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 2016.
Quarterly Financial Results:
- Revenue of $839 million, a decline of 4
percent; a decline of 2 percent when adjusted for the impact of
currency and market exits.
- GAAP EPS of $0.35; Adjusted EPS of
$0.44.
- GAAP cash from operations of $137
million; free cash flow of $119 million.
- Issued $600 million of 5 year notes and
is redeeming the Pitney Bowes International Holdings, Inc.
preferred stock of $300 million.
- The Company expects to be at the
low-end of its annual guidance range for revenue and adjusted
earnings per share.
“We continued to make progress against our strategic initiatives
to transform Pitney Bowes,” said Marc B. Lautenbach, President and
Chief Executive Officer. “Our new enterprise business platform,
which was deployed in the second quarter, continues to provide
operational benefits, while our new products and solutions
introduced in the second and third quarter tied to the Pitney Bowes
Commerce Cloud are resonating well with our clients and gaining
traction.
“In the third quarter, our Global Ecommerce business turned in
another strong performance and our Production Mail business
delivered a solid equipment sales performance,” Lautenbach
continued. “While we continue to make progress in building out our
partner channel in our Software Solutions business by adding new
Regional System Integrators and Location Intelligence partners in
the third quarter, license revenue fell short of our expectations.
In our Small and Medium Business, equipment sales rebounded after
the deployment of our enterprise business platform, but there were
some lingering effects that impacted our stream revenues. That
said, we are confident that the actions we have put in place in the
third quarter will begin to yield better results in the fourth
quarter and throughout 2017.”
Third Quarter 2016 Results
Revenue totaled $839 million for the quarter, which was a
decline of 4 percent versus prior year. Revenue declined 3 percent
versus the prior year when adjusted for the impact of currency and
declined 2 percent when adjusted for both the impact of currency
and previously exited direct operations (market exits) in Mexico,
South Africa and five markets in Asia.
Digital Commerce Solutions revenue declined 1 percent on a
reported basis and grew 2 percent on a constant currency basis.
Double-digit revenue growth in ecommerce marketplace and retail was
offset by a decline in Software Solutions and office shipping
revenues.
Enterprise Business Solutions revenue grew 1 percent. Revenue
grew 2 percent compared to the prior year when adjusted for the
impacts of currency and grew 4 percent when adjusted for currency
and market exits. Revenue benefited from growth in Production
Mail.
Small and Medium Business (SMB) Solutions revenue declined 7
percent. Revenue declined 6 percent when adjusted for the impacts
of currency and market exits. SMB equipment sales revenue declined
1 percent globally and also within the North America Mailing
segment. The North America Mailing segment’s revenue performance
improved from last quarter, but is not yet fully back to the stream
revenue run-rate established prior to the implementation of the new
enterprise business platform. The Company expects stream revenue
related to financing fees and supplies to improve from current
levels.
Generally Accepted Accounting Principles earnings per diluted
share (GAAP EPS) were $0.35, which included $0.06 per share for
restructuring charges and a $0.03 per share charge from the
announced redemption of the preferred stock of the Company’s Pitney
Bowes International Holdings subsidiary.
Adjusted earnings per diluted share from continuing operations
(Adjusted EPS) were $0.44. The Company uses Adjusted EPS to
measure profitability and performance.
Earnings per share were favorably impacted by $0.07 per share,
principally related to the resolution of tax examinations, which
resulted in a lower tax rate on adjusted earnings this quarter of
21.9 percent. Including the tax benefits this quarter, the annual
tax rate on adjusted earnings is expected to be at the low-end of
the Company’s annual range.
The Company’s earnings per share results for the quarter are
summarized in the table below:
Third Quarter*
2016
2015
Adjusted EPS $ 0.44 $ 0.43
Restructuring and asset impairments ($0.06 ) - Tax adjustment –
preferred stock redemption ($0.03 ) - Net tax impact from
transactions - $ 0.01
GAAP EPS
$ 0.35 $ 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 $137 million
while free cash flow was $119 million. In comparison to the prior
year, free cash flow declined due to timing of accounts
payable.
During the quarter, the Company used cash to pay $35 million in
dividends to common shareholders, $25 million for the Maponics
acquisition and $17 million for restructuring payments.
Debt Management
During the quarter, the Company issued $600 million of 3.375
percent 5-year fixed rate notes. The issuance will be a debt
neutral transaction as the Company paid down commercial paper
outstanding during the quarter and is redeeming all $300 million of
outstanding shares of the Pitney Bowes International Holdings
preferred stock on November 1, 2016.
Business Segment Reporting
The Company’s business segment reporting reflects the clients
served in each market and the way it manages these segments for
growth and profitability. The reporting segment groups are the SMB
Solutions group; the Enterprise Business Solutions group; and the
Digital Commerce Solutions group. The segment results for the
quarter and prior year may not equal the subtotals for each segment
group due to rounding.
The SMB Solutions group offers mailing equipment, financing,
services and supplies for small and medium businesses to
efficiently create mail and evidence postage. This group includes
the North America Mailing and International Mailing segments. North
America Mailing includes the operations of U.S. and Canada Mailing.
International Mailing includes all other SMB operations around the
world.
The Enterprise Business Solutions group includes the global
Production Mail and Presort Services segments. Production Mail
provides mailing and printing equipment and services for large
enterprise clients to process mail. Presort Services provides
sortation services to qualify large mail volumes for postal
worksharing discounts.
The Digital Commerce Solutions group includes the Software
Solutions and Global Ecommerce segments. Software Solutions provide
customer engagement, customer information and location intelligence
software. Global Ecommerce facilitates global cross-border
ecommerce transactions and shipping solutions for businesses of all
sizes.
SMB Solutions Group
($ millions) Third Quarter
Revenue
2016
2015
Y/YReported
Y/YEx
Currency
Y/Y Ex Currency&
Market Exits*
North America Mailing $ 330 $ 353 (7 %) (7 %) (7 %) International
Mailing
96 105
(9 %) (5 %)
(3 %)
SMB Solutions Total
$ 426 $ 458 (7 %)
(6 %) (6 %) EBIT North
America Mailing $ 139 $ 159 (13 %) International Mailing
10 11 (9
%) SMB Solutions Total $ 148
$ 170 (13 %) * Excluding $3.1 million
related to the impacts of currency and $2.2 million related to the
divested revenues resulting from the exit of direct operations in
Mexico, South Africa and five markets in Asia.
North America Mailing
The revenue decline rate for the quarter was an improvement
compared to the second quarter, which was impacted by the
enterprise business platform cut-over. Equipment sales declined 1
percent compared to prior year, returning to levels similar to the
pre-go-live of the new platform. Recurring revenue streams declined
at a high single-digit rate largely driven by lower
financing-related fees and supplies revenues. EBIT margin was lower
than prior year due to the decline in high margin recurring revenue
streams.
International Mailing
Excluding the effects from currency and market exits, revenue
declined at a low single-digit rate and equipment sales were flat
to prior year. Equipment sales benefited from growth most notably
in France, Italy and Japan, but were mostly offset by a decline in
the UK. Recurring revenue streams declined largely driven by
supplies and rental revenues. EBIT margin was relatively flat
versus the prior year. The decline in high-margin recurring revenue
streams was offset by lower operating expenses.
Enterprise Business Solutions Group
($ millions) Third Quarter
Revenue
2016
2015
Y/YReported
Y/YEx
Currency
Y/Y Ex Currency&
Market Exits*
Production Mail $ 106 $ 102 5 % 5 % 11 % Presort Services
114 116 (2
%) (2 %) (2
%) Enterprise Business Total $
220 $ 218 1 % 2 %
4 % EBIT Production Mail $ 16 $ 12 27 %
Presort Services
19 26
(26 %) Enterprise Business Total
$ 35 $ 38 (9 %) *
Excluding $0.5 million related to the impacts of currency and $5.0
million related to the divested revenues resulting from the exit of
direct operations in Mexico, South Africa and five markets in Asia
Production Mail
Equipment sales grew 27 percent over prior year on higher
sorter, inserter and print equipment placements due to a number of
larger client installations in the quarter. Support services
revenue declined as a result of a continuing trend in the shift
from in-house mail production to third party service bureaus who
tend to self-service, as well as reduced service revenue associated
with the market exits. EBIT margin improved from prior year driven
by service delivery cost management initiatives and lower sales and
marketing costs.
Presort Services
The average revenue per piece of mail processed declined as a
result of the rate change earlier this year and some recently
signed lower-margin deals, impacting both revenue and EBIT margin.
The segment experienced higher labor costs, which also impacted
EBIT margin in the quarter.
Digital Commerce Solutions Group
($ millions) Third Quarter
Revenue
2016
2015
Y/YReported
Y/YEx
Currency
Software Solutions $ 89 $ 98 (9 %) (6 %) Global Ecommerce
104 97 8
% 10 % Digital Commerce
Total $ 193 $ 194 (1
%) 2 % EBIT Software Solutions $
10 $ 15 (29 %) Global Ecommerce
4
(1 )
>100
% Digital Commerce Total $ 15
$ 13 10 %
Software Solutions
The revenue decline was driven by lower Customer Information
Management and Location Intelligence license revenues but benefited
by growth in Customer Engagement Software licenses. While the
Company continues to make good progress in expanding the indirect
channel and training partner sales and technical resources, it will
take time before results reflect substantial revenue from
partner-led deals. The Company continues to focus on improving
direct sales efficiency to grow the license revenue pipeline. EBIT
margin declined as a result of the lower licensing revenue.
Global Ecommerce
This quarter represents the first quarter of the Borderfree
acquisition fully reported in both periods. Ecommerce marketplace
and retail revenues grew 17 percent from prior year excluding the
impacts of currency on strong growth in UK outbound. U.S. outbound
marketplace grew despite a stronger U.S. dollar versus prior year,
as well as some temporary disruption on demand for parcel shipments
from the U.S. to Canada prior to the resolution of a Canada Post
labor dispute. The revenue growth was partially offset by a decline
in domestic office shipping.
EBIT margin increased versus the prior year due to synergy
savings and revenue growth. The Company remains on-track to achieve
its cross border synergy run-rate objective from the acquisition of
Borderfree. This was partially offset by a decline in higher-
margin domestic office shipping.
2016 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 2015 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 because the Company cannot reasonably
predict the impact future changes in currency exchange rates will
have on revenue. 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 2016 will not change significantly.
The Company expects improving trends in the business in the
fourth quarter as a result of actions taken to achieve its long
term strategic initiatives. These initiatives include the initial
benefits of the implementation of the enterprise business platform,
new product introductions and continued enhancement of the channel
strategy, which will benefit the fourth quarter, with increasing
contribution into 2017.
For 2016, the Company expects to be at the low-end of its annual
guidance range for revenue and adjusted earnings per share. The
Company’s guidance for the full year 2016:
- Revenue, on a constant currency basis,
to be in the range of a 1 percent decline to 3 percent decline when
compared to 2015.
- Adjusted EPS to be in the range of
$1.75 to $1.82. Adjusted EPS guidance excludes the year-to-date
charge of $0.22 per share primarily related to restructuring and
asset impairments.
- Free cash flow to be in the range of
$400 million to $450 million.
The Company is hosting its annual Analyst Day on December 6th in
New York City. At that time, the Company will provide an update on
its strategy.
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 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 and services 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, revenue excluding the impact of currency
and market exits, 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 recent dispositions and market
exits. 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. In addition, this quarter the Company reported
the comparison of “revenue excluding the impact of currency and
market exits” to prior year, which excludes the impact of changes
in foreign currency exchange rates since the prior period and also
excludes the revenues associated with the recent market exits in
several smaller markets. 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, as
well as reported revenue to “revenue excluding the impact of
currency and market exits” 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.
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; the ability to protect
the Company’s information technology systems against service
interruptions, misappropriation of data, or breaches of security
resulting from cyber-attacks or other events; management of
outsourcing arrangements; the implementation of a new enterprise
business platform; changes in business portfolio; the success of
our investment in rebranding the Company; the risk of losing some
of the Company’s larger clients in the Global Ecommerce segment;
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;
increased customs and regulatory risks associated with cross-border
transactions; and other factors beyond its control as more fully
outlined in the Company's 2015 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, 2016 and 2015,
and consolidated balance sheets at September 30, 2016 and December
31, 2015 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, 2016
2015 2016 2015 Revenue: Equipment sales
$ 173,143 $ 163,857 $ 485,145 $ 495,328 Supplies 61,306 71,174
198,631 215,178 Software 89,087 97,700 257,760 283,241 Rentals
102,747 108,420 309,706 333,729 Financing
87,883
99,925 276,915 306,992 Support services 123,954 136,820 383,632
415,615 Business services 200,911 191,645
607,717 591,030 Total
revenue 839,031 869,541
2,519,506 2,641,113 Costs and expenses:
Cost of equipment sales 86,147 78,650 235,741 232,706 Cost of
supplies 20,348 21,629 60,662 65,912 Cost of software 25,698 27,219
79,496 85,584 Cost of rentals 16,041 21,423 54,951 63,127 Financing
interest expense 12,965 17,533 41,375 54,171 Cost of support
services 74,799 79,747 224,790 244,853 Cost of business services
140,989 130,004 417,357 405,559 Selling, general and administrative
300,983 309,211 916,445 939,318 Research and development 28,680
29,153 89,761 83,693 Restructuring charges and asset impairments,
net 16,494 36 49,503 14,305 Interest expense, net 22,294 20,165
62,394 65,200 Other (income) expense, net -
(1,781 ) 536 (94,916 ) Total costs and
expenses 745,438 732,989
2,233,011 2,159,512 Income from
continuing operations before income taxes 93,593 136,552 286,495
481,601 Provision for income taxes 23,197
42,676 93,615 145,574
Income from continuing operations 70,396 93,876 192,880 336,027
Loss from discontinued operations, net of tax (291 )
- (1,951 ) (582 ) Net income 70,105
93,876 190,929 335,445 Less: Preferred stock dividends attributable
to noncontrolling interests 4,593 4,594
13,781 13,781 Net income -
Pitney Bowes Inc. $ 65,512 $ 89,282 $ 177,148
$ 321,664 Amounts attributable to common
stockholders: Net income from continuing operations $ 65,803 $
89,282 $ 179,099 $ 322,246 Loss from discontinued operations, net
of tax (291 ) - (1,951 ) (582 )
Net income - Pitney Bowes Inc. $ 65,512 $ 89,282
$ 177,148 $ 321,664
Basic earnings per share attributable to
common stockholders (1):
Continuing operations $ 0.35 $ 0.45 $ 0.95 $ 1.60 Discontinued
operations 0.00 - (0.01 )
- Net income - Pitney Bowes Inc. $ 0.35 $ 0.45
$ 0.94 $ 1.60
Diluted earnings per share attributable to
common stockholders (1):
Continuing operations $ 0.35 $ 0.44 $ 0.94 $ 1.60 Discontinued
operations 0.00 - (0.01 )
- Net income - Pitney Bowes Inc. $ 0.35 $ 0.44
$ 0.93 $ 1.59 Weighted-average shares
used in diluted earnings per share 186,682,575
201,016,809 189,592,489 201,884,967
(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 30,2016
December 31,2015
(1)
Current assets: Cash and cash equivalents $ 992,089 $ 650,557
Short-term investments 24,259 117,021 Accounts receivable, net
435,015 476,583 Short-term finance receivables, net 862,797 918,383
Inventories 108,766 88,824 Current income taxes 13,060 6,584 Other
current assets and prepayments 65,622 67,400
Total current assets 2,501,608 2,325,352
Property, plant and equipment, net 312,597 330,088 Rental property
and equipment, net 179,554 177,515 Long-term finance receivables,
net 704,294 760,657 Goodwill 1,766,418 1,745,957 Intangible assets,
net 174,221 187,378 Noncurrent income taxes 66,547 70,294 Other
assets 553,635 525,891 Total
assets $ 6,258,874 $ 6,123,132
Liabilities,
noncontrolling interests and stockholders' equity
Current liabilities: Accounts payable and accrued liabilities $
1,307,808 $ 1,448,321 Current income taxes 19,170 16,620 Current
portion of long-term debt and notes payable 535,289 461,085 Advance
billings 303,153 353,025 Total
current liabilities 2,165,420 2,279,051 Deferred taxes on
income 229,998 205,668 Tax uncertainties and other income tax
liabilities 57,423 68,429 Long-term debt 2,831,767 2,489,583 Other
noncurrent liabilities 547,444 605,310
Total liabilities 5,832,052 5,648,041
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 489
505 Common stock, $1 par value 323,338 323,338 Additional
paid-in-capital 149,997 161,280 Retained earnings 5,226,894
5,155,537 Accumulated other comprehensive loss (825,962 ) (888,635
) Treasury stock, at cost (4,744,305 ) (4,573,305 )
Total Pitney Bowes Inc. stockholders' equity 130,452
178,721 Total liabilities,
noncontrolling interests and stockholders' equity $ 6,258,874
$ 6,123,132 (1) Certain prior year
amounts have been revised for accounting rules that became
effective January 1, 2016 and to conform to current year
presentation.
Pitney Bowes Inc. Business
Segments - Revenue and EBIT (Unaudited; in thousands)
Three months ended September 30, Nine
months ended September 30, 2016 2015
% Change 2016 2015 %
Change
Revenue
North America Mailing $ 329,995 $ 353,159 (7 %) $ 1,001,789
$ 1,071,824 (7 %) International Mailing 95,628
104,615 (9 %) 305,725 331,398 (8
%)
Small & Medium Business Solutions 425,623
457,774 (7 %) 1,307,514
1,403,222 (7 %) Production Mail 106,350 101,646 5 %
289,649 298,880 (3 %) Presort Services 114,053
115,912 (2 %) 357,214 351,365 2
%
Enterprise Business Solutions 220,403
217,558 1 % 646,863 650,245 (1
%) Software Solutions 89,031 97,638 (9 %) 257,417 282,916 (9
%) Global Ecommerce 103,974 96,571 8 %
307,712 249,923 23 %
Digital
Commerce Solutions 193,005 194,209
(1 %) 565,129 532,839 6 % Other
- - - - 54,807 (100 %)
Total revenue $ 839,031 $ 869,541 (4 %) $
2,519,506 $ 2,641,113 (5 %)
EBIT
(1)
North America Mailing $ 138,588 $ 159,319 (13 %) $ 436,730 $
482,376 (9 %) International Mailing 9,733
10,739 (9 %) 34,365 36,585 (6 %)
Small & Medium Business Solutions 148,321
170,058 (13 %) 471,095 518,961
(9 %) Production Mail 15,696 12,401 27 % 35,434
31,461 13 % Presort Services 19,181 25,908
(26 %) 69,305 76,946 (10 %)
Enterprise Business Solutions 34,877
38,309 (9 %) 104,739 108,407 (3
%) Software Solutions 10,329 14,613 (29 %) 17,908 34,904 (49
%) Global Ecommerce 4,389 (1,240 ) >100%
8,835 9,962 (11 %)
Digital Commerce
Solutions 14,718 13,373 10 %
26,743 44,866 (40 %) Other - - - -
10,569 (100 %)
Segment
EBIT $ 197,916 $ 221,740 (11 %) $ 602,577
$ 682,803 (12 %)
Reconciliation of segment
EBIT to net income Segment EBIT $ 197,916 $
221,740 $ 602,577 $ 682,803 Corporate expenses (51,992 )
(49,235 ) (158,536 ) (151,959 )
Adjusted
EBIT 145,924 172,505 444,041 530,844 Interest, net (2) (35,259
) (37,698 ) (103,769 ) (119,371 ) Restructuring charges and asset
impairments, net (16,494 ) (36 ) (49,503 ) (14,305 ) Other income
(expense), net - 1,781 (536 ) 94,916 Acquisition/disposition
related expenses (578 ) - (3,738 )
(10,483 )
Income from continuing operations before income
taxes 93,593 136,552 286,495 481,601 Provision for income taxes
(23,197 ) (42,676 ) (93,615 ) (145,574
)
Income from continuing operations 70,396 93,876 192,880
336,027 Loss from discontinued operations, net of tax (291 )
- (1,951 ) (582 )
Net income $
70,105 $ 93,876 $ 190,929 $ 335,445
(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 amounts)
Three
months ended September 30, Nine months ended
September 30, 2016 2015 Y/Y
Chg. 2016 2015 Y/Y Chg.
Reconciliation of reported revenue to
revenue excluding currencyand Market Exits
Revenue, as reported $ 839,031 $ 869,541 (4%) $ 2,519,506 $
2,641,113 (5%) Unfavorable impact on revenue due to currency
8,436 -
NM
23,157 - NM Revenue, excluding currency
847,467 869,541 (3%) 2,542,663 2,641,113 (4%) Less revenue from
Market Exits (1,164 ) (8,352 ) NM (3,703 )
(19,894 ) NM Revenue, excluding currency and Market Exits $
846,303 $ 861,189 (2%) $ 2,538,960 $ 2,621,219
(3%)
Reconciliation of reported net income
to adjusted earnings Net income $ 70,105 $ 93,876 $ 190,929 $
335,445 Loss from discontinued operations, net of tax 291 - 1,951
582 Restructuring charges and asset impairments, net 10,840 47
32,399 8,607 Loss (gain) on disposition of businesses 275 30 2,698
(88,399 ) Transaction costs related to acquisitions and
dispositions 90 5,323 206 11,428 Legal settlement - (370 ) - 4,250
Investment divestiture - (7,756 ) - (7,756 ) Tax cost - preferred
stock redemption 4,847 - 4,847 - Acquisition/disposition related
expenses - - -
7,246 Income from continuing operations, after income taxes,
as adjusted 86,448 91,150 233,030 271,403 Provision for income
taxes, as adjusted 24,217 43,657
107,242 140,070 Income from continuing
operations before income taxes, as adjusted 110,665 134,807 340,272
411,473 Interest, net 35,259 37,698
103,769 119,371 EBIT, as adjusted
145,924 172,505 444,041 530,844 Depreciation and amortization
50,687 42,333 140,225
127,486 EBITDA, as adjusted $ 196,611 $
214,838 $ 584,266 $ 658,330
Reconciliation of reported diluted
earnings per share to adjusteddiluted earnings per share
from continuing operations
Diluted earnings per share $ 0.35 $ 0.44 $ 0.93 $ 1.59 Loss from
discontinued operations, net of tax - - 0.01 - Restructuring
charges and asset impairments, net 0.06 - 0.17 0.04 Loss (gain) on
disposition of businesses - - 0.01 (0.44 ) Transaction costs
related to acquisitions and dispositions - 0.03 - 0.06 Legal
settlement - - - 0.02 Investment divestiture - (0.04 ) - (0.04 )
Tax cost - preferred stock redemption 0.03 - 0.03 -
Acquisition/disposition related expenses - -
- 0.04 Diluted earnings per
share from continuing operations, as adjusted $ 0.44 $ 0.43
$ 1.16 $ 1.28
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 freecash flow
Net cash provided by operating activities $ 137,342 $ 150,392 $
290,929 $ 351,400 Capital expenditures (44,173 ) (40,716 ) (115,532
) (130,328 ) Restructuring payments 17,295 15,281 51,161 46,056
Pension contribution - - 36,731 - Reserve account deposits 8,956
(4,166 ) 1,813 (25,630 ) Acquisition/disposition related expenses -
- - 10,483 Tax (receipts) payments related to investment
divestiture - (5,773 ) - 20,602 Tax payment related to sale of
Imagitas - 15,918 - 15,918 Cash transaction fees -
- 335 11,116 Free
cash flow $ 119,420 $ 130,936 $ 265,437 $
299,617
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version on businesswire.com: http://www.businesswire.com/news/home/20161101005255/en/
Pitney Bowes Inc.Editorial -Bill Hughes, 203/351-6785Chief
Communications OfficerorFinancial -Adam David, 203/351-7175VP,
Investor Relations
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