Pitney Bowes Announces Third Quarter Results for 2012

Note: Consolidated statements of income; revenue and EBIT by business segment; and reconciliation of GAAP to non-GAAP measures for the three months and nine months ended September 30, 2012 and 2011, and consolidated balance sheets at September 30, 2012 and December 31, 2011 are attached.


Pitney Bowes Inc.
Consolidated Statements of Income
(Unaudited)

(Dollars in thousands, except per share data)
	Three months ended September 30,						Nine months ended September 30,
		2012			2011⁽²⁾			2012			2011 ⁽²⁾
Revenue:
Equipment sales	$	212,103		$	221,475		$	656,517		$	706,027
Supplies		66,902			74,271			213,789			235,728
Software		93,476			113,224			302,377			318,305
Rentals		142,288			154,210			428,174			467,064
Financing		123,999			136,000			373,695			412,958
Support services		171,652			175,286			516,424			530,707
Business services		405,257			425,258			1,226,175			1,266,478

Total revenue		1,215,677			1,299,724			3,717,151			3,937,267

Costs and expenses:
Cost of equipment sales		105,556			97,559			309,190			316,697
Cost of supplies		20,694			22,611			65,428			74,365
Cost of software		22,784			23,431			68,281			73,541
Cost of rentals		25,182			35,819			87,257			107,834
Financing interest expense		19,604			21,430			61,385			66,915
Cost of support services		107,095			114,074			334,304			344,767
Cost of business services		315,830			326,415			948,359			985,232
Selling, general and administrative		400,862			427,412			1,203,653			1,286,739
Research and development		36,669			35,573			104,518			107,772
Restructuring charges and asset impairments		9,986			32,956			11,060			63,974
Goodwill impairment		18,315			45,650			18,315			45,650
Other interest expense		27,541			28,932			87,261			86,006
Interest income		(2,057	)		(1,265	)		(5,793	)		(4,702	)
Other income, net		-			(10,718	)		1,138			(10,718	)

Total costs and expenses		1,108,061			1,199,879			3,294,356			3,544,072

Income from continuing operations before income taxes		107,616			99,845			422,795			393,195

Provision for income taxes		26,489			(17,087	)		93,519			77,319

Income from continuing operations		81,127			116,932			329,276			315,876

Income from discontinued operations, net of income tax		-			60,428			19,332			57,911

Net income before attribution of noncontrolling interests		81,127			177,360			348,608			373,787

Less: Preferred stock dividends of subsidiaries attributable
to noncontrolling interests		4,594			4,593			13,782			13,781

Net income - Pitney Bowes Inc.	$	76,533		$	172,767		$	334,826		$	360,006


Amounts attributable to common stockholders:
Income from continuing operations	$	76,533		$	112,339		$	315,494		$	302,095
Income from discontinued operations		-			60,428			19,332			57,911

Net income - Pitney Bowes Inc.	$	76,533		$	172,767		$	334,826		$	360,006

Basic earnings per share attributable to common stockholders ⁽¹⁾ :
Continuing operations		0.38			0.56			1.58			1.49
Discontinued operations		0.00			0.30			0.10			0.29

Net income - Pitney Bowes Inc.	$	0.38		$	0.86		$	1.67		$	1.78

Diluted earnings per share attributable to common stockholders ⁽¹⁾ :
Continuing operations		0.38			0.56			1.57			1.48
Discontinued operations		0.00			0.30			0.10			0.28

Net income - Pitney Bowes Inc.	$	0.38		$	0.85		$	1.66		$	1.77

⁽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 in thousands, except per share data)

Assets		09/30/12			12/31/11
Current assets:
Cash and cash equivalents	$	424,789		$	856,238
Short-term investments		36,238			12,971

Accounts receivable, gross		695,575			755,485
Allowance for doubtful accounts receivable		(28,355	)		(31,855	)
Accounts receivable, net		667,220			723,630

Finance receivables		1,218,080			1,296,673
Allowance for credit losses		(26,368	)		(45,583	)
Finance receivables, net		1,191,712			1,251,090

Inventories		187,082			178,599
Current income taxes		22,044			102,556
Other current assets and prepayments		144,987			134,774

Total current assets		2,674,072			3,259,858

Property, plant and equipment, net		382,850			404,146
Rental property and equipment, net		249,310			258,711

Finance receivables		1,047,411			1,123,638
Allowance for credit losses		(18,235	)		(17,847	)
Finance receivables, net		1,029,176			1,105,791

Investment in leveraged leases		34,373			138,271
Goodwill		2,127,114			2,147,088
Intangible assets, net		175,995			212,603
Non-current income taxes		45,615			89,992
Other assets		555,661			530,644

Total assets	$	7,274,166		$	8,147,104

Liabilities, noncontrolling interests and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities	$	1,643,395		$	1,840,465
Current income taxes		220,236			242,972
Notes payable and current portion of long-term obligations		375,000			550,000
Advance billings		449,051			458,425

Total current liabilities		2,687,682			3,091,862

Deferred taxes on income		25,017			175,944
Tax uncertainties and other income tax liabilities		193,867			194,840
Long-term debt		3,305,504			3,683,909
Other non-current liabilities		641,093			743,165

Total liabilities		6,853,163			7,889,720

Noncontrolling interests (Preferred stockholders' equity in subsidiaries)		296,370			296,370

Stockholders' equity:
Cumulative preferred stock, $50 par value, 4% convertible		4			4
Cumulative preference stock, no par value, $2.12 convertible		653			659
Common stock, $1 par value		323,338			323,338
Additional paid-in-capital		222,620			240,584
Retained Earnings		4,709,761			4,600,217
Accumulated other comprehensive loss		(625,868	)		(661,645	)
Treasury Stock, at cost		(4,505,875	)		(4,542,143	)

Total Pitney Bowes Inc. stockholders' equity		124,633			(38,986	)

Total liabilities, noncontrolling interests and stockholders' equity	$	7,274,166		$	8,147,104


Pitney Bowes Inc.
Revenue and EBIT
Business Segments
September 30, 2012
(Unaudited)

(Dollars in thousands)	Three Months Ended September 30,
							%
		2012			2011		Change
Revenue

North America Mailing	$	447,920			475,663		(6	%)
International Mailing		154,171			177,797		(13	%)
Small & Medium Business Solutions		602,091			653,460		(8	%)

Production Mail		122,251			117,220		4	%
Software		88,629			109,153		(19	%)
Management Services		220,887			235,428		(6	%)
Mail Services		142,182			143,055		(1	%)
Marketing Services		39,637			41,408		(4	%)
Enterprise Business Solutions		613,586			646,264		(5	%)

Total revenue	$	1,215,677			1,299,724		(6	%)

EBIT (1)

North America Mailing	$	168,934		$	177,280		(5	%)
International Mailing		11,286			25,105		(55	%)
Small & Medium Business Solutions		180,220			202,385		(11	%)

Production Mail		3,555			(3,426	)	204	%
Software		956			16,564		(94	%)
Management Services		10,266			18,248		(44	%)
Mail Services		16,671			35,107		(53	%)
Marketing Services		9,297			8,716		7	%
Enterprise Business Solutions		40,745			75,209		(46	%)

Total EBIT	$	220,965		$	277,594		(20	%)

Unallocated amounts:
Interest, net (2)		(45,088	)		(49,097	)
Corporate and other expenses		(39,960	)		(50,046	)
Restructuring and asset impairments		(9,986	)		(32,956	)
Goodwill impairment		(18,315	)		(45,650	)

Income from continuing operations before income taxes	$	107,616		$	99,845

(1)		Earnings before interest and taxes (EBIT) excludes general corporate expenses, restructuring charges and asset impairments and goodwill impairment.
(2)		Interest, net includes financing interest expense, other interest expense and interest income.


Pitney Bowes Inc.
Revenue and EBIT
Business Segments
September 30, 2012
(Unaudited)

(Dollars in thousands)	Nine Months Ended September 30,
							%
		2012			2011		Change
Revenue

North America Mailing	$	1,362,709			1,478,355		(8%)
International Mailing		487,665			524,488		(7%)
Small & Medium Business Solutions		1,850,374			2,002,843		(8%)

Production Mail		360,334			382,595		(6%)
Software		288,830			304,921		(5%)
Management Services		679,078			717,513		(5%)
Mail Services		432,845			421,611		3%
Marketing Services		105,690			107,784		(2%)
Enterprise Business Solutions		1,866,777			1,934,424		(3%)

Total Revenue	$	3,717,151			3,937,267		(6%)

EBIT (1)

North America Mailing	$	514,975		$	532,727		(3%)
International Mailing		53,041			75,033		(29%)
Small & Medium Business Solutions		568,016			607,760		(7%)

Production Mail		11,928			12,971		(8%)
Software		20,135			31,618		(36%)
Management Services		36,187			59,256		(39%)
Mail Services		75,661			55,191		37%
Marketing Services		21,617			19,668		10%
Enterprise Business Solutions		165,528			178,704		(7%)

Total EBIT	$	733,544		$	786,464		(7%)

Unallocated amounts:
Interest, net		(142,853	)		(148,219	)
Corporate and other expenses		(138,521	)		(135,426	)
Restructuring and asset impairments		(11,060	)		(63,974	)
Goodwill impairment		(18,315	)		(45,650	)

Income from continuing operations before income taxes	$	422,795		$	393,195

(1)		Earnings before interest and taxes (EBIT) excludes general corporate expenses, restructuring charges and asset impairments and goodwill impairment.
(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 September 30,						Nine Months Ended September 30,
		2012			2011			2012			2011

GAAP income from continuing operations
after income taxes, as reported	$	76,533		$	112,339		$	315,494		$	302,095
Restructuring charges and asset impairments		6,430			22,169			6,892			43,038
Goodwill impairment		11,172			31,334			11,172			31,334
Sale of leveraged lease assets		-			(26,689	)		(12,886	)		(26,689	)
Tax adjustments		-			447			-			2,960
Income from continuing operations
after income taxes, as adjusted	$	94,135		$	139,600		$	320,672		$	352,738


GAAP diluted earnings per share from
continuing operations, as reported	$	0.38		$	0.56		$	1.57		$	1.48
Restructuring charges and asset impairments		0.03			0.11			0.03			0.21
Goodwill impairment		0.06			0.15			0.06			0.15
Sale of leveraged lease		-			(0.13	)		(0.06	)		(0.13	)
Tax adjustments		-			0.00			-			0.01
Diluted earnings per share from continuing
operations, as adjusted	$	0.47		$	0.69		$	1.59		$	1.73


GAAP net cash provided by operating activities,
as reported	$	69,466		$	301,055		$	439,633		$	750,456
Capital expenditures		(39,065	)		(35,012	)		(127,816	)		(123,029	)
Restructuring payments		12,871			26,411			60,746			78,379
Pension contribution		-			-			95,000			123,000
Tax payments on sale of leveraged lease assets		14,345			-			99,249			-
Reserve account deposits		(17,707	)		(32,616	)		(15,373	)		(14,528	)

Free cash flow, as adjusted	$	39,910		$	259,838		$	551,439		$	814,278

Note: The sum of the earnings per share amounts may not equal the totals above due to rounding.

« Previous Page 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 Next Page »