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

                                       OR

          |_| 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


<PAGE>


<TABLE>


                         PITNEY BOWES CREDIT CORPORATION

            Part I

<S>              <C>                                                                                      <C>
                 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

</TABLE>

<PAGE>





                         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


<PAGE>



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.


<PAGE>


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.

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.  PBI  expects  to  complete  the
transaction by the end of the third quarter of 2001. Office Systems includes the
copier and  facsimile  businesses.  Accordingly,  PBCC and Pitney  Bowes  Office
Systems  expect to enter  into a new  operating  agreement  under  which it will
operate  after the  spin-off.  It is  anticipated  that this  agreement  will be
completed prior to the spin-off.

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.


<PAGE>



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.


<PAGE>


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.


<PAGE>


                         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.
<TABLE>

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

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

<S>                                                     <C>            <C>            <C>            <C>             <C>
       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)

</TABLE>

<PAGE>



                         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.


<PAGE>


                         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.
<TABLE>

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

<S>                                                                   <C>              <C>               <C>
  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
                                                                        ========         ========          ========
</TABLE>

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.



<PAGE>



                         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.


<PAGE>


                         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.


<PAGE>


                         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.


<PAGE>


                         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


<PAGE>


                         PITNEY BOWES CREDIT CORPORATION

                        CONSOLIDATED STATEMENTS OF INCOME

                            (in thousands of dollars)
<TABLE>

         Years Ended December 31                                                  2000              1999             1998
                                                                                  ----              ----             ----
         Revenue:
<S>                                                                        <C>               <C>              <C>
           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
                                                                              ========          ========         ========

</TABLE>

         [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.


<PAGE>


                         PITNEY BOWES CREDIT CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                            (in thousands of dollars)
<TABLE>

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

<S>                                                                             <C>             <C>
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
                                                                                  =========        =========

</TABLE>




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


<PAGE>


                         PITNEY BOWES CREDIT CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                            (in thousands of dollars)
<TABLE>

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

<S>                                                                      <C>            <C>            <C>
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)
                                                                           =========      =========       ========
</TABLE>


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.


<PAGE>


                         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.


<PAGE>



                         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):

<TABLE>

<S>                                                        <C>            <C>           <C>
                                                                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
                                                              =======        =======        =======

</TABLE>

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.


<PAGE>


                         PITNEY BOWES CREDIT CORPORATION

                   Notes to Consolidated Financial Statements

Note 3. - Finance Assets

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

           December 31                                                            2000           1999
                                                                                  ----           ----
           (in thousands of dollars)
<S>                                                                      <C>              <C>
            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
                                                                             =========      =========
</TABLE>

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.

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.

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

<TABLE>
                                                  Gross Finance Assets
                             -----------------------------------------------------------

                             Internal Financing       Capital Services            Total

<S>      <C>                    <C>                    <C>                   <C>
         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
                                  =========               ========             =========
</TABLE>

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.


<PAGE>


                         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:
<TABLE>

           December 31                                                            2000           1999
                                                                                  ----           ----
            (in thousands of dollars)
<S>                                                                        <C>            <C>
            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
                                                                             =========      =========

</TABLE>


 (1) Includes amounts reclassified to subordinated debt.

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

           Years Ended December 31                                 2000           1999           1998
                                                                   ----           ----           ----
           (in thousands of dollars)
<S>                                                           <C>             <C>            <C>
           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
                                                                =======        =======        =======
</TABLE>

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:
<TABLE>

<S>        <C>                                   <C>          <C>                        <C>
                                                 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%
                                                                   =========                 =====
</TABLE>

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.

<PAGE>


                         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:
<TABLE>

           December 31                                             2000           1999           1998
                                                                   ----           ----           ----
           (in thousands of dollars)
<S>                                                            <C>           <C>            <C>
            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
                                                                =======        =======        =======
</TABLE>

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.


<PAGE>


                         PITNEY BOWES CREDIT CORPORATION

                   Notes to Consolidated Financial Statements

Note 6. - Allowance for Credit Losses (continued)
<TABLE>

           December 31                                             2000           1999           1998
                                                                   ----           ----           ----
            (in thousands of dollars)
            Non-performing (non-earning) transactions
<S>                                                           <C>            <C>            <C>
              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
                                                                =======        =======        =======
</TABLE>

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
<TABLE>

           December 31                                                            2000           1999
                                                                                  ----           ----
           (in thousands of dollars)
<S>                                                                         <C>             <C>
           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
                                                                              ========       ========
</TABLE>

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.

<PAGE>

                         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.

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.

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.

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.

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.  PBI  expects  to  complete  the
transaction by the end of the third quarter of 2001. Office Systems includes the
copier and  facsimile  businesses.  Accordingly,  PBCC and Pitney  Bowes  Office
Systems  expects to enter into a new  operating  agreement  under  which it will
operate  after the  spin-off.  It is  anticipated  that this  agreement  will be
completed prior to the spin-off.

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 "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.

<PAGE>


                         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
<TABLE>

           December 31                                                                     2000           1999
                                                                                           ----           ----
            (in thousands of dollars)
<S>                                                                                  <C>             <C>
           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
                                                                                       ========       ========
</TABLE>

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.


<PAGE>



                         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:
<TABLE>

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

           Commercial paper at the weighted average
<S>                                                                                 <C>            <C>
             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
                                                                                      =========      =========
</TABLE>

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.


<PAGE>



                         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.

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.

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

</TABLE>

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.
<TABLE>
<S>    <C>                              <C>                        <C>                   <C>
         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
</TABLE>

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.


<PAGE>


                         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.
<TABLE>

                                                                               Revenue
                                                              ----------------------------------------
    Years Ended December 31                                        2000           1999           1998
                                                                   ----           ----           ----
    (in thousands of dollars)
<S>                                                           <C>            <C>            <C>
      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
                                                                =======        =======        =======
</TABLE>


<PAGE>


                         PITNEY BOWES CREDIT CORPORATION

                   Notes to Consolidated Financial Statements

Note 12. - Business Segment Information (continued)
<TABLE>

                                                                                  December 31,
                                                                      -------------------------------
    Net investment in financial assets (1):                                 2000                 1999
                                                                            ----                 ----
    (in thousands of dollars)
<S>                                                                  <C>                  <C>
      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
                                                                        ========             ========
</TABLE>



    (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.



<PAGE>


                         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:
<TABLE>
<S>                                                          <C>              <C>              <C>
                                                              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)

</TABLE>

(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:
<TABLE>
<S>         <C>                                                              <C>             <C>
                                                                                  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
                                                                              ========       ========

</TABLE>




<PAGE>


                         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:
<TABLE>

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

<S>                         <C> <C>                           <C>                           <C>
           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
                                                               ========       ========       ========

</TABLE>








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:
<TABLE>

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

<S>                                                                     <C>              <C>               <C>
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%

</TABLE>

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.

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 the fair market
values.


<PAGE>


                         PITNEY BOWES CREDIT CORPORATION

                   Notes to Consolidated Financial Statements

Note 14. - Stockholder's Equity

The following is a reconciliation of stockholder's equity:
<TABLE>

                                                               Capital                         Total
                                                 Common       in Excess       Retained     Stockholder's
         (in thousands of dollars)                Stock        of Par         Earnings        Equity
                                                  -----        ------         --------        ------
<S>                       <C> <C>            <C>             <C>            <C>            <C>
         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
                                               ========        ========       ========       ========

</TABLE>


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.


<PAGE>


                         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:
<TABLE>

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

<S>                                         <C>           <C>              <C>            <C>
         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.

</TABLE>
<PAGE>


                         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:
<TABLE>

           Years Ended December 31                                 2000           1999           1998
                                                                   ----           ----           ----
           (in thousands of dollars)
            Income from continuing operations
<S>                                                          <C>            <C>            <C>
              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
                                                                =======        =======        =======

</TABLE>


<PAGE>


                         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:
<TABLE>

           Years Ended December 31                                 2000           1999           1998
                                                                   ----           ----           ----
           (Percent of pretax income)
<S>                                                               <C>             <C>             <C>
            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%
                                                               ========        ========        ========

</TABLE>

<PAGE>




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.


<PAGE>


                         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.


<PAGE>




                         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):
<TABLE>

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

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

<S>                                          <C>             <C>            <C>            <C>
         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
                                               ========        ========       ========       ========


</TABLE>







<PAGE>



                         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).


<PAGE>


                         PITNEY BOWES CREDIT CORPORATION

                                     Part IV

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

<TABLE>
<S>                                                                                                <C>
(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)


<S>     <C>               <C>                                                      <C>
         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.

</TABLE>

<PAGE>


                         PITNEY BOWES CREDIT CORPORATION
<TABLE>

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


<S>      <C>              <C>                                                      <C>
         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.

</TABLE>

<PAGE>


                         PITNEY BOWES CREDIT CORPORATION
<TABLE>

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

<S>      <C>               <C>                                                      <C>
         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

</TABLE>

<PAGE>


                         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.
<TABLE>

<S>      <C>      <C>                                                           <C>
         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

</TABLE>

<PAGE>



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

                             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
                        -------         --------         ----------      ---------------    -----------


<S>                   <C>               <C>              <C>              <C>               <C>
   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



</TABLE>





(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.


<PAGE>


                         PITNEY BOWES CREDIT CORPORATION

                                   Exhibit (i)

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

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


Income from continuing operations
<S>                                    <C>          <C>         <C>           <C>          <C>
  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
                                          =======      =======     ========    ========      =======


</TABLE>



(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.


<PAGE>


                         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:
<TABLE>
<S>                                         <C>                                              <C>
                                                                                             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


</TABLE>


<PAGE>




                         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