Pitney Bowes Inc. (NYSE: PBI), a global technology company
providing innovative technology solutions to power commerce, today
reported financial results for the full year and the fourth quarter
2017. The Company has also provided annual guidance for 2018.
Full Year 2017:
- Revenue of $3.5 billion, an increase of
4 percent versus prior year largely driven by the Newgistics
acquisition
- GAAP EPS of $1.39; Adjusted EPS of
$1.41
- GAAP cash from operations of $496
million; free cash flow of $384 million
- Total debt increased $465 million
versus prior year, which was largely attributable to the Newgistics
acquisition
Fourth Quarter 2017:
- Revenue of $1.0 billion, an increase of
18 percent as reported and 17 percent at constant currency versus
prior year
- GAAP EPS of $0.48; Adjusted EPS of
$0.40
- GAAP cash from operations of $165
million; free cash flow of $145 million
- Acquired Newgistics for $475 million;
transaction closed on October 2, 2017
- Redeemed $350 million of debt prior to
the scheduled maturity in May 2018
“For the fourth quarter and full year, we moved our company to
growth,” said Marc Lautenbach, President and CEO. “We saw our full
year revenue grow in four out of our six segments and our total
revenue showed positive growth on both a reported basis and
excluding the impact of the Newgistics acquisition.
Lautenbach continued: “Pitney Bowes is a different company today
than it was five years ago. Our strategy is working and the
investments we have made for the long-term across all of our
businesses are paying off. While we are pleased with the progress
we are making, there is more to do to transform our Company and
unlock shareholder value.”
Full Year 2017 Results
Revenue totaled $3.5 billion, an increase of 4 percent versus
prior year.
GAAP earnings per diluted share (GAAP EPS) were $1.39, which
included $0.21 for restructuring and asset impairments charges,
$0.03 for transaction costs, a $0.01 loss for the extinguishment of
debt and a $0.03 gain from the sale of technology.
GAAP EPS also included an estimated one-time, non-cash net
benefit of $39 million, or $0.21 per share, recorded on the
provision for income tax line related to the enactment of the Tax
Cuts and Jobs Act of 2017 (Tax Legislation). This net benefit is
comprised of a $130 million benefit related to the remeasurement of
net U.S. deferred tax liabilities arising from a lower U.S.
corporate tax rate offset by an estimated one-time tax charge of
$91 million related primarily to a U.S. tax on the unremitted
earnings of the Company’s foreign subsidiaries.
Adjusted earnings per diluted share (Adjusted EPS) were $1.41.
The Company’s tax rate on adjusted earnings was 24.2 percent for
the year.
GAAP cash from operations was $496 million and free cash flow
was $384 million. During the year, the Company used cash to return
$139 million in dividends to shareholders and to pay $41 million
for restructuring payments.
Fourth Quarter 2017 Results
Revenue totaled $1.0 billion, which was an increase of 18
percent as reported and 17 percent at constant currency versus
prior year.
Digital Commerce Solutions revenue grew 86 percent as reported
and 84 percent at constant currency. Enterprise Business Solutions
revenue increased 10 percent as reported and 8 percent at constant
currency. Small and Medium Business (SMB) Solutions revenue
declined 5 percent as reported and 7 percent at constant
currency.
GAAP EPS were $0.48, which included $0.10 for restructuring
charges related to the Company’s additional $200 million gross
spend reduction initiatives, which will occur over the next 2
years, $0.01 for transaction costs, a $0.01 loss for the
extinguishment of debt and a net benefit of $0.21 due to Tax
Legislation.
Adjusted EPS were $0.40.
GAAP cash from operations was $165 million and free cash flow
was $145 million. Compared to the prior year, free cash flow
decreased by $19 million primarily due to lower adjusted net
income. During the quarter, the Company used cash to return $35
million in dividends to shareholders and to pay $11 million for
restructuring payments.
The Company’s earnings per share results for the fourth quarter
and full year are summarized in the table below:
Fourth Quarter* Full
Year* 2017 2016
2017 2016
GAAP EPS $0.48
($0.45) $1.39
$0.49 Discontinued operations - loss
- - -
$0.01
GAAP EPS from continuing operations
$0.48 ($0.45) $1.39 $0.51 Tax
Legislation ($0.21) - ($0.21) - Restructuring charges and asset
impairments, net $0.10 $0.05 $0.21 $0.22 Transaction costs $0.01 -
$0.03 - Loss on extinguishment of debt $0.01 - $0.01 - Gain on sale
of technology - - ($0.03) - Goodwill impairment charge - $0.90 -
$0.89 Preferred stock redemption - $0.01 - $0.03 Impact of
divestiture transactions - $0.01
- $0.02
Adjusted EPS
$0.40 $0.53 $1.41 $1.68
* The sum of the earnings per share may not equal the totals
above due to rounding.
Fourth Quarter 2017 Business Segment Reporting
The Company’s business reporting groups reflect the clients
served in each market and the way it manages its business segments.
The reporting groups are SMB Solutions; Enterprise Business
Solutions; and Digital Commerce Solutions. The results for each
segment within the group may not equal the subtotals for the group
due to rounding.
SMB Solutions offers mailing and office shipping solutions,
financing, services, and supplies for small and medium businesses
to help simplify and save on the sending, tracking and receiving of
letters, parcels and flats. This group includes the North America
Mailing and International Mailing segments.
Enterprise Business Solutions includes the Production Mail and
Presort Services segments. Production Mail provides mailing and
printing equipment and services for large enterprise clients to
process mail. Presort Services provides sortation services to
qualify large mail and parcel volumes for postal worksharing
discounts.
Digital Commerce Solutions includes the Software Solutions and
Global Ecommerce segments. Software Solutions provide customer
engagement, customer information and location intelligence
software. Global Ecommerce facilitates global cross-border
ecommerce transactions and domestic retail and ecommerce shipping
solutions, including fulfillment and returns.
SMB Solutions Group
($ millions) Fourth Quarter
Revenue
2017
2016
Y/Y
Reported
Y/Y
Ex
Currency
North America Mailing $340 $363 (6%) (7%) International Mailing
102
102
(1%)
(7%)
SMB Solutions $441 $465 (5%)
(7%) EBIT North America Mailing
$128
$143 (11%) International Mailing
12
12
2%
SMB Solutions $140 $155 (10%)
North America Mailing
Equipment sales grew largely due to performance of the new
SendPro C-Series product, but was partially offset by lower
tabletop inserter sales. Recurring revenue streams declined,
largely around financing, rentals and service revenues. EBIT margin
was lower than prior year largely due to the decline in recurring
revenue streams.
International Mailing
Revenue declined primarily due to lower equipment sales.
Equipment sales declined in the UK and the Nordics and was
partially offset by growth in Australia and Japan. EBIT margin
increased slightly from prior year due to lower expenses.
Enterprise Business Solutions
Group
($ millions) Fourth Quarter
Revenue
2017
2016
Y/Y
Reported
Y/Y
Ex
Currency
Production Mail $128 $115 11% 8% Presort Services
128
118
8%
8%
Enterprise Business $256 $233 10%
8% EBIT Production Mail $19 $19 2% Presort
Services
28
26
8%
Enterprise Business $47 $45 6%
Production Mail
Equipment sales grew double-digits versus prior year largely due
to higher print and sorter equipment placements. EBIT margin
declined from prior year primarily as a result of the mix of
products within equipment sales.
Presort Services
Revenue growth was driven by improved revenue per piece along
with higher First Class mail, parcel and flats volumes processed,
but partly offset by lower Standard Class mail volumes processed.
EBIT margin was relatively flat to prior year.
Digital Commerce Solutions
Group
($ millions) Fourth Quarter
Revenue
2017
2016
Y/Y
Reported
Y/Y
Ex
Currency
Software Solutions $88 $91 (3%) (5%) Global Ecommerce
263
98
169%
168%
Digital Commerce $352 $189 86%
84% EBIT Software Solutions $10 $12 (15%)
Global Ecommerce
-
6
(100%)
Digital Commerce $10 $18 (42%)
Software Solutions
Revenue declined driven by lower license and service revenues,
but was partially offset by growth in SaaS and data revenues. The
decline in license revenue was primarily in Location Intelligence
and Customer Information Management and partially offset by growth
in Customer Engagement Solutions. The indirect channel continued to
show growth. EBIT margin decreased from prior year largely driven
by the lower revenue.
Global Ecommerce
Results included a full quarter of revenue from Newgistics.
Newgistics exceeded expectations on volumes processed in the
quarter and delivered strong revenue growth over its prior year
results.
Excluding Newgistics, the segment continued to generate
double-digit revenue growth, which was driven by strong performance
in both cross border retail and marketplace volumes along with
domestic shipping. The domestic shipping increase is driven by
Complete™ Delivery, which is an end-to-end carrier service enabled
by the Company’s shipping API’s. EBIT margin declined from prior
year largely due to investments in market growth opportunities as
well as the amortization of acquisition-related intangible
assets.
2018 Guidance
The Company expects for the full year 2018:
- Revenue, on a constant currency basis,
to be in the range of 9 percent to 13 percent growth, when compared
to 2017.
- Adjusted EPS to be in the range of
$1.40 to $1.55.
- Free cash flow to be in the range of
$350 million to $400 million.
As a result of the Tax Legislation, the Company expects its
annual tax rate on adjusted earnings to be in the range of 23
percent to 27 percent, or relatively flat to 2017. In addition to
the lower tax rate, the Company also expects to repatriate cash and
will use the cash to pay down debt.
The impact of Tax Legislation consists of preliminary estimates
and is subject to change. Information regarding the impact of Tax
Legislation is based on current calculations and interpretations,
as well as assumptions and expectations relating to Tax
Legislation, which are subject to further guidance and change.
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 2018 will not change
significantly.
Review of Strategic Alternatives
The Pitney Bowes Board of Directors, together with management,
continues 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.
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 net income
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 and the impact of Tax
Legislation. 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:
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, and the market’s acceptance
of these new products and services; our ability to fully utilize
the enterprise business platform in North America, 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; changes in, or loss of,
our contractual relationships with the United States Postal
Service; 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;
any potential impact from the announcement that the Board is
conducting a review of strategic alternatives 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 twelve months ended December 31, 2017 and
2016, and consolidated balance sheets as of December 31, 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 December 31,
Twelve months ended December 31,
2017 2016 2017
2016 Revenue: Equipment sales $ 200,555 $ 190,306 $ 679,803
$ 675,451 Supplies 64,482 64,051 252,824 262,682 Software 88,464
90,901 352,595 348,661 Rentals 94,578 103,032 386,348 412,738
Financing 80,834 89,632 331,416 366,547 Support services 123,911
129,188 478,536 512,820 Business services 396,293
219,959 1,068,426 827,676
Total revenue 1,049,117 887,069
3,549,948 3,406,575 Costs and expenses: Cost
of equipment sales 108,347 96,201 340,745 331,942 Cost of supplies
22,785 20,758 82,992 81,420 Cost of software 26,153 26,345 101,969
105,841 Cost of rentals 21,214 21,089 84,270 76,040 Financing
interest expense 12,219 13,866 50,665 55,241 Cost of support
services 71,744 70,895 288,976 295,685 Cost of business services
302,162 151,152 773,052 568,509 Selling, general and administrative
329,570 283,882 1,237,739 1,200,327 Research and development 32,896
31,545 129,767 121,306 Goodwill impairment - 171,092 - 171,092
Restructuring charges and asset impairments, net 28,929 13,793
59,431 63,296 Interest expense, net 31,620 26,576 113,497 88,970
Other expense, net 3,856 - 3,856
536 Total costs and expenses 991,495
927,194 3,266,959 3,160,205
Income (loss) before income taxes 57,622 (40,125 )
282,989 246,370 (Benefit) provision for income taxes (32,326
) 38,204 21,649 131,819
Income (loss) from continuing operations 89,948 (78,329 ) 261,340
114,551 Loss from discontinued operations, net of tax -
(750 ) - (2,701 ) Net income
(loss) 89,948 (79,079 ) 261,340 111,850 Less: Preferred
stock dividends attributable to noncontrolling interests -
5,264 - 19,045 Net
income (loss) - Pitney Bowes Inc. $ 89,948 $ (84,343 ) $
261,340 $ 92,805 Amounts attributable to common
stockholders: Net income (loss) from continuing operations $ 89,948
$ (83,593 ) $ 261,340 $ 95,506 Loss from discontinued operations,
net of tax - (750 ) - (2,701 )
Net income (loss) - Pitney Bowes Inc. $ 89,948 $
(84,343 ) $ 261,340 $ 92,805 Basic earnings (loss)
per share attributable to common stockholders (1): Continuing
operations $ 0.48 $ (0.45 ) $ 1.40 $ 0.51 Discontinued operations
- - - (0.01 ) Net
income (loss) - Pitney Bowes Inc. $ 0.48 $ (0.45 ) $ 1.40 $
0.49 Diluted earnings (loss) per share attributable
to common stockholders (1): Continuing operations $ 0.48 $ (0.45 )
$ 1.39 $ 0.51 Discontinued operations - -
- (0.01 ) Net income (loss) - Pitney
Bowes Inc. $ 0.48 $ (0.45 ) $ 1.39 $ 0.49
Weighted-average shares used in diluted earnings per share
188,046,578 185,645,814 187,435,080
188,975,198
(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
December 31,
2017
December 31,
2016
Current assets: Cash and cash equivalents $ 1,009,021 $ 764,522
Short-term investments 48,988 38,448 Accounts receivable, net
524,424 455,527 Short-term finance receivables, net 828,003 893,950
Inventories 89,679 92,726 Current income taxes 58,439 11,373 Other
current assets and prepayments 77,954 68,637
Total current assets 2,636,508 2,325,183
Property, plant and equipment, net 379,044 314,603 Rental property
and equipment, net 185,741 188,054 Long-term finance receivables,
net 652,087 673,207 Goodwill 1,952,444 1,571,335 Intangible assets,
net 272,186 165,172 Noncurrent income taxes 59,909 74,806 Other
assets 540,796 524,773 Total
assets $ 6,678,715 $ 5,837,133
Liabilities and
stockholders' equity (deficit)
Current liabilities: Accounts payable and accrued liabilities $
1,487,575 $ 1,378,822 Current income taxes 8,823 34,434 Current
portion of long-term debt 271,057 614,485 Advance billings
288,372 299,878 Total current
liabilities 2,055,827 2,327,619 Deferred taxes on income
236,974 204,289 Tax uncertainties and other income tax liabilities
116,551 61,276 Long-term debt 3,559,278 2,750,405 Other noncurrent
liabilities 515,549 597,204
Total liabilities 6,484,179 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 441 483 Common stock, $1 par value
323,338 323,338 Additional paid-in-capital 138,367 148,125 Retained
earnings 5,229,584 5,107,734 Accumulated other comprehensive loss
(786,198 ) (940,133 ) Treasury stock, at cost (4,710,997 )
(4,743,208 ) Total Pitney Bowes Inc. stockholders'
equity (deficit) 194,536 (103,660 )
Total liabilities and stockholders' equity (deficit) $ 6,678,715
$ 5,837,133
Pitney Bowes Inc.
Business Segments - Revenue and
EBIT
(Unaudited; in thousands)
Three months ended December 31,
Twelve months ended December
31, 2017
2016 (1)
% Change 2017
2016 (1)
% Change
Revenue
North America Mailing $ 339,921 $ 362,638 (6 %) $ 1,356,561
$ 1,427,094 (5 %) International Mailing 101,520
102,345 (1 %) 383,670 411,642
(7 %)
Small & Medium Business Solutions
441,441 464,983 (5 %) 1,740,231
1,838,736 (5 %) Production Mail 128,282
115,054 11 % 407,194 404,703 1 % Presort Services 127,698
118,368 8 % 497,901
475,582 5 %
Enterprise Business Solutions
255,980 233,422 10 % 905,095
880,285 3 % Software Solutions 88,293 90,817
(3 %) 352,380 348,234 1 % Global Ecommerce 263,403
97,847
>100%
552,242 339,320 63 %
Digital
Commerce Solutions 351,696 188,664
86 % 904,622 687,554 32 %
Total revenue $ 1,049,117 $ 887,069 18 % $
3,549,948 $ 3,406,575 4 %
EBIT
North America Mailing $ 128,147 $ 143,282 (11 %) $ 497,809 $
592,978 (16 %) International Mailing 12,197
11,964 2 % 48,164 44,806 7 %
Small & Medium Business Solutions 140,344
155,246 (10 %) 545,973 637,784
(14 %) Production Mail 18,998 18,627 2 % 50,513
54,061 (7 %) Presort Services 28,045 25,953
8 % 97,506 95,258 2 %
Enterprise Business Solutions 47,043
44,580 6 % 148,019 149,319 (1 %)
Software Solutions 10,419 12,251 (15 %) 41,635 30,159 38 %
Global Ecommerce (5 ) 5,651 (100 %)
(17,899 ) 3,043 >(100%)
Digital Commerce
Solutions 10,414 17,902 (42 %)
23,736 33,202 (29 %)
Segment
EBIT (2) $ 197,801 $ 217,728 (9 %) $
717,728 $ 820,305 (13 %)
Reconciliation of segment EBIT to net income (loss)
Segment EBIT $ 197,801 $ 217,728 $ 717,728 $ 820,305
Corporate expenses (60,073 ) (30,679 )
(204,211 ) (189,215 )
Adjusted EBIT 137,728 187,049
513,517 631,090 Interest, net (3) (43,839 ) (40,442 ) (164,162 )
(144,211 ) Goodwill impairment - (171,092 ) - (171,092 )
Restructuring charges and asset impairments, net (28,929 ) (13,793
) (59,431 ) (63,296 ) Loss on extinguishment of debt (3,856 ) -
(3,856 ) - Impact of divestiture transactions - (1,847 ) - (6,121 )
Transaction costs (3,482 ) - (9,164 ) - Gain on sale of technology
- - 6,085 -
Income (loss) before income taxes 57,622 (40,125 ) 282,989
246,370 Benefit (provision) for income taxes 32,326
(38,204 ) (21,649 ) (131,819 )
Income
(loss) from continuing operations 89,948 (78,329 ) 261,340
114,551 Loss from discontinued operations, net of tax -
(750 ) - (2,701 )
Net income
(loss) $ 89,948 $ (79,079 ) $ 261,340 $ 111,850
(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 December 31,
Twelve months ended December
31, 2017 2016
Y/Y Chg. 2017 2016 Y/Y
Chg. Reconciliation of reported revenue to revenue
excluding currency Revenue, as reported $ 1,049,117 $ 887,069 $
3,549,948 $ 3,406,575 (Favorable) unfavorable impact on revenue due
to currency (14,469 ) 1,222
Revenue, excluding currency $ 1,034,648 $
887,069 17 % $ 3,551,170 $ 3,406,575 4 %
Reconciliation of reported net income (loss) to
adjusted earnings Net income (loss) $ 89,948 $ (79,079 ) $
261,340 $ 111,850 Loss from discontinued operations, net of tax -
750 - 2,701 Restructuring charges and asset impairments, net 19,599
9,945 39,671 42,343 Goodwill impairment - 169,024 - 169,024 Gain on
sale of technology - - (5,605 ) - Impact of divestiture
transactions - 1,194 - 4,099 Transaction costs 2,178 - 5,762 - Loss
on extinguishment of debt 2,375 - 2,375 - Tax legislation (38,774 )
- (38,774 ) - Preferred stock redemption -
(2,047 ) - 2,800 Net income, as
adjusted 75,326 99,787 264,769 332,817 Provision for income taxes,
as adjusted 18,563 46,820 84,586
154,062 Income from continuing operations
before income taxes, as adjusted 93,889 146,607 349,355 486,879
Interest, net 43,839 40,442
164,162 144,211 EBIT, as adjusted 137,728
187,049 513,517 631,090 Depreciation and amortization 50,347
38,261 182,336 178,486
EBITDA, as adjusted $ 188,075 $ 225,310 $
695,853 $ 809,576
Reconciliation of reported diluted
earnings per share to adjusted diluted earnings (loss) per
share
Diluted earnings (loss) per share $ 0.48 $ (0.45 ) $ 1.39 $ 0.49
Loss from discontinued operations, net of tax - 0.00 - 0.01
Restructuring charges and asset impairments, net 0.10 0.05 0.21
0.22 Goodwill impairment - 0.90 - 0.89 Gain on sale of technology -
- (0.03 ) - Impact of divestiture transactions - 0.01 - 0.02
Transaction costs 0.01 - 0.03 - Loss on extinguishment of debt 0.01
- 0.01 - Tax legislation (0.21 ) - (0.21 ) - Preferred stock
redemption - 0.01 -
0.03 Diluted earnings per share, as adjusted $ 0.40
$ 0.53 $ 1.41 $ 1.68
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) $ 165,236 $ 199,763 $
495,813 $ 496,122 Capital expenditures (51,428 ) (45,299 ) (170,990
) (160,831 ) Restructuring payments 10,828 13,769 40,804 64,930
Pension contribution - - - 36,731 Reserve account deposits 13,462
(3,996 ) 10,954 (2,183 ) Other 7,396 -
7,396 335 Free cash flow $ 145,494
$ 164,237 $ 383,977 $ 435,104
(1)
Net cash provided by operating activities
for the three and twelve months ended December 31, 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/20180131005274/en/
Pitney Bowes Inc.EditorialBill Hughes, 203-351-6785Chief
Communications OfficerorFinancialAdam David, 203-351-7175VP,
Investor Relations
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