per share in the first quarter of 2012, which excludes an $0.11 per share tax benefit related to favorable tax settlements in 2012. GAAP earnings per diluted share from continuing operations for the first quarter was $0.34. GAAP EPS from continuing operations included a charge of $0.08 per share for…

(Operator Instructions) And our first question will come from Shannon Cross with Cross Research. Please go ahead. Shannon Cross – Cross Research: I guess my first question is, can you just give us a little more color on what's going on within software because obviously the pressure there was substantial, and Mark, I would like to know your thoughts, especially given your background in terms of how you expect that division to sort of improve and how much of this obviously is economic versus maybe some holes in the portfolio. Just any color you can give there would be helpful, and then I have another one.

Thanks, Shannon. And we will give more color on this on Friday, but let me start with a little bit of context. First of all, you know our business well and you understand that some of our most important digital opportunities are outside of the software business currently, whether it be our initiative around Volly or our shipping initiative around eBay. So I think that’s important context because I do think that the digital opportunities are important growth opportunities for us going forward. My analysis of the software business is as follows. First of all, I do believe we have got good technologies. I don’t think we have made the level of investments that we need to in all of those products, but in general I would characterize our products as good, if not leading edge. But there is more opportunities we can do to differentiate ourselves there. As I digest the first quarter results, my bottom line on software is it was around sales execution. And I am confident that the new leader will make a difference. Certainly it's going to take him a while to sort through the things that need to get done. But I think he has very relevant experience in terms of putting together disparate businesses into a level of coherency that will allow us to move forward, and very importantly has very strong sales credentials. Shannon Cross – Cross Research: Okay. Great. And then, could you talk a bit about, in SMB obviously you are expecting a -- how I say this -- diminishment of the pressure from the recurring revenue declines as we go through the year. But can you talk about what you are seeing on from an end-user demand standpoint? And I am interested in the fact that you mentioned that the pressure on EBIT came somewhat from higher equipment sales versus lease push outs. So, what are your customers telling you in terms of their interest and how much are some of the online services that you are now providing for SMB, sort of helping to make the discussion easier?

Yeah Shannon, it’s Mike. A couple of things to your questions. One, on the lease extension versus new equipment sales, that’s been a very deliberate program on our part to place more new equipment, and as you know, that has somewhat less of a positive margin impact, still very good margin, but less than a lease extension because there’s a new piece of equipment involved, but we believe that that presents us more opportunity to build recurring revenue streams over time, particularly when you get into products like Connect+ that has color ink opportunities and greater ink usage opportunities as well as other applications that we can deliver to the customer. So, we believe and have been shifting to a greater focus on new equipment placements. We saw the positive impact of that particularly in the international segment as well. In terms of other digital products, we are seeing a base of customers grow at the low end, where we’ve integrated our low-end meter with digital postage applications. And so that will build a recurring stream over time. It’s part of the reason why we anticipate continued improvement in the recurring revenue streams as we go forward. Part of it is really the rollover of the lease space as well as the addition of some of these other opportunities to grow recurring revenue streams. Shannon Cross – Cross Research: And then just my last question because I would be remiss if I don’t ask. In the release you don’t mention share repurchase. Is that something that’s still on the table, and I don’t want to steal the thunder from Friday, but I’m just curious as to how you’re thinking about a restart of that program.

Shannon, it is on the table. It is one of the tools that we have at our disposal to drive shareholder value. So we will use it opportunistically going forward.

We’ll go to the line of Ananda Baruah with Brean Capital. Please go ahead.

Yeah, good question. In terms of the revenue for the first quarter I would say if there was something that was outside of our expectations it was the software performance and Marc talked to what we would do to address that. As we look forward in terms of revenue drivers, we have a handful of growth initiatives that we have been investing in. E-commerce is one and we’re beginning to see some benefits from the early stages of that. We have the print outsourcing and document management solutions in PBMS that we have been investing in. We noted some additional revenue from Volly licensing revenue related to Australia. The fact that we expect recurring revenue streams to continue to moderate in the mailing business will be a contributor as well. And as we noted, Production Mail continues to have a strong backlog and that should contribute to revenue as we go out in the year. So those are the things we’re looking towards as we look at our overall guidance.

And Mike, how much do the incremental cost savings opportunities play into the guidance at this point?

We talked about at the beginning of the year, actually at our fourth quarter earnings announcement some initial actions we were taking. I think you’re beginning to see the benefits of those in terms of our first quarter performance, where SG&A was down about 7% year over year. We’ll continue to take a disciplined approach to implementing those types of actions and we’re continuing to look at that and we will talk more about that on Friday.

And I guess just based on -- it sounds like the core business, I mean sort of that you’re seeing the same trends in the core business and in the recurring revenue streams beginning to continue to improve. Is it really just a matter of getting some of these new initiatives that kind of hit stride and catch? – Do you expect some of that, I guess it is sort of like an ongoing confluence of things, but can we expect revenue growth to turn positive potentially in the September quarter? I feel like that probably needs to happen to really kind of get you within earshot of some of the revenue growth guidance range?

Yeah, obviously we don’t give quarterly guidance, but for the full-year, at the flat to plus 3%, it would suggest that we are going to have to have some positive quarters out in the year.

Got it. And just last one from me guys. The cash flow, can you just talk about the levers on the cash flow for the quarter. I guess it's a little bit light relative to my model. You obviously don’t give quarterly guidance there. Since the full cash flow statement isn’t out yet, if you can just sort of talk about the moving parts there I think that would be useful. Thanks.

Sure. I think just to boil it down quite simply, if I compare it to prior year, virtually all of the difference is related to the fact that we received about $70 million of tax refunds last year related to some of the tax settlement items that we had. That’s the bulk of the difference on a year-over-year basis. Obviously, earnings were a little bit lower but our working capital performance was better, so those sort of offset one another. So that’s why we are comfortable reaffirming our guidance for the full year.

Got it. So other than that, you are still right where you expected to be?

That’s correct.

And our next question comes from Blaine Marder with Loeb Capital Management. Please go ahead. Blaine Marder – Loeb Capital Management: First a quick question for you Mike on the software. You guys stated both sales execution issues but also a delay in some deal signings. The signings that were delayed, would you expect those to close in the second quarter?

That’s an area of focus for the new management and that’s absolutely what we are driving for. Blaine Marder – Loeb Capital Management: Okay. And then, I guess, Marc, longer term and perhaps you would address this on Friday, but if you look across the enterprise business, there is a lot of revenues but the dollars on the margin side are just very, very low when compared to the revenue base. And I know you are doing a fair amount of investing and that’s even more so in the first half. But ultimately, I mean where you are headed in terms of what businesses we want to be in on this side of the business and what sort of margin profile we might expect and hopefully it would be certainly higher than today.

Yeah, I mean in general we are inclined to invest in areas which we think are accretive to the overall model. So read that as software. If businesses have lower margins than the portfolio, than they are going to have a very hard time competing for capital internally. So we are all about value creation. You do that where you have got differentiation, where you can drive value for your clients, and that’s where we will make investments.

And our next question will be from Chris Whitmore with Deutsche Bank. Please go ahead.

Marc, I wanted to ask your initial thoughts about the company's cost structure. And here is the aspect on which I am asking. A former employer has spent about 20% of revenue on SG&A, Pitney Bowes has got to spending north of 32% of revenue on SG&A. Is there an opportunity for a structural transformation of Pitney operating cost structure or it's something in the high-end of low 30 what you would view as a sustainable level of spend? Ongoing overall spend.

I think there is important opportunities to improve our routes to market. If you look at the company's, Pitney Bowes primary route to market, it's around a face-to-face sales force. We have not utilized alternative channels which other industries and companies have used extensively to reach the marketplace. Things like tele, things like the web. And I think those are important opportunities for us to not only fundamentally recast our SG&A, but importantly it's a great opportunity to provide better client service. So it's one of those great paradoxes where you have an opportunity to not only fundamentally shift your cost structure, your expense structure in this case, but to provide better client service. And to your point about my former employer, we are benchmarking ourselves inside of Pitney Bowes not just against others in our industry for SG&A, but others that serve the SMB market place whether it be SG&A, DSO or inventory. So we’re trying to find best of class providers that serve the SMB marketplace or the software market or whatever market that we’re pursuing and benchmarking ourselves. And that’s how we’re thinking about driving the opportunities going forward. So I think your question is right on point, right where we discussed. As Mike indicated, you’ve already started to see the SG&A come down. I would point out that this was preceding me, but if you look at the rolling forward quarter average that’s been coming down for a bit. But I do think there are substantial opportunities to recapture SG&A and by the way, to the leadership changes that Mark Shearer, who recently joined our company, came from IBM, ran a business that was very oriented towards SMB and understands intimately how to use these new channels.

And to follow up, are there any sacred channels within your organization? In other words, are you looking at perhaps legacy cost structures and legacy businesses and considering the portfolio from a top to bottom standpoint in terms of potential asset sales, this investment et cetera going forward and I wanted to ask specifically around Volly. Do you think there’s a return at the end of this investment cycle with that product? Thanks.

The only sacred cow in my mind is our client and our shareholders. Everything that we do will be oriented towards driving value to those two means. There are no sacred businesses. What I’ve said before is in order for businesses to continue to be part of the portfolio; they need to meet three conditions. First is they need to be strategically coherent. Second, they need to be a leader within their respective markets. And third, they need to earn a return that is acceptable to the overall business. In terms of your specific question about Volly, I would begin by pointing out that we have made progress, continue to make progress with Australia Post. It is one and I stress that’s clearly one of our growth opportunities and it will compete for capital along with every other initiative. It is not sacred. It is all about to provide value for our clients and provide value for our shareholders. It’s the great advantage of coming in without any particular interest or agenda.

Last one for me, I wanted to ask a little bit more about the U.S mailing business. It looks like North American equipment sales were down somewhere in the range of 5% plus or minus in the quarter despite a shift towards less lease extension, more equipment purchasing. I wanted to get some color around North American equipment business. How do you expect that to play out over the next few quarters? Do you think North American equipment can return to growth or do you think it can grow this year and how does the lease cycle look? Thanks a lot.

In terms of the -- I’ll start with the last piece. The lease cycle I think is consistent with what we’ve seen over the last several quarters. So we don’t see any unusual changes there in what’s available coming through at the end of the leases. Equipment sales were down a bit in the first quarter in North American mailing. We did have a couple of marketing program changes late in the quarter that probably had some impact. So we anticipate some improvement as we go forward, but it would be a quarter by quarter review.

And our next question comes from Scott Wipperman with Goldman Sachs. Please go ahead.

I realize you may tackle this on Friday, but I'll give it a shot. On the dividend cut and the expected savings you guys are going to generate, do you have an outline or something you can share with us maybe about how much you expect to allocate to investment versus M&A or improving the balance sheet?

Yeah. In terms of the dividend change it’s about $150 million of capital that we will have available. We don’t have a specific formula for allocating capital. It would really be based on the specific opportunities in the business for organic investment. We look at acquisition or inorganic investments as something that as Marc described it really has to add value to the overall portfolio. And then we will talk on Friday about the balance sheet and our ongoing focus on making sure that we maintain investment grade ratios around the business. So all right, it will be a balanced approach that will continue to provide us flexibility for investment in the business but we don’t have the specific formula on how we will apply that.

Got it, okay. And then maybe just on the international mail, is there more markets that you guys expect to launch Connect+ in outside of Germany and France, that we have seen some of the benefit from.

Yeah, we are in most of the major, the largest markets with Connect+. One market that we do see some opportunity in, we don’t have the product approved there yet, is in Brazil. But beyond that we are in the major markets that we would expect to see significant benefit from Connect+.

We will go the line of Glen Mattson with Sidoti & Company. Please go ahead. Glen Mattson - Sidoti & Company: The software business, you stated two reasons for the weakness. The deferred license deals and also that Europe was weak. So I was curious if there was equal parts of both or what the magnitude of each was. And also that, you mentioned that maybe you haven’t made as much investment in the software business as needed. You see yourselves doing acquisitions in that space or is it more just investment in the current products.

Yeah, in terms of the impact on revenue, there wasn’t a significant difference between the deferred deals and in Europe in particular, we have a fairly good sized business with government agencies where they use our technology around asset management and that. So that’s where, obviously, the weak economic environment has impacted that. We continue to invest in the products in the software business. As Marc noted, there are some areas where we may reallocate that investment where we see particular opportunity, and we will talk a little bit more about that on Friday where we see strong opportunities in software space.

Yeah, let me just add a little bit color on that particular point. You know as go through the portfolio, we will invest in places where we have a path to lead our ship. That means that if we don’t have leadership today, we can with pretty clear start and the invisibility, make the necessary investments to get there. If we don’t see that, than we will reallocate those dollars, those investments to places where we do. So it's just a very logical approach to the portfolio. So we are very focused on places where we can really drive differentiated value for our clients and for our shareholders ultimately. Glen Mattson - Sidoti & Company: Okay, thanks. Maybe there will be some more on that on Friday. And, Volly, I guess are we still looking at 2013 launch, I guess for U.S.?

Well, I would say, yes. That said, we are continuing to work on the right business model to ensure that what we do actually is accretive to our shareholders. Drives the kind of value for our clients that we can't, as I said there are no sacred cows going forward. We are fine tuning the business models. I fully expect that Volly will have a different business model in different countries. And we will continue to work through that.

(Operator Instructions) We have a follow up from the line of Ananda Baruah with Brean Capital.

This is certainly going to be a topic at the analyst day that I am going to ask about but I want to sort of take a cut at it now. How should we view sort of the context of what's been, to this point, a pretty firm commitment to sort of investment grade rating, I suppose. Now that there is, sounds like there is this commitment to revenue growth as well. If you guys find yourselves sort of, I appreciate, Marc, your comments around sort of [fighting] for capital. I guess, to what extent is the balance you have to fight for capital going forward when we sort of think about commitment to investment grade rating relative to, what sounds like your commitment to growth initiatives?

We have a commitment to investment grade ratios and we consider the balance sheet a very important tool to not only finance our business but to provide us the flexibility going forward. So the notion of having investment grade ratios continues to be a cornerstone of our corporate financial strategy.

And I guess I'll sneak one more in. Just on e-commerce, can you talk about I guess what you guys see as being the opportunity there away from eBay as you move forward here? Is it a situation where you think you're going to have, I don't know, maybe a handful of key e-commerce partners? Or do you think that this is really a broader, a much broader market opportunity for you guys going forward?

We are going to feature this on Friday. We’re bringing Craig Reed in who runs the business to actually be one of the presenters. So on that particular question I think we can defer it to Friday. But suffice it to say we see the opportunity as much broader than just eBay. The technologies that are underneath the set of capabilities have broad applicability and solve a really important problem for any company that does cross-border shipping.

We have no further questions.

All right, thank you all and we’ll see you on Friday.