We believe our financing needs in the short and long-term can be met
from cash generated internally, the issuance of commercial paper, debt issuance
under our effective shelf registration statement and borrowing capacity under
our existing credit agreements.
Recent Accounting Pronouncements
Revenue Recognition
In September 2009, new guidance was introduced addressing the
accounting for revenue arrangements with multiple elements and certain revenue
arrangements that include software. This will allow companies to allocate
consideration in a multiple element arrangement in a way that better reflects
the economics of the transaction and will result in the elimination of the
residual method. In addition, tangible products that have software components
that are essential to the functionality of the tangible product will be
scoped out of the software revenue guidance. The new guidance will also result
in more expansive disclosures. The new guidance will be effective on January 1,
2011, with early adoption permitted. We are currently evaluating the impact of
adopting the new guidance.
Regulatory Matters
With exception of the impact of the U.S. health care reform legislation
disclosed in Note 15 to the Condensed Consolidated Financial Statements, there
have been no significant changes to the regulatory matters disclosed in our
2009 Annual Report on Form 10-K.
I
tem 3:
Quantitative and Qualitative Disclosures about Market Risk
There were no material changes to the disclosures made in the Annual
Report on Form 10-K for the year ended December 31, 2009 regarding this matter.
I
tem 4: Controls
and Procedures
Disclosure
controls and procedures are designed to reasonably assure that information
required to be disclosed in reports filed or submitted under the Exchange Act
is recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms. Disclosure controls and procedures are
also designed to reasonably assure that such information is accumulated and
communicated to our management, including our Chief Executive Officer (CEO) and
Chief Financial Officer (CFO), as appropriate to allow timely decisions
regarding required disclosure.
Under the direction of our CEO and CFO, we evaluated the effectiveness
of our disclosure controls and procedures and internal control over financial
reporting. The CEO and CFO concluded that our disclosure controls and
procedures were effective as of March 31, 2010. In addition, no changes in
internal control over financial reporting occurred during the three months ended
March 31, 2010, that have materially affected, or are reasonably likely to
materially affect, such internal control over financial reporting. It should be
noted that any system of controls is based in part upon certain assumptions
designed to obtain reasonable (and not absolute) assurance as to its
effectiveness, and there can be no assurance that any design will succeed in
achieving its stated goals. Notwithstanding this caution, the disclosure
controls and procedures are designed to provide reasonable assurance of
achieving their stated objectives, and the CEO and CFO have concluded that the
disclosure controls and procedures are effective at that reasonable assurance
level.
P
ART II. OTHER INFORMATION
I
tem 1: Legal Proceedings
In
the ordinary course of business, we are routinely defendants in or party to a
number of pending and threatened legal actions. These may involve litigation by
or against us relating to, among other things, contractual rights under vendor,
insurance or other contracts; intellectual property or patent rights;
equipment, service, payment or other disputes with customers; or disputes with
employees. Some of these actions may be brought as a purported class action on
behalf of a purported class of employees, customers or others.
Our
wholly-owned subsidiary, Imagitas, Inc., was a defendant in ten purported class
actions filed in six different states. These lawsuits have been coordinated in
the United States District Court for the Middle District of Florida,
In re:
Imagitas, Drivers Privacy Protection Act Litigation
(Coordinated, May 28,
2007). Each of these lawsuits alleged that the Imagitas DriverSource program
violated the federal Drivers Privacy Protection Act (DPPA). Under the
DriverSource program, Imagitas entered into contracts with state governments to
mail out automobile registration renewal materials along with third party
advertisements, without revealing the personal information of any state
resident to any advertiser. The DriverSource program assisted the state in
performing its governmental function of delivering these mailings and funding
the costs of them. The plaintiffs in these actions were seeking
28
statutory
damages under the DPPA. On April 9, 2008, the District Court granted Imagitas
motion for summary judgment in one of the coordinated cases,
Rine, et al. v.
Imagitas, Inc
. (United States District Court, Middle District of Florida,
filed August 1, 2006). On July 30, 2008, the District Court issued a final
judgment in the
Rine
lawsuit and stayed all of the other cases filed
against Imagitas pending an appellate decision in
Rine
. On August 27,
2008, the
Rine
plaintiffs filed an appeal of the District Courts
decision in the United States Court of Appeals, Eleventh Judicial Circuit (the
Circuit Court). On December 21, 2009, the Circuit Court affirmed the District
Court decision. On February 22, 2010, the Circuit Court denied the
Rine
plaintiffs petition for rehearing en banc. The
Rine
plaintiffs ability
to pursue further review of this decision has expired. With respect to the
remaining stayed cases, the District Court has requested that the parties
provide status reports and a proposed schedule for the remaining proceedings.
We expect to prevail in the lawsuits against Imagitas; however, as
litigation is inherently unpredictable, there can be no assurance in this
regard. If the plaintiffs do prevail, the results may have a material effect on
our financial position, future results of operations or cash flows, including,
for example, our ability to offer certain types of goods or services in the
future.
On October 28, 2009, the Company and certain of our current and former
officers, were named as defendants in
NECA-IBEW Health & Welfare Fund v.
Pitney Bowes Inc. et al.
, a
class action lawsuit filed in the U.S. District Court for the District of
Connecticut. The complaint asserts claims under the Securities Exchange Act of
1934 on behalf of those who purchased the common stock of the Company during
the period between July 30, 2007 and October 29, 2007 alleging that the company,
in essence, missed two financial projections. We believe this case is without
merit and intend to defend it vigorously.
I
tem 1A: Risk Factors
There were no material changes to the risk factors identified in the
Annual Report on Form 10-K for the year ended December 31, 2009.
I
tem 2: Unregistered Sales of Equity Securities and Use
of Proceeds
Repurchases of
Equity Securities
We repurchase shares of our common stock
under a systematic program to manage the dilution created by shares issued
under employee stock plans and for other purposes. This program authorizes
repurchases in the open market. We have not repurchased or acquired any other
shares of our common stock during 2010 in any other manner.
No shares were purchased during the first
quarter of 2010, leaving approximately $73.4 million available for future
repurchases under this program at March 31, 2010.
I
tem 3: Defaults Upon Senior Securities
None.
I
tem 4: Submission of Matters to a Vote of Security
Holders
Not applicable.
I
tem 5: Other Information
None.
I
tem 6: Exhibits
See Index of Exhibits.
29
S
ignatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
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PITNEY BOWES
INC.
|
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May 5, 2010
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/s/ Michael
Monahan
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Michael
Monahan
|
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Executive
Vice President and
|
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Chief
Financial Officer
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(Principal
Financial Officer)
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/s/ S. J.
Green
|
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S. J. Green
|
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Vice
President Finance and
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Chief
Accounting Officer
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(Principal Accounting
Officer)
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30
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Exhibit Index
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Exhibit Number
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Description
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Page Number
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(12)
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Computation
of ratio of earnings to fixed charges
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Page 32
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(31.1)
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Certification
of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under
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Page 33
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the
Securities Exchange Act of 1934, as amended
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(31.2)
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Certification
of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under
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Page 34
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the
Securities Exchange Act of 1934, as amended
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(32.1)
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Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350
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Page 35
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(32.2)
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Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
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Page 36
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101.INS
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XBRL Report
Instance Document
|
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101.SCH
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XBRL
Taxonomy Extension Schema Document
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101.CAL
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XBRL
Taxonomy Calculation Linkbase Document
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101.LAB
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XBRL
Taxonomy Label Linkbase Document
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101.PRE
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XBRL
Taxonomy Presentation Linkbase Document
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31
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