Published: August 04, 2011
Pitney Bowes Announces Second Quarter Results for 2011
STAMFORD, Conn. - (BUSINESS WIRE) - Pitney Bowes Inc. (NYSE:PBI) today reported second quarter 2011 results.
Revenue for the quarter was $1.3 billion, an increase of one percent
compared with the prior year. As expected, revenue growth was reduced by
approximately one percent this quarter as a result of lower revenues
associated with the fire that destroyed the company's Dallas presort
facility in the first quarter of this year. Revenue also included a 3
percent benefit from foreign currency translation. There was continued
growth in equipment and software sales during the quarter. The combined
recurring revenue streams of supplies, rentals and financing declined
about 3 percent versus the prior year, which was a lower rate of decline
than both the prior quarter and the prior year.
Adjusted earnings per diluted share from continuing operations for the
second quarter was $0.52 compared with $0.48 for the prior year.
Adjusted earnings per diluted share would have been $0.03 higher except
for the reduction in earnings resulting from lower revenue related to
the Dallas presort facility fire. Adjusted earnings per diluted share
was also reduced by about $0.01 related to the company's investment in
its new digital mail communications platform, Volly . The company
expects it will be reimbursed by its insurance carriers for the $0.05
per diluted share in year-to-date lost earnings related to lower revenue
and expenses associated with the presort facility fire.
Earnings per diluted share for the quarter on a Generally Accepted
Accounting Principles (GAAP) basis was $0.49 compared with $0.30 per
diluted share for the prior year. GAAP earnings per diluted share for
the quarter included $0.02 for restructuring charges and asset
impairments associated with the company's Strategic Transformation
initiatives and less than $0.01 each for a tax charge associated with
out-of-the money stock options that expired during the quarter and a
loss associated with discontinued operations.
The company's earnings per share results for the quarter are summarized
in the table below:
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Second Quarter
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Adjusted EPS from Continuing Operations
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$0.52
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Restructuring Charges and Asset Impairments
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($0.02)
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GAAP EPS
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$0.49
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*The sum of the earnings per share does not equal the totals above due
to rounding and the impacts of tax charges and discontinued operations
as noted above.
Free cash flow for the quarter was $269 million, while on a GAAP basis
the company generated $153 million in cash from operations. Free cash
flow during the quarter benefited from the timing of tax payments and
refunds; an improvement in working capital; and lower finance
receivables. During the quarter, the company made $123 million in
contributions to its U.S. pension fund; used $85 million of cash for
dividends; and repurchased 2.1 million shares of its outstanding common
stock for $50 million. Year-to-date, the company has generated $554
million in free cash flow and on a GAAP basis $449 million in cash from
operations, which was used primarily to pay dividends, fund its pension
fund and buyback stock.
Commenting on the quarter, Chairman, President and CEO Murray D. Martin
said, "During the quarter we continued to see the benefits of our
ongoing actions to lay the foundation for long-term growth and
profitability across our business portfolio. We were able to improve our
EBIT margin, particularly in our SMB businesses and Software, despite an
unsettled global economic environment. Strong enterprise customer demand
fueled good revenue growth in Software and Production Mail.
"The flexibility provided by our improved processes, enhanced
productivity, and streamlined operations from Strategic Transformation
has also allowed us to make investments in new solutions and customer
experience. We have continued to expand our cloud-based family of
customer communications solutions for small and medium businesses. In
addition to pbSmartPostage , our internet-based postage solution, and
pbSmart Connections, our email marketing and communications platform, we
now have pbSmartMarketer and are in pilot with pbSmart Codes.
pbSmartMarketer allows businesses to identify potential new customers
modeled after their existing customer base; create customized direct
mail marketing campaigns; and track and measure the success of those
campaigns. pbSmartCodes is a web-based software solution that enables
businesses to create interactive marketing campaigns using a unique
Quick Response or QR code.
"In addition, we are advancing our market development activities with
large mailers and planning for a consumer roll out of Volly, our secure
digital mail delivery system.
"We have accomplished a lot already because of our Strategic
Transformation initiatives, but there is much more we expect to achieve
before the year is finished. The disciplined, integrated approach that
we have taken to our operations and markets will continue to drive a
more variable cost structure, even after the formal program ends."
Business Segment Results
The company reports its business segments in two groups based on the
customers it primarily serves: Small and Medium Business (SMB) Solutions
and Enterprise Business Solutions. The SMB Solutions group consists of
the company's global Mailing operations. The company aligns its SMB
business segments into North America Mailing and International Mailing
to reflect how the business is managed. North America Mailing includes
the operations of U.S. Mailing and Canada Mailing. International Mailing
includes all other SMB operations around the world. The Enterprise
Business Solutions group includes the company's global Production Mail,
Software, Management Services, Mail Services and Marketing Services
operations.
SMB Solutions
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2Q 2011
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Y-O-Y Change
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Revenue
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$670 million
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(1%)
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EBIT
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$203 million
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3%
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Within the SMB Solutions Group:
North America Mailing
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2Q 2011
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Y-O-Y Change
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Revenue
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$494 million
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(5%)
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EBIT
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$176 million
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(2%)
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In North American Mailing during the quarter, there were increased
placements of the company's Connect+ TM mailing systems and
positive growth in equipment sales in Canada. However, overall equipment
sales declined in part because of an increase in lease extensions. Lease
extensions are profitable transactions but generate less sales revenue
than new equipment leases. For the second consecutive quarter combined
recurring supplies, rentals and financing revenue streams declined at a
lower rate than previous quarters indicating a continuation of an
improving trend. In total, revenue declined 5 percent compared to the
prior year, including a one percent benefit from currency.
EBIT margin for the segment improved by 110 basis points versus the
prior year. EBIT benefited from ongoing productivity initiatives, lower
credit losses and extensions of customer leases. As revenue growth
improves, the segment is positioned for continued EBIT improvement.
International Mailing
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2Q 2011
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Y-O-Y Change
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Revenue
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$176 million
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13%
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EBIT
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$ 27 million
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56%
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International Mailing revenue grew on a reported basis and was slightly
positive excluding the benefit from currency. There was positive growth
in equipment sales during the quarter, driven largely by increasing
equipment sales in France and also sales of Connect+ in the UK. As in
the U.S., stream revenue declined at a moderating rate. Financing
revenue was flat with the prior year, reflecting an improvement in
equipment sales growth and a higher percentage of equipment being
leased. Rental and supplies revenue declined only slightly.
EBIT margin improved by 420 basis points versus the prior year in part
as productivity initiatives are driving positive leverage from revenue
growth.
Enterprise Business Solutions
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2Q 2011
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Y-O-Y Change
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Revenue
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$645 million
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4%
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EBIT
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$ 55 million
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12%
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Within the Enterprise Business Solutions Group:
Production Mail
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2Q 2011
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Y-O-Y Change
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Revenue
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$134 million
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10%
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EBIT
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$ 9 million
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2%
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Production Mail revenue grew 10 percent including a 5 percent benefit
from currency. Revenue growth was driven by strong sales of the
company's high-speed, high-integrity inserting systems in North America
and Asia. The company also had a good quarter of written business in
Europe and Asia for both inserting and high-speed Intellijet color
printing systems, while the U.S. experienced lower relative written
business. EBIT margin for the quarter increased substantially for the
Production Mail business when compared with the prior year, however,
this improvement was offset by start-up costs related to Volly.
Software
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2Q 2011
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Y-O-Y Change
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Revenue
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$ 100 million
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19%
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EBIT
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$ 10 million
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67%
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During the quarter, Software revenue grew 19 percent, including a 7
percent benefit from currency. Revenue growth was driven primarily by
strong demand worldwide for the company's customer communication and
data management software solutions, especially in the financial services
sector. The company had particularly good growth in high margin
licensing revenue and continued to write multi-year licensing
arrangements for some of its larger deals. These multi-year arrangements
will increase the proportion of recurring revenue in future periods.
EBIT increased 67 percent year-over-year and EBIT margin improved by 280
basis points driven by margin leverage on revenue expansion and the mix
of software sales.
Management Services
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2Q 2011
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Y-O-Y Change
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Revenue
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$240 million
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(3%)
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EBIT
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$ 20 million
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(10%)
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Management Services revenue declined 3 percent compared to the prior
year, including a 3 percent benefit from currency. The expected decline
was a result of account contractions and terminations in the U.S. last
year. However, net new written business improved significantly both in
the U.S. and Europe during the quarter. This should benefit revenue in
coming quarters. EBIT margin in the U.S. again improved as the company
continues to move towards a more variable cost structure for its labor.
However, the EBIT margin in Europe declined due to lower volume-driven
revenue and investments to position the business for growth in customer
communications management.
Mail Services
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2Q 2011
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Y-O-Y Change
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Revenue
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$134 million
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4%
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EBIT
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$ 10 million
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89%
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Revenue for Mail Services grew 4 percent while EBIT grew 89 percent. The
year-over-year impact of a one-time adjustment last year of $21 million
to revenue and $16 million to EBIT, to correct rates used to estimate
unbilled International Mail Services (IMS) revenue in prior periods, was
partially offset by the effects of the company's Dallas presort facility
fire.
The disruption caused by the facility fire in Dallas resulted in the
loss of more than $9 million in revenue and about $9 million in EBIT in
the quarter. At the end of June, the company opened a new mail
processing facility in Dallas reestablishing its unique ability to
achieve a high level of presort discounts nationally. The company
expects that the facility will be operating at full efficiency by the
end of the third quarter. As of today's date, the company has received
approximately $25 million as partial payment from insurance companies,
of which $15 million was received prior to June 30, 2011. The company
expects to recognize in income the portion of these and future proceeds
related to business interruption and other recoveries as allocations of
these proceeds are resolved with the insurance companies.
Excluding the impact of the fire this year, increasing Standard Mail
volume processed through the company's presort network led continued
growth in presort revenue and EBIT margin improvement. Excluding the
prior year adjustment, revenue in the international mail portion of the
business declined due to a lower volume of mail and packages shipped.
Marketing Services
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2Q 2011
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Y-O-Y Change
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Revenue
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$ 36 million
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(3%)
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EBIT
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$ 7 million
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(7%)
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Revenue in Marketing Services declined 3 percent because of fewer
household moves compared with the prior year and the transition of
online marketing revenue during the quarter. EBIT was impacted by lower
revenue and ongoing investments in new services, including the MyMove
start-up. MyMove is a recently launched on-line service for movers that
allows individuals who are moving to opt-in to various move-relevant
products and services. Click through rates from the traditional
MoverSource product to MyMove have been increasing steadily.
2011 Guidance
This guidance discusses future results which are inherently subject
to unforeseen risks and developments. As such, discussions about
the business outlook should be read in the context of an uncertain
future, as well as the risk factors identified in the safe harbor
language at the end of this release.
The company is reaffirming its adjusted earnings per diluted share, its
GAAP earnings per diluted share and its free cash flow guidance.
However, the company is modifying its revenue guidance for the year as a
result of the impact of the presort facility fire in Dallas, and the
overall economic outlook, particularly given the slow business recovery
in the SMB markets in the first half of the year.
The company now expects 2011 revenue, excluding the impacts of currency,
to be in a range of minus 2 to positive one percent growth.
The company's 2011 guidance for adjusted diluted earnings per share from
continuing operations is unchanged and is summarized below:
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2011 Earnings Guidance Reconciliation
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Full Year
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2010 Adjusted EPS
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$2.23
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Operations Growth Excluding SMB Stream Revenues*
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$0.32 to $0.42
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Impact of Lower SMB Stream Revenues*
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($0.30 to $0.25)
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2011 EPS on a Comparative Basis
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$2.25 to $2.40
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Investment in Volly Market Development
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($0.10 to $0.05)
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2011 Adjusted EPS from Continuing Operations
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$2.15 to $2.35
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*Stream revenues include financing, rentals and supplies in the SMB
Solutions Group
In 2011, the company anticipates generating incremental earnings of
$0.32 to $0.42 per share from operations growth and productivity,
excluding the impact of SMB stream revenues. As noted previously, the
company anticipates lower SMB stream revenues as a result of lower
equipment sales in prior periods, which are expected to negatively
impact earnings by $0.25 - $0.30 per share, resulting in comparative
earnings for the year of $2.25 to $2.40 per share. The company also
plans to invest $.05 to $.10 per share to develop the market for Volly,
a secure digital mail delivery system. As a result of improved margins,
the company expects 2011 adjusted earnings per share from continuing
operations to remain in the range of $2.15 to $2.35.
The company's 2011 guidance for GAAP diluted earnings per share from
continuing operations is summarized below:
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Full Year
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2011 Adjusted EPS from Continuing Operations
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$2.15 to $2.35
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Restructuring Charges and Asset Impairments
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($0.35 to $0.25)
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2011 GAAP EPS from Continuing Operations
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$1.80 to $2.10
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The company expects 2011 GAAP earnings per diluted share from continuing
operations in the range of $1.80 to $2.10 including the expected impact
of $0.25 to $0.35 per share for restructuring charges and asset
impairments associated with Strategic Transformation.
Earnings per share guidance assumes recoveries this year of losses
related to the Dallas fire.
As part of negotiations to settle the company's 2001 to 2004 IRS
examination, in July the company and the IRS agreed on the tax treatment
of a number of issues and agreed to revised tax calculations. As a
result, the company anticipates paying nearly $400 million of tax and
interest for the years 2001 to 2004 by releasing previously funded tax
bonds, and as a result this payment will not impact the company's cash
position. Additionally, the company expects to reduce tax reserves in
the third quarter by about $50 million (with about $30 million recorded
in Discontinued Operations). The impact of this agreement is not
included in the company's earnings guidance for the year.
The company continues to expect to generate free cash flow for 2011 in
the range of $750 million to $850 million.
Management of Pitney Bowes will discuss the company's results in a
broadcast over the Internet today at 5:00 p.m. EST. Instructions for
listening to the earnings results via the Web are available on the
Investor Relations page of the company's web site at www.pb.com/investorrelations.
Pitney Bowes is a $5.4 billion global leader whose products, services
and solutions deliver value within the mailstream and beyond. For more
information visit www.pitneybowes.com.
The company's financial results are reported in accordance with
generally accepted accounting principles (GAAP). However, earnings per
share, income from continuing operations, and cash from operations are
adjusted to exclude the impact of special items such as restructuring
charges, tax adjustments, accounting adjustments and write downs of
assets. Although these charges represent actual expenses to the
company, the company's management believes these charges may mask the
periodic income and financial and operating trends associated with our
business. In addition, such items are inconsistent in amount and
frequency and as such, the adjustments allow an investor greater insight
into the current underlying operating trends of the business. The
use of free cash flow has limitations. GAAP cash from operations has the
advantage of including all cash available to the company after actual
expenditures for all purposes. The company's management believes that
free cash flow permits an investor insight into the amount of cash that
management could have available for other discretionary uses. It
adjusts GAAP cash from operations for long-term commitments such as
capital expenditures, as well as special items like cash used for
restructuring charges, unusual tax payments and contributions to its
pension funds. These items use cash that is not otherwise available to
the company and are important expenditures. As a result, the company's
management compensates for these limitations by using a combination of
GAAP cash from operations and free cash flow in doing its planning.
EBIT is determined by deducting from segment revenue the related
costs and expenses attributable to the segment. EBIT excludes
interest, taxes, general corporate expenses, restructuring charges and
asset impairments which are generally managed across the entire company
on a consolidated basis. EBIT is useful to management in
demonstrating the operational profitability of the segments and is also
used for purposes of measuring the performance of our management team.
In addition, to better understand trends in its business, the
company's management believes that it is helpful to adjust revenue to
exclude the impact of changes in the translation of foreign currencies
into U.S. dollars. Financial results on a constant currency basis
exclude the impact of changes in foreign currency exchange rates since
the prior period under comparison and are calculated using the average
of the rates in effect during that period. Constant currency measures
are intended to help investors better understand the underlying
operational performance of the business excluding the impacts of shifts
in currency exchange rates over the intervening period.
Pitney Bowes has provided a quantitative reconciliation to GAAP in
supplemental schedules. This information may also be found at the
company's web site www.pb.com/investorrelations
in the Investor Relations section.
This document contains "forward-looking statements" about our
expected or potential future business and financial performance. For us
forward-looking statements include, but are not limited to, statements
about possible transformation initiatives; restructuring charges; our
future revenue and earnings guidance; and other statements about future
events or conditions. Forward-looking statements are not guarantees of
future performance and involve risks and uncertainties that could cause
actual results to differ materially from those projected. These risks
and uncertainties include, but are not limited to: the uncertain
economic environment, fluctuations in customer demand; mail volumes; foreign
currency exchange rates; the outcome of litigation; timely development,
market acceptance and regulatory approvals, if needed, of new products;
management of credit risk; management of outsourcing arrangements;
income tax or other regulatory levies; changes in postal regulations;
and the financial health of national posts; and other factors beyond our
control as more fully outlined in the company's 2010 Form 10-K Annual
Report and other reports filed with the Securities and Exchange
Commission. Pitney Bowes assumes no obligation to update any
forward-looking statements contained in this document as a result of new
information, events or developments.
Note: Consolidated statements of income; revenue and EBIT by business
segment; and reconciliation of GAAP to non-GAAP measures for the three
and six months ended June 30, 2011 and 2010, and consolidated balance
sheets at June 30, 2011 and March 31, 2011 are attached.
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Pitney Bowes Inc.
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Consolidated Statements of Income
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(Unaudited)
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(Dollars in thousands, except per share data)
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Three Months Ended June 30,
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Six Months Ended June 30,
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2011
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2010 (2)
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2011
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2010 (2)
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Revenue:
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Equipment sales
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$
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242,921
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$
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228,089
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$
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484,552
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$
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467,387
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Supplies
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78,587
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77,054
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161,457
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162,331
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Software
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105,516
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88,297
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205,081
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172,064
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Rentals
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142,576
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150,141
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285,627
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305,578
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Financing
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149,955
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156,604
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304,185
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319,379
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Support services
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176,807
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175,298
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355,421
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355,332
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Business services
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418,112
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421,754
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841,220
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863,399
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Total revenue
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1,314,474
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1,297,237
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2,637,543
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2,645,470
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Costs and expenses:
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Cost of equipment sales
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104,385
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101,072
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219,138
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206,909
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Cost of supplies
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25,562
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24,173
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51,754
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49,538
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Cost of software
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24,898
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21,207
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50,110
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42,363
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Cost of rentals
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32,809
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34,310
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65,408
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71,381
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Financing interest expense
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22,192
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21,821
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45,485
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43,759
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Cost of support services
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115,417
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111,695
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230,693
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226,301
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Cost of business services
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325,250
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|
|
337,652
|
|
|
|
658,817
|
|
|
|
668,124
|
|
|
Selling, general and administrative
|
|
|
|
|
436,015
|
|
|
|
426,352
|
|
|
|
865,934
|
|
|
|
869,649
|
|
|
Research and development
|
|
|
|
|
37,441
|
|
|
|
38,168
|
|
|
|
72,199
|
|
|
|
79,033
|
|
|
Restructuring charges and asset impairments
|
|
|
|
|
4,994
|
|
|
|
48,512
|
|
|
|
31,018
|
|
|
|
69,234
|
|
|
Other interest expense
|
|
|
|
|
28,550
|
|
|
|
29,204
|
|
|
|
57,074
|
|
|
|
56,862
|
|
|
Interest income
|
|
|
|
|
(2,215
|
)
|
|
|
(696
|
)
|
|
|
(3,437
|
)
|
|
|
(1,458
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
|
|
1,155,298
|
|
|
|
1,193,470
|
|
|
|
2,344,193
|
|
|
|
2,381,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
159,176
|
|
|
|
103,767
|
|
|
|
293,350
|
|
|
|
263,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
53,012
|
|
|
|
35,177
|
|
|
|
94,406
|
|
|
|
108,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
|
106,164
|
|
|
|
68,590
|
|
|
|
198,944
|
|
|
|
155,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of income tax
|
|
|
|
|
(635
|
)
|
|
|
(2,666
|
)
|
|
|
(2,517
|
)
|
|
|
(5,796
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income before attribution of noncontrolling interests
|
|
|
|
|
105,529
|
|
|
|
65,924
|
|
|
|
196,427
|
|
|
|
149,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Preferred stock dividends of subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
attributable to noncontrolling interests
|
|
|
|
|
4,594
|
|
|
|
4,543
|
|
|
|
9,188
|
|
|
|
9,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income - Pitney Bowes Inc.
|
|
|
|
$
|
100,935
|
|
|
$
|
61,381
|
|
|
$
|
187,239
|
|
|
$
|
140,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Pitney Bowes Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
101,570
|
|
|
$
|
64,047
|
|
|
$
|
189,756
|
|
|
$
|
146,216
|
|
|
Loss from discontinued operations
|
|
|
|
|
(635
|
)
|
|
|
(2,666
|
)
|
|
|
(2,517
|
)
|
|
|
(5,796
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income - Pitney Bowes Inc.
|
|
|
|
$
|
100,935
|
|
|
$
|
61,381
|
|
|
$
|
187,239
|
|
|
$
|
140,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share of common stock attributable to
|
|
|
|
|
|
|
|
|
|
|
|
Pitney Bowes Inc. common stockholders (1):
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
$
|
0.50
|
|
|
$
|
0.31
|
|
|
$
|
0.93
|
|
|
$
|
0.70
|
|
|
Discontinued operations
|
|
|
|
|
(0.00
|
)
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income - Pitney Bowes Inc.
|
|
|
|
$
|
0.50
|
|
|
$
|
0.30
|
|
|
$
|
0.92
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share of common stock attributable to
|
|
|
|
|
|
|
|
|
|
|
|
Pitney Bowes Inc. common stockholders (1):
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
$
|
0.50
|
|
|
$
|
0.31
|
|
|
$
|
0.93
|
|
|
$
|
0.70
|
|
|
Discontinued operations
|
|
|
|
|
(0.00
|
)
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income - Pitney Bowes Inc.
|
|
|
|
$
|
0.49
|
|
|
$
|
0.30
|
|
|
$
|
0.92
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common and potential common
|
|
|
|
|
|
|
|
|
|
|
|
shares outstanding
|
|
|
|
|
204,084,585
|
|
|
|
208,059,314
|
|
|
|
204,227,290
|
|
|
|
207,971,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The sum of the earnings per share amounts may not equal the totals
above due to rounding.
|
|
|
|
(2)
|
|
Certain prior year amounts have been reclassified to conform to the
current year presentation.
|
|
|
|
|
|
|
|
|
|
Pitney Bowes Inc.
|
|
Consolidated Balance Sheets
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
06/30/11
|
|
|
|
03/31/11
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
578,448
|
|
|
$
|
652,069
|
|
|
Short-term investments
|
|
|
|
|
45,667
|
|
|
|
28,398
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, gross
|
|
|
|
|
756,198
|
|
|
|
780,066
|
|
|
Allowance for doubtful accounts receivables
|
|
|
|
|
(31,367
|
)
|
|
|
(30,073
|
)
|
|
Accounts receivables, net
|
|
|
|
|
724,831
|
|
|
|
749,993
|
|
|
|
|
|
|
|
|
|
|
Finance receivables
|
|
|
|
|
1,328,180
|
|
|
|
1,336,881
|
|
|
Allowance for credit losses
|
|
|
|
|
(47,603
|
)
|
|
|
(47,981
|
)
|
|
Finance receivables, net
|
|
|
|
|
1,280,577
|
|
|
|
1,288,900
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
|
177,504
|
|
|
|
180,292
|
|
|
Current income taxes
|
|
|
|
|
70,890
|
|
|
|
66,678
|
|
|
Other current assets and prepayments
|
|
|
|
|
113,052
|
|
|
|
115,683
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
|
2,990,969
|
|
|
|
3,082,013
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
|
429,737
|
|
|
|
420,385
|
|
|
Rental property and equipment, net
|
|
|
|
|
282,976
|
|
|
|
290,013
|
|
|
|
|
|
|
|
|
|
|
Finance receivables
|
|
|
|
|
1,194,164
|
|
|
|
1,228,294
|
|
|
Allowance for credit losses
|
|
|
|
|
(20,305
|
)
|
|
|
(21,239
|
)
|
|
Finance receivables, net
|
|
|
|
|
1,173,859
|
|
|
|
1,207,055
|
|
|
|
|
|
|
|
|
|
|
Investment in leveraged leases
|
|
|
|
|
262,052
|
|
|
|
258,905
|
|
|
Goodwill
|
|
|
|
|
2,336,796
|
|
|
|
2,331,022
|
|
|
Intangible assets, net
|
|
|
|
|
273,830
|
|
|
|
286,686
|
|
|
Non-current income taxes
|
|
|
|
|
134,569
|
|
|
|
134,564
|
|
|
Other assets
|
|
|
|
|
484,166
|
|
|
|
486,211
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
$
|
8,368,954
|
|
|
$
|
8,496,854
|
|
|
|
|
|
|
|
|
|
|
Liabilities, noncontrolling interests and
stockholders' deficit
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
|
$
|
1,748,628
|
|
|
$
|
1,757,372
|
|
|
Current income taxes
|
|
|
|
|
231,982
|
|
|
|
206,134
|
|
|
Notes payable and current portion of long-term obligations
|
|
|
|
|
2,477
|
|
|
|
45,450
|
|
|
Advance billings
|
|
|
|
|
481,239
|
|
|
|
508,160
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
|
2,464,326
|
|
|
|
2,517,116
|
|
|
|
|
|
|
|
|
|
|
Deferred taxes on income
|
|
|
|
|
294,656
|
|
|
|
273,379
|
|
|
Tax uncertainties and other income tax liabilities
|
|
|
|
|
557,081
|
|
|
|
546,881
|
|
|
Long-term debt
|
|
|
|
|
4,239,965
|
|
|
|
4,236,437
|
|
|
Other non-current liabilities
|
|
|
|
|
517,725
|
|
|
|
651,761
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
8,073,753
|
|
|
|
8,225,574
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests (Preferred stockholders' equity in
subsidiaries)
|
|
|
|
|
296,370
|
|
|
|
296,370
|
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit:
|
|
|
|
|
|
|
|
Cumulative preferred stock, $50 par value, 4% convertible
|
|
|
|
|
4
|
|
|
|
4
|
|
|
Cumulative preference stock, no par value, $2.12 convertible
|
|
|
|
|
741
|
|
|
|
741
|
|
|
Common stock, $1 par value
|
|
|
|
|
323,338
|
|
|
|
323,338
|
|
|
Additional paid-in capital
|
|
|
|
|
235,504
|
|
|
|
236,633
|
|
|
Retained earnings
|
|
|
|
|
4,318,692
|
|
|
|
4,293,198
|
|
|
Accumulated other comprehensive loss
|
|
|
|
|
(379,162
|
)
|
|
|
(414,496
|
)
|
|
Treasury stock, at cost
|
|
|
|
|
(4,500,286
|
)
|
|
|
(4,464,508
|
)
|
|
|
|
|
|
|
|
|
|
Total Pitney Bowes Inc. stockholders' deficit
|
|
|
|
|
(1,169
|
)
|
|
|
(25,090
|
)
|
|
|
|
|
|
|
|
|
|
Total liabilities, noncontrolling interests and stockholders' deficit
|
|
|
|
$
|
8,368,954
|
|
|
$
|
8,496,854
|
|
|
|
|
|
|
|
|
|
|
|
|
Pitney Bowes Inc.
|
|
Revenue and EBIT
|
|
Business Segments
|
|
June 30, 2011
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Mailing
|
|
|
|
$
|
493,653
|
|
|
$
|
520,581
|
|
|
(5
|
%)
|
|
International Mailing
|
|
|
|
|
176,158
|
|
|
|
155,579
|
|
|
13
|
%
|
|
Small & Medium Business Solutions
|
|
|
|
|
669,811
|
|
|
|
676,160
|
|
|
(1
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Production Mail
|
|
|
|
|
133,769
|
|
|
|
121,466
|
|
|
10
|
%
|
|
Software
|
|
|
|
|
99,783
|
|
|
|
84,195
|
|
|
19
|
%
|
|
Management Services
|
|
|
|
|
240,461
|
|
|
|
248,809
|
|
|
(3
|
%)
|
|
Mail Services
|
|
|
|
|
134,273
|
|
|
|
129,139
|
|
|
4
|
%
|
|
Marketing Services
|
|
|
|
|
36,377
|
|
|
|
37,468
|
|
|
(3
|
%)
|
|
Enterprise Business Solutions
|
|
|
|
|
644,663
|
|
|
|
621,077
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
$
|
1,314,474
|
|
|
$
|
1,297,237
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Mailing
|
|
|
|
$
|
175,786
|
|
|
$
|
179,531
|
|
|
(2
|
%)
|
|
International Mailing
|
|
|
|
|
26,735
|
|
|
|
17,121
|
|
|
56
|
%
|
|
Small & Medium Business Solutions
|
|
|
|
|
202,521
|
|
|
|
196,652
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Production Mail
|
|
|
|
|
9,223
|
|
|
|
9,010
|
|
|
2
|
%
|
|
Software
|
|
|
|
|
9,542
|
|
|
|
5,727
|
|
|
67
|
%
|
|
Management Services
|
|
|
|
|
19,979
|
|
|
|
22,181
|
|
|
(10
|
%)
|
|
Mail Services
|
|
|
|
|
9,819
|
|
|
|
5,197
|
|
|
89
|
%
|
|
Marketing Services
|
|
|
|
|
6,792
|
|
|
|
7,337
|
|
|
(7
|
%)
|
|
Enterprise Business Solutions
|
|
|
|
|
55,355
|
|
|
|
49,452
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total EBIT
|
|
|
|
$
|
257,876
|
|
|
$
|
246,104
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated amounts:
|
|
|
|
|
|
|
|
|
|
Interest, net (2)
|
|
|
|
|
(48,527
|
)
|
|
|
(50,329
|
)
|
|
|
|
Corporate expense
|
|
|
|
|
(45,179
|
)
|
|
|
(43,496
|
)
|
|
|
|
Restructuring charges and asset impairments
|
|
|
|
|
(4,994
|
)
|
|
|
(48,512
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
$
|
159,176
|
|
|
$
|
103,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Earnings before interest and taxes (EBIT) excludes general corporate
expenses and restructuring charges and asset impairments.
|
|
|
|
|
|
(2)
|
|
Interest, net includes financing interest expense, other interest
expense and interest income.
|
|
|
|
Pitney Bowes Inc.
|
|
Revenue and EBIT
|
|
Business Segments
|
|
June 30, 2011
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Mailing
|
|
|
|
$
|
1,002,692
|
|
|
$
|
1,055,244
|
|
|
(5
|
%)
|
|
International Mailing
|
|
|
|
|
346,691
|
|
|
|
327,602
|
|
|
6
|
%
|
|
Small & Medium Business Solutions
|
|
|
|
|
1,349,383
|
|
|
|
1,382,846
|
|
|
(2
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Production Mail
|
|
|
|
|
265,375
|
|
|
|
247,345
|
|
|
7
|
%
|
|
Software
|
|
|
|
|
195,768
|
|
|
|
165,202
|
|
|
19
|
%
|
|
Management Services
|
|
|
|
|
482,085
|
|
|
|
503,425
|
|
|
(4
|
%)
|
|
Mail Services
|
|
|
|
|
278,556
|
|
|
|
277,162
|
|
|
1
|
%
|
|
Marketing Services
|
|
|
|
|
66,376
|
|
|
|
69,490
|
|
|
(4
|
%)
|
|
Enterprise Business Solutions
|
|
|
|
|
1,288,160
|
|
|
|
1,262,624
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
$
|
2,637,543
|
|
|
$
|
2,645,470
|
|
|
(0
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Mailing
|
|
|
|
$
|
355,447
|
|
|
$
|
365,805
|
|
|
(3
|
%)
|
|
International Mailing
|
|
|
|
|
49,928
|
|
|
|
37,563
|
|
|
33
|
%
|
|
Small & Medium Business Solutions
|
|
|
|
|
405,375
|
|
|
|
403,368
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Production Mail
|
|
|
|
|
16,397
|
|
|
|
20,917
|
|
|
(22
|
%)
|
|
Software
|
|
|
|
|
15,054
|
|
|
|
9,511
|
|
|
58
|
%
|
|
Management Services
|
|
|
|
|
41,008
|
|
|
|
42,273
|
|
|
(3
|
%)
|
|
Mail Services
|
|
|
|
|
20,084
|
|
|
|
30,474
|
|
|
(34
|
%)
|
|
Marketing Services
|
|
|
|
|
10,952
|
|
|
|
11,859
|
|
|
(8
|
%)
|
|
Enterprise Business Solutions
|
|
|
|
|
103,495
|
|
|
|
115,034
|
|
|
(10
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Total EBIT
|
|
|
|
$
|
508,870
|
|
|
$
|
518,402
|
|
|
(2
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated amounts:
|
|
|
|
|
|
|
|
|
|
Interest, net (2)
|
|
|
|
|
(99,122
|
)
|
|
|
(99,163
|
)
|
|
|
|
Corporate expense
|
|
|
|
|
(85,380
|
)
|
|
|
(86,230
|
)
|
|
|
|
Restructuring charges and asset impairments
|
|
|
|
|
(31,018
|
)
|
|
|
(69,234
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
$
|
293,350
|
|
|
$
|
263,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Earnings before interest and taxes (EBIT) excludes general corporate
expenses and restructuring charges and asset impairments.
|
|
|
|
|
|
(2)
|
|
Interest, net includes financing interest expense, other interest
expense and interest income.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pitney Bowes Inc.
|
|
Reconciliation of Reported Consolidated Results to Adjusted
Results
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
after income taxes, as reported
|
|
|
|
$
|
101,570
|
|
|
$
|
64,047
|
|
|
$
|
189,756
|
|
|
$
|
146,216
|
|
|
Restructuring charges and asset impairments
|
|
|
|
|
3,563
|
|
|
|
31,870
|
|
|
|
20,869
|
|
|
|
45,397
|
|
|
Tax adjustments
|
|
|
|
|
334
|
|
|
|
3,800
|
|
|
|
2,513
|
|
|
|
21,490
|
|
|
Income from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
after income taxes, as adjusted
|
|
|
|
$
|
105,467
|
|
|
$
|
99,717
|
|
|
$
|
213,138
|
|
|
$
|
213,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per share from
|
|
|
|
|
|
|
|
|
|
|
|
continuing operations, as reported
|
|
|
|
$
|
0.50
|
|
|
$
|
0.31
|
|
|
$
|
0.93
|
|
|
$
|
0.70
|
|
|
Restructuring charges and asset impairments
|
|
|
|
|
0.02
|
|
|
|
0.15
|
|
|
|
0.10
|
|
|
|
0.22
|
|
|
Tax adjustments
|
|
|
|
|
0.00
|
|
|
|
0.02
|
|
|
|
0.01
|
|
|
|
0.10
|
|
|
Diluted earnings per share from continuing
|
|
|
|
|
|
|
|
|
|
|
|
operations, as adjusted
|
|
|
|
$
|
0.52
|
|
|
$
|
0.48
|
|
|
$
|
1.04
|
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net cash provided by operating activities,
|
|
|
|
|
|
|
|
|
|
|
|
as reported
|
|
|
|
$
|
152,640
|
|
|
$
|
122,248
|
|
|
$
|
449,401
|
|
|
$
|
423,802
|
|
|
Capital expenditures
|
|
|
|
|
(53,341
|
)
|
|
|
(30,272
|
)
|
|
|
(88,017
|
)
|
|
|
(58,639
|
)
|
|
Restructuring payments
|
|
|
|
|
22,223
|
|
|
|
39,035
|
|
|
|
51,968
|
|
|
|
66,755
|
|
|
Pension contribution
|
|
|
|
|
123,000
|
|
|
|
-
|
|
|
|
123,000
|
|
|
|
-
|
|
|
Reserve account deposits
|
|
|
|
|
24,083
|
|
|
|
30,688
|
|
|
|
18,088
|
|
|
|
19,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow, as adjusted
|
|
|
|
$
|
268,605
|
|
|
$
|
161,699
|
|
|
$
|
554,440
|
|
|
$
|
451,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: The sum of the earnings per share amounts may not equal the
totals above due to rounding.
|
Editorial:
Sheryl Y. Battles, 203-351-6808
VP, Corp.
Communications
or
Financial:
Charles F. McBride,
203-351-6349
VP, Investor Relations
www.pitneybowes.com
Copyright © 2012, Business Wire, Inc., All rights reserved. Copyright © 2012, NewsBlaze, Daily News
|
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