Pitney Bowes Announces Third Quarter 2015 Financial Results
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Pitney Bowes Announces Third Quarter 2015 Financial Results

STAMFORD, Conn. — (BUSINESS WIRE) — October 29, 2015 — Pitney Bowes Inc. (NYSE: PBI), a global technology company that provides products and solutions that power commerce, today reported financial results for the third quarter 2015.

Quarterly Financial Results:

Strategic Updates:

"We made solid progress on our strategic plan in the third quarter," said Marc B. Lautenbach, President and CEO, Pitney Bowes. “Our North America SMB business continued to stabilize with equipment sales growing for the quarter. We improved our operational excellence with increased margins and very solid cash flow performance in the quarter. Our ERP project, which promises to unlock substantial value in our Company, got off to a very good start in early October with a successful launch in Canada. Finally, although our Ecommerce business continued to face currency headwinds, the integration of Borderfree remains on track. Overall, Digital Commerce grew 10 percent on a constant currency basis and I remain very optimistic about the long-term prospects of this business."

THIRD QUARTER 2015 - FINANCIAL RESULTS

Revenue was $870 million, a decline of 4 percent on a constant currency basis and 8 percent on a reported basis when compared to prior year.

Digital Commerce Solutions revenue grew 10 percent on a constant currency basis and 6 percent on a reported basis. Enterprise Business Solutions revenue declined 1 percent on a constant currency basis and 3 percent on a reported basis. SMB Solutions revenue declined 3 percent on a constant currency basis and 8 percent on a reported basis.

Adjusted earnings per diluted share were $0.43. Prior year adjusted earnings per diluted share were $0.51 and included $0.08 per share of tax benefits. Excluding the tax benefits in the prior year, adjusted earnings per diluted share this quarter would have been flat to the prior year.

Generally Accepted Accounting Principles (GAAP) earnings per diluted share were $0.44 and included a $0.01 per share net tax benefit related to the Company’s previous divestiture of an investment and other acquisition and disposition related transactions.

Earnings per share this quarter were reduced by $0.02 per share due to the impacts of foreign exchange. As expected, earnings per share this quarter were also impacted by the loss of three months of Imagitas earnings, which were estimated to be approximately $0.03 per share, and $0.01 per share of expense for three months of amortization of intangibles related to Borderfree.

The Company’s earnings per share results for the quarter are summarized in the table below:

      Third Quarter *
     

2015

   

2014

Adjusted EPS from continuing operations     $ 0.43     $ 0.51  
Net tax benefit from transactions     $ 0.01       -  
Investment divestiture       -     $ 0.05  
Restructuring charges       -       ($0.01 )
GAAP EPS from continuing operations     $ 0.44     $ 0.55  
Discontinued operations - income       -     $ 0.10  
GAAP EPS     $ 0.44     $ 0.65  

* The sum of the earnings per share may not equal the totals above due to rounding

Free cash flow during the quarter was $131 million and cash provided by operating activities was $150 million on a GAAP basis. In comparison to the prior year, third quarter free cash flow was higher primarily due to lower working capital requirements and lower capital expenditures due to less of an investment in the Company’s new ERP platform. During the quarter, the Company used cash to pay $38 million in dividends to its common shareholders, repurchase $100 million worth of its shares and make $15 million in restructuring payments.

BUSINESS SEGMENT REPORTING

The Company revised its business segment reporting in the second quarter 2015 for its Digital Commerce Solutions segment. The Company’s business segment reporting reflects the clients served in each market and the way it manages these segments for growth and profitability. The primary reporting segment groups are the SMB Solutions group; the Enterprise Business Solutions group; and the Digital Commerce Solutions group.

The SMB Solutions group offers mailing equipment, financing, services and supplies for small and medium businesses to efficiently create mail and evidence postage. This group includes the North America Mailing and International Mailing segments. North America Mailing includes the operations of U.S. and Canada Mailing. International Mailing includes all other SMB operations around the world.

The Enterprise Business Solutions group provides mailing and printing equipment and services for large enterprise clients to process mail, including sortation services to qualify large mail volumes for postal worksharing discounts. This group includes the global Production Mail and Presort Services segments.

The Digital Commerce Solutions group provides customer engagement, customer information and location intelligence software; and solutions that facilitate global cross-border ecommerce transactions and shipping solutions for businesses of all sizes. This group includes the Software Solutions and Global Ecommerce segments.

The Other segment is comprised of the Imagitas marketing services business, which was sold on May 29, 2015.

SMB Solutions Group

          ($ millions)       Third Quarter
          Revenue      

2015

 

2014

 

Y/Y

Reported

 

Y/Y

Ex Currency

 

Y/Y

Ex Currency

and Divested

Revenues*

          North America Mailing       $353   $363   (3%)   (2%)   (2%)
          International Mailing       105   132   (21%)   (9%)   (7%)
          SMB Solutions Total       $458   $496   (8%)   (3%)   (3%)
                                   
          EBIT                        
          North America Mailing       $159   $160   0%        
          International Mailing       11   16   (33%)        
          SMB Solutions Total       $170   $176   (3%)        
                                   

* Excludes the impacts of currency and the divested revenues in Europe related to the transition to a dealer sales network in six smaller European markets completed in the third quarter of 2014.

North America Mailing

North America Mailing revenue experienced the lowest rate of decline in 6 quarters, benefiting from 2 percent growth in equipment sales as productivity continues to improve. Recurring revenue stream trends also continued to be in-line with prior quarters. EBIT margin continued to improve versus the prior year due to the mix of business, organizational streamlining and on-going cost reduction initiatives.

International Mailing

During the quarter, currency adversely affected revenue comparisons by 12 percentage points. For comparative purposes, revenue declined 7 percent when adjusted for the impacts of both currency and the reduction in revenue resulting from the exit of direct operations in some European countries completed in the third quarter of 2014.

The rate of decline in revenue is stabilizing in most of the major markets where the go-to-market resource shift has been completed. The Company has been focused on the transition and training of the new sales organization in France, which is expected to result in improved productivity. EBIT margin declined versus the prior year due to lower mail finishing equipment sales, the impact of currency on costs and the temporary incremental costs related to the transition of the sales organization in France.

Enterprise Business Solutions Group

          ($ millions)     Third Quarter
          Revenue    

2015

 

2014

 

Y/Y

Reported

 

Y/Y

Ex Currency

 

Y/Y

Ex Currency

and Divested

Revenues*

          Production Mail     $102   $113   (10%)   (5%)   (4%)
          Presort Services     116   111   4%   4%   4%
          Enterprise Business Total     $218   $225   (3%)   (1%)   0%
                                 
          EBIT                      
          Production Mail     $12   $10   30%        
          Presort Services     26   22   18%        
          Enterprise Business Total     $38   $31   22%        

* Excluding the impacts of currency and the divested revenues in Europe related to the transition to a dealer sales network in six smaller European markets completed in the third quarter of 2014.

Production Mail

While inserting equipment sales grew versus prior year, there were no production print installations during the quarter, which adversely impacted revenue. Revenue also declined partially due to lower support services. EBIT margin improved versus the prior year due to the mix of higher-margin inserting equipment sales as well as on-going cost reduction initiatives.

Presort Services

Revenue benefited from higher volumes of First Class and Standard mail processed versus the prior year. EBIT margin improved versus the prior year due to the revenue growth and on-going operational productivity.

Digital Commerce Solutions Group

          ($ millions)       Third Quarter
          Revenue       2015   2014   Y/Y

Reported

  Y/Y

Ex Currency

          Software Solutions       $98   $112   (13%)   (7%)
          Global Ecommerce       97   72   34%   36%
          Digital Commerce Total       $194   $184   6%   10%
                               
          EBIT                    
          Software Solutions       $15   $19   (23%)    
          Global Ecommerce       (1)   (1)   (83%)    
          Digital Commerce Total       $13   $18   (27%)    

Software Solutions

Revenue comparisons were adversely impacted by lower licensing revenue in the Americas when compared to the prior year, which included a large licensing deal. Excluding the impact of that deal, Software’s results were in-line with expectations as the business continues to acquire new enterprise clients through targeted industry and application-specific solutions. EBIT margin declined as a result of a lower amount of licensing revenue, which has a higher-margin.

Global Ecommerce

Results included a full quarter of revenue from Borderfree and the continued expansion of the eBay UK outbound cross-border service. Outbound package shipments from the U.S. continued to be pressured by the strong U.S. dollar. EBIT margin was impacted primarily by amortization of intangibles and investments related to the Borderfree acquisition, offsetting benefits from initial integration synergies.

Other

       
          ($ millions)       Third Quarter
                  2015   2014   Y/Y

Reported

  Y/Y

Ex Currency

          Revenue       $0   $37   NM   NM
          EBIT       $0   $8   NM    

The Other segment is comprised of the Imagitas marketing services business, which was sold in May 2015.

2015 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 and as more fully outlined in the Company's 2014 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission.

The Company expects improving trends in the business to continue into the fourth quarter as a result of actions taken to achieve its long-term strategic initiatives. The Company is reaffirming its annual adjusted EPS, GAAP EPS and free cash flow guidance. The Company is updating its annual revenue guidance based on year-to-date results and the outlook for the remainder of the year.

The Company now expects:

The Company still expects:

As a reminder, GAAP EPS guidance for the year includes the following:

This guidance excludes any unusual items that may occur or additional portfolio or restructuring actions, not specifically identified, as the Company implements plans to further streamline its operations and reduce costs.

Conference Call and Webcast

Management of Pitney Bowes will discuss the Company’s results in a broadcast over the Internet today at 8:00 a.m. ET. 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.

About Pitney Bowes

Pitney Bowes (NYSE: PBI) is a global technology company offering innovative products and solutions that enable commerce in the areas of customer information management, location intelligence, customer engagement, shipping and mailing, and global ecommerce. More than 1.5 million clients in approximately 100 countries around the world rely on products, solutions and services from Pitney Bowes. For additional information, visit Pitney Bowes at www.pitneybowes.com.

The Company's financial results are reported in accordance with generally accepted accounting principles (GAAP). The Company uses measures such as adjusted earnings before interest and taxes (EBIT), adjusted earnings per share, adjusted income from continuing operations and free cash flow to exclude the impact of special items like restructuring charges, tax adjustments, and goodwill and asset write-downs, because, while these are actual Company expenses, they can mask underlying trends associated with its business. Such items are often 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 provides investors insight into the amount of cash that management could have available for other discretionary uses. It adjusts GAAP cash from operations for capital expenditures, as well as special items like cash used for restructuring charges, unusual tax settlements or payments and contributions to its pension funds. Management uses segment EBIT to measure profitability and performance at the segment level. Segment EBIT is determined by deducting from revenue the related costs and expenses attributable to the segment. Segment EBIT excludes interest, taxes, general corporate expenses not allocated to a particular business segment, restructuring charges and goodwill and asset impairments, which are recognized on a consolidated basis. In addition, revenue growth is presented on a constant currency basis to exclude the impact of changes in foreign currency exchange rates since the prior period under comparison. 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 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.

This document contains “forward-looking statements” about the Company’s expected or potential future business and financial performance. Forward-looking statements include, but are not limited to, statements about its 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: mail volumes; the uncertain economic environment; timely development, market acceptance and regulatory approvals, if needed, of new products; fluctuations in customer demand; changes in postal regulations; interrupted use of key information systems; management of outsourcing arrangements; the implementation of a new enterprise resource planning system; changes in business portfolio; the success of our investment in rebranding the Company; the risk of customer concentration in our Digital Commerce Solutions group; integrating newly acquired businesses, including operations and product and service offerings; foreign currency exchange rates; changes in our credit ratings; management of credit risk; changes in interest rates; the financial health of national posts; and other factors beyond its control as more fully outlined in the Company's 2014 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 nine months ended September 30, 2015 and 2014, and consolidated balance sheets at September 30, 2015 and December 31, 2014 are attached.

Pitney Bowes Inc.
Consolidated Statements of Income

(Unaudited; in thousands, except per share data)

                   
                   
     

Three months ended

September 30,

 

Nine months ended

September 30,

      2015   2014   2015   2014
Revenue:                
  Equipment sales   $ 163,857     $ 177,458     $ 495,328     $ 558,032
  Supplies     71,174       72,548       215,178       228,349
  Software     97,700       112,271       283,241       312,891
  Rentals     108,420       119,047       333,729       365,069
  Financing     99,925       107,835       306,992       325,529
  Support services     136,820       154,321       415,615       470,763
  Business services     191,645       198,164       591,030       576,958
                   
  Total revenue     869,541       941,644       2,641,113       2,837,591
                   
Costs and expenses:                
  Cost of equipment sales     78,650       90,984       232,706       262,336
  Cost of supplies     21,629       22,470       65,912       70,129
  Cost of software     27,219       29,775       85,584       93,423
  Cost of rentals     21,423       23,636       63,127       74,273
  Financing interest expense     17,533       19,667       54,171       59,733
  Cost of support services     79,747       92,500       244,853       288,203
  Cost of business services     130,004       142,512       405,559       406,472
  Selling, general and administrative     309,211       341,738       939,318       1,031,497
  Research and development     29,153       26,060       83,693       80,901
  Restructuring charges and asset impairments, net     36       4,526       14,305       22,666
  Interest expense, net     20,165       22,158       65,200       67,704
  Other (income) expense, net     (1,781 )     (15,919 )     (94,916 )     45,738
                   
  Total costs and expenses     732,989       800,107       2,159,512       2,503,075
                   
Income from continuing operations before income taxes     136,552       141,537       481,601       334,516
                   
Provision for income taxes     42,676       25,310       145,574       79,681
                   
Income from continuing operations     93,876       116,227       336,027       254,835
                   
Income (loss) from discontinued operations, net of tax     -       20,655       (582 )     30,173
                   
Net income before attribution of noncontrolling interests     93,876       136,882       335,445       285,008
                   

Less: Preferred stock dividends of subsidiaries attributable to noncontrolling interests

    4,594       4,593       13,781       13,781
                   
Net income - Pitney Bowes Inc.   $ 89,282     $ 132,289     $ 321,664     $ 271,227
                   
                   
Amounts attributable to common stockholders:                
  Income from continuing operations   $ 89,282     $ 111,634     $ 322,246     $ 241,054
  Income (loss) from discontinued operations, net of tax     -       20,655       (582 )     30,173
                   
  Net income - Pitney Bowes Inc.   $ 89,282     $ 132,289     $ 321,664     $ 271,227
                   
Basic earnings per share attributable to common stockholders (1):                
  Continuing operations   $ 0.45     $ 0.55     $ 1.60     $ 1.19
  Discontinued operations     -       0.10       -       0.15
                   
  Net income - Pitney Bowes Inc.   $ 0.45     $ 0.65     $ 1.60     $ 1.34
                   
Diluted earnings per share attributable to common stockholders (1):                
  Continuing operations   $ 0.44     $ 0.55     $ 1.60     $ 1.18
  Discontinued operations     -       0.10       -       0.15
                   
  Net income - Pitney Bowes Inc.   $ 0.44     $ 0.65     $ 1.59     $ 1.33
                   
Weighted-average shares used in diluted EPS     201,016,809       203,968,557       201,884,967       203,959,978
                 

(1) The sum of the earnings per share amounts may not equal the totals due to rounding.

 
 

 

Pitney Bowes Inc.    
Consolidated Balance Sheets    

(Unaudited; in thousands, except per share data)

   
             

Assets

    September 30,

2015

 

December 31,

2014 (1)

Current assets:          
  Cash and cash equivalents     $ 715,976     $ 1,079,145  
  Short-term investments       34,318       32,121  
             
  Accounts receivable, gross       411,804       448,017  
  Allowance for doubtful accounts       (12,680 )     (10,742 )
  Accounts receivable, net       399,124       437,275  
             
  Short-term finance receivables       956,767       1,019,412  
  Allowance for credit losses       (16,143 )     (19,108 )
  Short-term finance receivables, net       940,624       1,000,304  
             
  Inventories       103,195       84,827  
  Current income taxes       33,057       40,542  
  Other current assets and prepayments       71,454       57,173  
  Assets held for sale       -       52,271  
             
Total current assets       2,297,748       2,783,658  
             
Property, plant and equipment, net       317,005       285,091  
Rental property and equipment, net       188,485       200,380  
             
Long-term finance receivables       774,690       828,723  
Allowance for credit losses       (6,551 )     (9,002 )
Long-term finance receivables, net       768,139       819,721  
             
Goodwill       1,753,888       1,672,721  
Intangible assets, net       192,318       82,173  
Non-current income taxes       70,731       96,377  
Other assets       553,467       569,110  
             
Total assets     $ 6,141,781     $ 6,509,231  
             

Liabilities, noncontrolling interests and stockholders' equity

         
Current liabilities:          
  Accounts payable and accrued liabilities     $ 1,379,337     $ 1,572,971  
  Current income taxes       79,689       90,167  
  Current portion of long-term debt and notes payable       521,091       324,879  
  Advance billings       353,467       386,846  
             
Total current liabilities       2,333,584       2,374,863  
             
Deferred taxes on income       131,416       64,839  
Tax uncertainties and other income tax liabilities       94,822       86,127  
Long-term debt       2,471,055       2,927,127  
Other non-current liabilities       672,507       682,646  
             
Total liabilities       5,703,384       6,135,602  
             
Noncontrolling interests (Preferred stockholders' equity in subsidiaries)       296,370       296,370  
             
Stockholders' equity:          
  Cumulative preferred stock, $50 par value, 4% convertible       1       1  
  Cumulative preference stock, no par value, $2.12 convertible       519       548  
  Common stock, $1 par value       323,338       323,338  
  Additional paid-in-capital       156,195       178,852  
  Retained earnings       5,106,214       4,897,708  
  Accumulated other comprehensive loss       (900,852 )     (846,156 )
  Treasury stock, at cost       (4,543,388 )     (4,477,032 )
             
Total Pitney Bowes Inc. stockholders' equity       142,027       77,259  
             
Total liabilities, noncontrolling interests and stockholders' equity     $ 6,141,781     $ 6,509,231  
           

 (1) Certain prior year amounts have been revised.

   
     
     

 

Pitney Bowes Inc.
Revenue and EBIT
Business Segments

(Unaudited; in thousands)

               
               
      Three Months Ended September 30,
              %
      2015   2014   Change
 

Revenue

           
               
  North America Mailing   $ 353,159     $ 363,285     (3 %)
  International Mailing     104,615       132,291     (21 %)
  Small & Medium Business Solutions     457,774       495,576     (8 %)
               
  Production Mail     101,646       113,497     (10 %)
  Presort Services     115,912       111,434     4 %
  Enterprise Business Solutions     217,558       224,931     (3 %)
               
  Software Solutions     97,638       112,006     (13 %)
  Global Ecommerce     96,571       71,870     34 %
  Digital Commerce Solutions     194,209       183,876     6 %
               
  Other     -       37,261     (100 %)
               
  Total revenue   $ 869,541     $ 941,644     (8 %)
               
 

EBIT(1)

           
               
  North America Mailing   $ 159,319     $ 159,638     (0 %)
  International Mailing     10,739       16,079     (33 %)
  Small & Medium Business Solutions     170,058       175,717     (3 %)
               
  Production Mail     12,401       9,570     30 %
  Presort Services     25,908       21,927     18 %
  Enterprise Business Solutions     38,309       31,497     22 %
               
  Software Solutions     14,613       18,921     (23 %)
  Global Ecommerce     (1,240 )     (676 )   (83 %)
  Digital Commerce Solutions     13,373       18,245     (27 %)
               
  Other     -       7,980     (100 %)
               
  Total EBIT     221,740       233,439     (5 %)
               
  Unallocated amounts:            
  Interest, net (2)     (37,698 )     (41,825 )    
  Corporate and other expenses     (49,235 )     (61,470 )    
  Restructuring charges and asset impairments, net     (36 )     (4,526 )    
  Other income, net     1,781       15,919      
               
  Income from continuing operations before income taxes   $ 136,552     $ 141,537      
(1)   Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges and other items, which are not allocated to a particular business segment.
(2)   Includes financing interest expense and interest expense, net.
     
     

 

Pitney Bowes Inc.
Revenue and EBIT
Business Segments

(Unaudited; in thousands)

               
               
      Nine Months Ended September 30,
              %
      2015   2014   Change
 

Revenue

           
               
  North America Mailing   $ 1,071,824     $ 1,115,506     (4 %)
  International Mailing     331,398       438,819     (24 %)
  Small & Medium Business Solutions     1,403,222       1,554,325     (10 %)
               
  Production Mail     298,880       330,469     (10 %)
  Presort Services     351,365       339,206     4 %
  Enterprise Business Solutions     650,245       669,675     (3 %)
               
  Software Solutions     282,916       312,200     (9 %)
  Global Ecommerce     249,923       204,399     22 %
  Digital Commerce Solutions     532,839       516,599     3 %
               
  Other     54,807       96,992     (43 %)
               
  Total revenue   $ 2,641,113     $ 2,837,591     (7 %)
               
 

EBIT(1)

           
               
  North America Mailing   $ 482,376     $ 476,757     1 %
  International Mailing     36,585       67,347     (46 %)
  Small & Medium Business Solutions     518,961       544,104     (5 %)
               
  Production Mail     31,461       27,865     13 %
  Presort Services     76,946       68,235     13 %
  Enterprise Business Solutions     108,407       96,100     13 %
               
  Software Solutions     34,904       30,620     14 %
  Global Ecommerce     9,962       9,100     9 %
  Digital Commerce Solutions     44,866       39,720     13 %
               
  Other     10,569       13,965     (24 %)
               
  Total EBIT     682,803       693,889     (2 %)
               
  Unallocated amounts:            
  Interest, net (2)     (119,371 )     (127,437 )    
  Corporate and other expenses     (151,959 )     (163,532 )    
  Restructuring charges and asset impairments, net     (14,305 )     (22,666 )    
  Other income (expense), net     94,916       (45,738 )    
  Acquisition related compensation expense     (10,483 )     -      
               
  Income from continuing operations before income taxes   $ 481,601     $ 334,516      
(1)   Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges and other items, which are not allocated to a particular business segment.
(2)   Includes financing interest expense and interest expense, net.
     
     

 

Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted Results
(Unaudited; in thousands, except per share data)
                 
                 
   

Three Months Ended September 30,

  Nine Months Ended September 30,
    2015   2014   2015   2014
                 
Income from continuing operations                
after income taxes, as reported:   $ 89,282     $ 111,634     $ 322,246     $ 241,054  
Restructuring charges and asset impairments, net     47       2,903       8,607       15,161  
Gain on sale of Imagitas     30       -       (88,399 )     -  
Acquisition and disposition transaction costs     5,323       -       11,428       -  
Legal settlement     (370 )     -       4,250       -  
Acquisition related compensation expense     -       -       7,246       -  
Investment divestiture     (7,756 )     (9,774 )     (7,756 )     (9,774 )
Extinguishment of debt     -       -       -       37,833  
Income from continuing operations                
after income taxes, as adjusted:   $ 86,556     $ 104,763     $ 257,622     $ 284,274  
                 
                 
Diluted earnings per share from                
continuing operations, as reported:   $ 0.44     $ 0.55     $ 1.60     $ 1.18  
Restructuring charges and asset impairments, net     -       0.01       0.04       0.07  
Gain on sale of Imagitas     -       -       (0.44 )     -  
Acquisition and disposition transaction costs     0.03       -       0.06       -  
Legal settlement     -       -       0.02       -  
Acquisition related compensation expense     -       -       0.04       -  
Investment divestiture     (0.04 )     (0.05 )     (0.04 )     (0.05 )
Extinguishment of debt     -       -       -       0.19  
Diluted earnings per share from continuing                
operations, as adjusted:   $ 0.43     $ 0.51     $ 1.28     $ 1.39  
                 
                 
Net cash provided by operating activities,                
as reported:   $ 150,384     $ 116,985     $ 350,715     $ 397,432  
Capital expenditures     (40,708 )     (48,920 )     (129,643 )     (121,270 )
Restructuring payments     15,281       8,621       46,056       42,151  
(Receipts) payments related to investment divestiture     (5,773 )     53,738       20,602       53,738  
Reserve account deposits     (4,166 )     (12,563 )     (25,630 )     (15,919 )
Acquisition related compensation payment     -       -       10,483       -  
Tax payment related to sale of Imagitas     15,918       -       15,918       -  
Cash transaction fees related to acquisitions                
and dispositions     -       -       11,116       -  
Extinguishment of debt     -       -       -       61,657  
                 
Free cash flow, as adjusted:   $ 130,936     $ 117,861     $ 299,617     $ 417,789  
                                 

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

 
 

 

Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted Results
(Unaudited; in thousands)
                   
                   
      Three Months Ended September 30,   Nine Months Ended September 30,
      2015   2014   2015   2014
                   
GAAP income from continuing operations                
after income taxes, as reported   $ 89,282     $ 111,634     $ 322,246     $ 241,054  
Restructuring charges and asset impairments, net     47       2,903       8,607       15,161  
Gain on sale of Imagitas     30       -       (88,399 )     -  
Acquisition and disposition transaction costs     5,323       -       11,428       -  
Legal settlement     (370 )     -       4,250       -  
Acquisition related compensation expense     -       -       7,246       -  
Investment divestiture     (7,756 )     (9,774 )     (7,756 )     (9,774 )
Extinguishment of debt     -       -       -       37,833  
Income from continuing operations                
after income taxes, as adjusted     86,556       104,763       257,622       284,274  
Provision for income taxes, as adjusted     43,657       20,788       140,070       104,865  
Preferred stock dividends of subsidiaries                
attributable to noncontrolling interests     4,594       4,593       13,781       13,781  
Income from continuing operations                
before income taxes, as adjusted     134,807       130,144       411,473       402,920  
Interest, net     37,698       41,825       119,371       127,437  
Adjusted EBIT     172,505       171,969       530,844       530,357  
Depreciation and amortization     42,333       49,643       127,486       142,506  
Adjusted EBITDA   $ 214,838     $ 221,612     $ 658,330     $ 672,863