Pitney Bowes Inc. (NYSE:PBI), a global technology company
providing innovative technology solutions to power commerce, today
reported financial results for the third quarter 2017.
Quarterly Financial Results:
- Revenue of $843 million, flat versus
prior year.
- GAAP EPS of $0.31; Adjusted EPS of
$0.33.
- GAAP cash from operations of $146
million; free cash flow of $109 million.
- The Company is increasing its annual
revenue guidance range to reflect the Newgistics acquisition.
- The Company is lowering its annual
guidance range for adjusted EPS and free cash flow.
- The Company is announcing a $200
million spend reduction program over the next 2 years.
- The Board of Directors has initiated a
review of strategic alternatives for the Company to enhance
shareholder value.
Transaction Completed and Debt Management:
- Acquired Newgistics for $475 million;
transaction closed on October 2, 2017.
- Issued $400 million of 5 year notes,
$300 million of 3 year notes and borrowed $350 million in term
loans.
- The Company redeemed its September 2017
notes for $385 million. In October 2017, the Company also redeemed
its May 2018 notes for $350 million.
“Our third quarter revenue performance was largely in-line with
our expectations; however our bottom line results fell short as we
continued to realign our businesses to higher growth areas and
invest in new business opportunities, products and solutions,” said
Marc B. Lautenbach, President and CEO, Pitney Bowes. “During the
third quarter, we validated that the next chapter of revenue growth
will come from shipping, parcels and address verification, all of
which transcends our entire business. And while I was disappointed
in our financial results in the third quarter, I am encouraged
about our path forward as we continue to transform our
company.”
Lautenbach continued: “We have made substantial progress against
our strategic objectives over the past four years and remain
committed to improving margins and driving efficiencies throughout
the business by deploying a $200 million spend reduction program.
The recent acquisition of Newgistics repositions the portfolio
towards growth. With the Board of Directors and management team
continuing to focus on enhancing shareholder value, we believe now
is the time to explore a broad range of strategic alternatives that
may have the potential to further unlock shareholder value.”
Third Quarter 2017 Results
Revenue totaled $843 million for the quarter, which was flat
versus prior year.
Digital Commerce Solutions revenue grew 19 percent and
Enterprise Business Solutions revenue increased 1 percent. Small
and Medium Business (SMB) Solutions revenue declined 7 percent as
reported and 8 percent at constant currency.
GAAP earnings per diluted share (GAAP EPS) were $0.31, which
included $0.02 for transaction costs related to the Newgistics
acquisition as well as $0.01 for restructuring charges. Adjusted
earnings per diluted share (Adjusted EPS) were $0.33.
The Company’s earnings per share results for the third quarter
are summarized in the table below:
Third Quarter*
2017
2016
GAAP EPS $0.31 $0.35 Transaction costs $0.02 -
Restructuring charges and asset impairments, net $0.01 $0.06 Tax
adjustment – preferred stock redemption -
$0.03
Adjusted EPS $0.33
$0.44 * The sum of the earnings per share may not
equal the totals above due to rounding.
GAAP Cash from Operations and Free Cash Flow Results
GAAP cash from operations during the quarter was $146 million
and free cash flow was $109 million. Compared to the prior year,
free cash flow decreased by $11 million primarily due to lower net
income offset by favorable working capital, specifically within
accounts payable and accrued liabilities. During the quarter, the
Company used cash to pay down $385 million of debt, return $35
million in dividends to shareholders and pay $11 million for
restructuring payments.
Debt Management
During the quarter, the Company issued $400 million 5 year fixed
rate notes, $300 million 3 year fixed rate notes and borrowed $350
million in term loans. The Company used these proceeds together
with cash on-hand to fund the Newgistics acquisition and redeem
$385 million notes due September 2017. In October 2017, the Company
also redeemed the $350 million notes that would have come due in
May 2018.
Third Quarter 2017 Business Segment Reporting
The Company’s business segment reporting reflects the clients
served in each market and the way it manages these segments. The
reporting segment groups are the SMB Solutions group; the
Enterprise Business Solutions group; and the Digital Commerce
Solutions group. The segment results for the quarter and prior year
may not equal the subtotals for each segment group due to
rounding.
The SMB Solutions group offers mailing and office shipping
solutions, financing, services, and supplies for small and medium
businesses to help simplify and save on the sending, tracking and
receiving of letters, parcels and flats. This group includes the
North America Mailing and International Mailing segments.
The Enterprise Business Solutions group includes the global
Production Mail and Presort Services segments. Production Mail
provides mailing and printing equipment and services for large
enterprise clients to process mail. Presort Services provides
sortation services to qualify large mail and parcel volumes for
postal worksharing discounts.
The Digital Commerce Solutions group includes the Software
Solutions and Global Ecommerce segments. Software Solutions provide
customer engagement, customer information and location intelligence
software. Global Ecommerce facilitates global cross-border
ecommerce transactions and domestic retail and ecommerce shipping
solutions.
SMB Solutions Group
($ millions) Third Quarter
Revenue
2017
2016
Y/YReported
Y/YEx Currency
North America Mailing $320 $350 (9%) (9%) International Mailing
94 97 (3%) (5%)
SMB Solutions $414 $447 (7%)
(8%) EBIT North America Mailing $108 $142
(24%) International Mailing
9 9
(5%) SMB Solutions $117 $151
(23%)
North America Mailing
The Company successfully launched the new SendPro C-Series
product line in early September, and as such recognized less than a
month of equipment sales from this new product during the quarter.
Equipment sales declined largely due to lower sales in the top of
the line products, where prior year included a large deal, and this
year, a few deals did not close in the quarter. In addition, North
America Mailing realized a lower level of client lease extensions,
which impacted equipment sales. Recurring revenue streams declined,
largely around lower rentals and financing revenue. EBIT margin was
lower than prior year largely due to the decline and mix of
equipment sales along with the decline in recurring streams.
International Mailing
Revenue declined largely due to lower recurring revenue streams.
Equipment sales were relatively flat driven by growth in France and
the UK, and offset primarily by weakness in Italy and Japan. EBIT
margin decreased slightly from prior year.
Enterprise Business Solutions
Group
($ millions) Third Quarter
Revenue
2017
2016
Y/YReported
Y/YEx Currency
Production Mail $104 $106 (2 %) (3 %) Presort Services
119 114 4 %
4 % Enterprise Business
$223 $220 1 % 1 %
EBIT Production Mail $15 $16 (5 %) Presort Services
19 19 2 %
Enterprise Business $34 $35 (1
%)
Production Mail
Equipment sales declined versus prior year largely due to lower
inserter equipment placements, which were partially offset by
higher print equipment sales. Support services revenue was slightly
favorable, but offset by a decline in Supplies revenue. EBIT margin
declined from prior year primarily as a result of the decline in
revenue and the mix of equipment sales.
Presort Services
Revenue growth was driven by improved revenue per piece along
with higher Standard Class mail and Parcel volumes processed, but
partly offset by lower First Class mail volumes. EBIT margin
declined slightly from prior year driven by increased mail
processing costs and investments in the Company’s new parcel
sortation capabilities.
Digital Commerce Solutions
Group
($ millions) Third Quarter
Revenue
2017
2016
Y/YReported
Y/YEx Currency
Software Solutions $99 $89 12 % 11 % Global Ecommerce
106 83 28
% 28 % Digital
Commerce $206 $172 19 % 19
% EBIT Software Solutions $21 $10
> 100
%
Global Ecommerce
(10 ) 2
> (100
%)
Digital Commerce $11 $12 (5 %)
Software Solutions
Revenue growth was driven by higher license revenue, primarily
in Location Intelligence and Customer Information Management.
License revenue also benefited from a large Location Intelligence
deal that closed in the quarter. The Company is continuing to see
progress in developing the indirect channel which showed solid
growth. EBIT margin increased from prior year largely driven by the
higher licensing revenue.
Global Ecommerce
The sustained double-digit revenue growth was driven by strong
performance in all of the cross-border geographies, as well as
growth in domestic shipping. The domestic shipping increase is
driven by end-to-end carrier services enabled by the Company’s
shipping API’s. The EBIT loss was driven primarily by investments
in market growth opportunities as well as the resolution of a
vendor contractual dispute and a specific marketing program with a
cross-border client. The Company continues to invest in its
cross-border solutions and domestic shipping capabilities.
2017 Guidance
The Company is increasing its annual guidance range for revenue
and lowering its annual guidance range for adjusted EPS and free
cash flow.
The Company’s guidance for the full year 2017 is now expected to
be:
- Revenue, on a constant currency basis,
to be in the range of 3 percent to 5 percent growth, when compared
to 2016. This has been updated from the previous range of flat to 1
percent as a result of the revenue expected from Newgistics in the
fourth quarter.
- Adjusted EPS to be in the range of
$1.38 to $1.46. This has been updated from the previous range of
$1.70 to $1.78.
- Free cash flow to be in the range of
$350 million to $380 million. This has been updated from the
previous range of $400 million to $430 million.
The Company is lowering its annual tax range on adjusted
earnings. The Company now expects to be in the range of 28 percent
to 30 percent as compared to the previous range of 31 percent to 33
percent.
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 2016 Form 10-K Annual Report and other
reports filed with the Securities and Exchange Commission.
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. Revenue guidance is provided on a
constant currency basis. The Company cannot reasonably predict the
impact that future changes in currency exchange rates will have on
revenue and net income. Additionally, the Company cannot provide
GAAP EPS and GAAP cash from operations guidance due to the
uncertainty of future potential restructurings, goodwill and asset
write-downs, unusual tax settlements or payments and contributions
to its pension funds, acquisitions, divestitures and other
potential adjustments, which could (individually or in the
aggregate) have a material impact on the Company’s performance. The
Company’s guidance is based on an assumption that the global
economy and foreign exchange markets in 2017 will not change
significantly.
Review of Strategic Alternatives
The Pitney Bowes Board of Directors, together with management,
is conducting a process to explore and evaluate strategic
alternatives to further enhance shareholder value. The Board has
not set a timetable for the process nor has it made any decisions
related to any strategic alternatives at this time. There can be no
assurance that the exploration of strategic alternatives will
result in any particular outcome. The Company does not intend to
provide updates unless or until it determines that further
disclosure is appropriate or necessary.
The company has retained Lazard as its financial advisor and
Cravath, Swaine & Moore LLP as its legal advisor to assist in
the process.
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.pitneybowes.com.
About Pitney Bowes
Pitney Bowes (NYSE:PBI) is a global technology company powering
billions of transactions – physical and digital – in the connected
and borderless world of commerce. Clients around the world,
including 90 percent of the Fortune 500, rely on products,
solutions, services and data from Pitney Bowes in the areas of
customer information management, location intelligence, customer
engagement, shipping, mailing, and global ecommerce. And with the
innovative Pitney Bowes Commerce Cloud, clients can access the
broad range of Pitney Bowes solutions, analytics, and APIs to drive
commerce. For additional information visit Pitney Bowes, the
Craftsmen of Commerce, at www.pitneybowes.com.
Use of Non-GAAP Measures
The Company's financial results are reported in accordance with
generally accepted accounting principles (GAAP); however, in our
disclosures we use certain non-GAAP measures, such as adjusted
earnings before interest and taxes, Adjusted EPS, revenue growth on
a constant currency basis, free cash flow and Segment EBIT.
The Company reports measures such as adjusted earnings before
interest and taxes (EBIT) and Adjusted EPS and adjusted income from
continuing operations to exclude the impact of special items like
restructuring charges, tax adjustments, goodwill and asset
write-downs, and costs related to dispositions and acquisitions.
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.
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.
Constant currency is calculated by converting our current quarter
reported results using the prior year’s exchange rate for the
comparable quarter. This comparison allows an investor insight into
the underlying revenue performance of the business and true
operational performance from a comparable basis to prior period. A
reconciliation of reported revenue to constant currency revenue can
be found in the Company’s attached financial schedules.
The Company reports free cash flow in order to provide investors
insight into the amount of cash that management could have
available for other discretionary uses. Free cash flow adjusts GAAP
cash from operations for capital expenditures, restructuring
payments, unusual tax settlements, contributions to the Company’s
pension fund and cash used for other special items. A
reconciliation of GAAP cash from operations to free cash flow can
be found in the Company’s attached financial schedules.
In addition, 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. A reconciliation of
Segment EBIT to the Company’s total Net Income can be found in the
Company’s attached financial schedules.
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,
including statements about the potential outcome of the Board’s
exploration of strategic alternatives. 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 announcement that the Board is conducting a
review of strategic alternatives and the potential impact of such
announcement on the Company’s current or potential customers,
partners and personnel; the cost of the review process and the
disruption the process may have on the Company’s operations,
including the diversion of the attention of the Company’s
management and employees; declining physical mail volumes;
competitive factors, including pricing pressures, technological
developments, the introduction of new products and services by
competitors, and fuel prices; our success in developing new
products and services, including digital-based products and
services, obtaining regulatory approvals, if needed, of new
products if required, and the market’s acceptance of these new
products and services; our ability to fully utilize the enterprise
business platform in North America implemented in 2016, and
successfully deploy it in major international markets without
significant disruptions to existing operations; a breach of
security, including a cyberattack or other comparable event; the
continued availability and security of key information technology
systems and the cost to comply with information security
requirements and privacy laws; changes in postal or banking
regulations; the risk of losing large clients in the Global
Ecommerce segment; macroeconomic factors, including global and
regional business conditions that adversely impact customer demand,
foreign currency exchange rates, interest rates and labor
conditions; capital market disruptions or credit rating downgrades
that adversely impact our ability to access capital markets at
reasonable costs; management of outsourcing arrangements;
integrating newly acquired businesses, including operations and
product and service offerings; management of customer credit risk;
and other factors beyond its control as more fully outlined in the
Company's 2016 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 months and nine months ended September 30, 2017 and
2016, and consolidated balance sheets as of September 30, 2017 and
December 31, 2016 are attached.
Pitney Bowes Inc. Consolidated Statements of
Income (Unaudited; in thousands, except share and per share
amounts)
Three months ended September
30, Nine months ended September 30, 2017
2016 2017 2016 Revenue:
Equipment sales $ 157,649 $ 173,143 $ 479,248 $ 485,145 Supplies
58,296 61,306 188,342 198,631 Software 99,600 89,087 264,131
257,760 Rentals 95,901 102,747 291,770 309,706 Financing 81,184
87,883 250,582 276,915 Support services 120,479 123,954 354,625
383,632 Business services 229,711 200,911
672,133 607,717 Total revenue
842,820 839,031 2,500,831 2,519,506
Costs and expenses: Cost of equipment sales 85,647
86,147 232,398 235,741 Cost of supplies 18,827 20,348 60,207 60,662
Cost of software 25,713 25,698 75,816 79,496 Cost of rentals 20,818
16,041 63,056 54,951 Financing interest expense 12,629 12,965
38,446 41,375 Cost of support services 70,688 74,799 217,232
224,790 Cost of business services 166,984 140,989 470,890 417,357
Selling, general and administrative 304,398 300,983 908,169 916,981
Research and development 32,057 28,680 96,871 89,761 Restructuring
charges and asset impairments, net 1,493 16,494 30,502 49,503
Interest expense, net 28,601 22,294
81,877 62,394 Total costs and expenses
767,855 745,438 2,275,464 2,233,011
Income before income taxes 74,965 93,593 225,367
286,495 Provision for income taxes 17,607 23,197
53,975 93,615 Income from
continuing operations 57,358 70,396 171,392 192,880 Loss from
discontinued operations, net of tax ― (291 ) ― (1,951
) Net income 57,358 70,105 171,392 190,929 Less: Preferred
stock dividends attributable to noncontrolling interests ―
4,593 ― 13,781 Net income - Pitney
Bowes Inc. $ 57,358 $ 65,512 $ 171,392 $ 177,148
Amounts attributable to common stockholders: Net income from
continuing operations $ 57,358 $ 65,803 $ 171,392 $ 179,099 Loss
from discontinued operations, net of tax ― (291 ) ―
(1,951 ) Net income - Pitney Bowes Inc. $ 57,358 $ 65,512
$ 171,392 $ 177,148 Basic earnings per share
attributable to common stockholders (1): Continuing operations $
0.31 $ 0.35 $ 0.92 $ 0.95 Discontinued operations ― ― ―
(0.01 ) Net income - Pitney Bowes Inc. $ 0.31 $ 0.35
$ 0.92 $ 0.94 Diluted earnings per share
attributable to common stockholders (1): Continuing operations $
0.31 $ 0.35 $ 0.92 $ 0.94 Discontinued operations ― ― ―
(0.01 ) Net income - Pitney Bowes Inc. $ 0.31 $ 0.35
$ 0.92 $ 0.93 Weighted-average shares used in
diluted earnings per share 187,756,543 186,682,575
187,200,225 189,592,489
(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 share amounts)
Assets
September 30,
2017
December 31,
2016
Current assets: Cash and cash equivalents $ 1,696,903 $ 764,522
Short-term investments 45,508 38,448 Accounts receivable, net
408,886 455,527 Short-term finance receivables, net 826,122 893,950
Inventories 118,282 92,726 Current income taxes 42,605 11,373 Other
current assets and prepayments 82,251 68,637
Total current assets 3,220,557 2,325,183
Property, plant and equipment, net 338,340 314,603 Rental property
and equipment, net 185,866 188,054 Long-term finance receivables,
net 650,793 673,207 Goodwill 1,616,968 1,571,335 Intangible assets,
net 145,376 165,172 Noncurrent income taxes 77,188 74,806 Other
assets 546,319 524,773 Total
assets $ 6,781,407 $ 5,837,133
Liabilities and
stockholders' equity (deficit)
Current liabilities: Accounts payable and accrued liabilities $
1,348,395 $ 1,378,822 Current income taxes 13,542 34,434 Current
portion of long-term debt 620,256 614,485 Advance billings
282,537 299,878 Total current
liabilities 2,264,730 2,327,619 Deferred taxes on income
257,987 204,289 Tax uncertainties and other income tax liabilities
39,671 61,276 Long-term debt 3,562,672 2,750,405 Other noncurrent
liabilities 555,514 597,204
Total liabilities 6,680,574 5,940,793
Stockholders' equity (deficit): Cumulative preferred stock,
$50 par value, 4% convertible 1 1 Cumulative preference stock, no
par value, $2.12 convertible 457 483 Common stock, $1 par value
323,338 323,338 Additional paid-in-capital 133,394 148,125 Retained
earnings 5,174,602 5,107,734 Accumulated other comprehensive loss
(818,484 ) (940,133 ) Treasury stock, at cost (4,712,475 )
(4,743,208 ) Total Pitney Bowes Inc. stockholders'
equity (deficit) 100,833 (103,660 )
Total liabilities and stockholders' equity (deficit) $ 6,781,407
$ 5,837,133
Pitney Bowes Inc.
Business Segments - Revenue and
EBIT
(Unaudited; in thousands)
Three months ended
September 30, Nine months ended September 30,
2017
2016 (1)
% Change 2017
2016 (1)
% Change
Revenue
North America Mailing $ 319,966 $ 349,785 (9 %) $ 1,016,640
$ 1,064,456 (4 %) International Mailing 93,770
96,730 (3 %) 282,150 309,297 (9
%)
Small & Medium Business Solutions 413,736
446,515 (7 %) 1,298,790
1,373,753 (5 %) Production Mail 104,387 106,350 (2 %)
278,912 289,649 (4 %) Presort Services 119,074
114,053 4 % 370,203 357,214 4 %
Enterprise Business Solutions 223,461
220,403 1 % 649,115 646,863
―
%
Software Solutions 99,442 89,031 12 % 264,087 257,417 3 %
Global Ecommerce 106,181 83,082 28 %
288,839 241,473 20 %
Digital
Commerce Solutions 205,623 172,113
19 % 552,926 498,890 11 %
Total revenue $ 842,820 $ 839,031
―
%
$ 2,500,831 $ 2,519,506 (1 %)
EBIT
North America Mailing $ 107,777 $ 141,968 (24 %) $ 369,662 $
449,696 (18 %) International Mailing 8,729
9,198 (5 %) 35,967 32,842 10 %
Small & Medium Business Solutions 116,506
151,166 (23 %) 405,629 482,538
(16 %) Production Mail 14,920 15,696 (5 %) 31,515
35,434 (11 %) Presort Services 19,474 19,181
2 % 69,461 69,305
―
%
Enterprise Business Solutions 34,394
34,877 (1 %) 100,976 104,739 (4
%) Software Solutions 20,912 10,329
>100
%
31,216 17,908 74 % Global Ecommerce (9,594 ) 1,544
>(100
%)
(17,894 ) (2,608 )
>(100
%)
Digital Commerce Solutions 11,318
11,873 (5 %) 13,322 15,300 (13
%)
Segment EBIT (2) $ 162,218 $ 197,916
(18 %) $ 519,927 $ 602,577 (14 %)
Reconciliation of segment EBIT to net income
Segment EBIT $ 162,218 $ 197,916 $ 519,927 $ 602,577
Corporate expenses (38,848 ) (51,992 )
(144,138 ) (158,536 )
Adjusted EBIT 123,370 145,924
375,789 444,041 Interest, net (3) (41,230 ) (35,259 ) (120,323 )
(103,769 ) Restructuring charges and asset impairments, net (1,493
) (16,494 ) (30,502 ) (49,503 ) Gain on sale of technology ― ―
6,085 ― Acquisition/disposition related expenses (5,682 )
(578 ) (5,682 ) (4,274 )
Income before
income taxes 74,965 93,593 225,367 286,495 Provision for income
taxes (17,607 ) (23,197 ) (53,975 )
(93,615 )
Income from continuing operations 57,358 70,396
171,392 192,880 Loss from discontinued operations, net of tax ―
(291 ) ― (1,951 )
Net income $
57,358 $ 70,105 $ 171,392 $ 190,929
(1) Prior period amounts have been recast to conform
to the current year presentation. (2) Segment EBIT excludes
interest, taxes, general corporate expenses, restructuring charges,
and other items that are not allocated to a particular business
segment. (3) 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 amounts)
Three months ended
Nine months ended
September 30,
September 30, 2017 2016
Y/Y Chg. 2017 2016
Y/Y Chg. Reconciliation of reported revenue
to revenue excluding currency Revenue, as reported $ 842,820 $
839,031 $ 2,500,831 $ 2,519,506 Unfavorable impact on revenue due
to currency (4,476 ) 15,690
Revenue, excluding currency $ 838,344
$ 839,031
―%
$ 2,516,521 $ 2,519,506 ―%
Reconciliation of reported net income to adjusted earnings
Net income $ 57,358 $ 70,105 $ 171,392 $ 190,929 Loss from
discontinued operations, net of tax ― 291 ― 1,951 Restructuring
charges and asset impairments, net 969 10,840 20,073 32,399 Gain on
sale of technology ― ― (5,605 ) ― Acquisition/disposition related
expenses 3,583 365 3,583 2,904 Tax cost - preferred stock
redemption ― 4,847 ― 4,847
Net income, as adjusted 61,910 86,448 189,443 233,030
Provision for income taxes, as adjusted 20,230
24,217 66,023 107,242 Income
from continuing operations before income taxes, as adjusted 82,140
110,665 255,466 340,272 Interest, net 41,230
35,259 120,323 103,769 EBIT, as
adjusted 123,370 145,924 375,789 444,041 Depreciation and
amortization 43,829 50,687
131,989 140,225 EBITDA, as adjusted $ 167,199
$ 196,611 $ 507,778 $ 584,266
Reconciliation of reported diluted earnings per share to
adjusted diluted earnings per share Diluted earnings per share
$ 0.31 $ 0.35 $ 0.92 $ 0.93 Loss from discontinued operations, net
of tax
―
― ― 0.01 Restructuring charges and asset impairments, net 0.01 0.06
0.11 0.17 Gain on sale of technology
―
― (0.03 ) ― Acquisition/disposition related expenses 0.02 ― 0.02
0.01 Tax cost - preferred stock redemption
―
0.03 ― 0.03 Diluted
earnings per share, as adjusted $ 0.33 $ 0.44 $ 1.01
$ 1.16
Note: The sum of the earnings
per share amounts may not equal the totals due to rounding.
Reconciliation of reported net cash from operating
activities to free cash flow Net cash provided by operating
activities (1) $ 145,930 $ 137,775 $ 330,577 $ 296,359 Capital
expenditures (42,941 ) (44,173 ) (119,562 ) (115,532 )
Restructuring payments 10,960 17,295 29,976 51,161 Pension
contribution ― ― ― 36,731 Reserve account deposits (5,022 ) 8,956
(2,508 ) 1,813 Other ― ― ― 335
Free cash flow $ 108,927 $ 119,853 $ 238,483 $
270,867
(1)
Net cash provided by operating activities
for the three and nine months ended September 30, 2016 has been
revised for a new accounting standard adopted January 1, 2017.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171101005226/en/
Pitney BowesEditorial -Bill Hughes, 203-351-6785Chief
Communications OfficerorFinancial -Adam David, 203-351-7175VP,
Investor Relations
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