Pitney Bowes Inc. (NYSE:PBI), a global technology company that
provides products and solutions that power commerce, today reported
financial results for the full year 2014 and the fourth
quarter.
Full-Year 2014:
- Revenue of $3.8 billion, growth of 1
percent on a constant currency and reported basis
- Adjusted EPS of $1.90
- GAAP EPS from continuing operations of
$1.47; GAAP EPS of $1.64
- SG&A expenses of $1.4 billion, a
reduction of $42 million
- Free cash flow of $571 million; GAAP
cash from operations of $656 million
- Repurchased $50 million of stock and
paid down $100 million of debt
Fourth Quarter 2014:
- Revenue of $984 million, a decline of 1
percent on a constant currency basis and a decline of 3 percent on
a reported basis
- Adjusted EPS of $0.51
- GAAP EPS from continuing operations of
$0.29; GAAP EPS of $0.31
- SG&A expenses of $347 million, a
reduction of $15 million
- Free cash flow of $154 million; GAAP
cash from operations of $258 million
- Board of Directors approved a share
repurchase authorization of $100 million
“We are very pleased with our full-year financial results and
our fourth quarter performance,” said Marc Lautenbach, President
and CEO, Pitney Bowes. “For the first time in several years, we
grew revenue for the full year while at the same time we met our
objectives for adjusted earnings per share and free cash flow.
While we are still early in our transformation, the strategy we
began implementing two years ago is working and our vision to
deliver innovative physical and digital products and solutions is
resonating with our clients around the world. We will continue to
focus on reducing costs, while at the same time invest in the areas
that will optimize our business and grow revenue. Going forward, we
expect to realize the benefits of these initiatives throughout 2015
and over the next several years.”
FULL YEAR 2014 RESULTS
For the full year, revenue totaled $3.8 billion, an increase of
1 percent on both a reported and constant currency basis when
compared to the prior year. As part of its previously announced
go-to-market strategy, earlier in the year the Company exited a
non-core product line in Norway and transitioned from a direct
sales model to a dealer sales network in six smaller European
markets for the International Mailing and Production Mail segments.
When revenue in the current and prior year is adjusted for the
impact of these divested revenues, for comparative purposes revenue
would have grown 1 percent on a reported basis and by 2 percent on
a constant currency basis.
Adjusted earnings per diluted share from continuing operations
for the full year were $1.90. Generally Accepted Accounting
Principles (GAAP) earnings per diluted share from continuing
operations were $1.47, which includes a restructuring charge of
$0.29 per share associated with the previously announced cost
reduction plans; extinguishment of debt costs of $0.19 per share;
and income of $0.05 per share related to the Company’s divestiture
of an investment. GAAP earnings per diluted share for the full year
were $1.64, which includes income of $0.17 per share from
discontinued operations.
FOURTH QUARTER 2014 RESULTS
Significant changes in currency in the fourth quarter, relative
to the rest of the year, adversely affected revenue for many of the
Company’s businesses. Revenue totaled $984 million, a decline of 3
percent on a reported basis and a decline of less than 1 percent on
a constant currency basis versus the prior year. For comparative
purposes, when revenue in the current and prior year is adjusted
for the impacts of currency and the divested revenues in Europe
earlier in the year, revenue would have grown 1 percent.
Revenue in the fourth quarter reflects strong results in Digital
Commerce Solutions, which again had growth in all elements of the
segment. Revenue benefited from 12 percent growth on a reported
basis and 13 percent growth on a constant currency basis in the
Digital Commerce Solutions segment.
Revenue in the Enterprise Business Solutions group declined 4
percent on a reported basis and 2 percent on a constant currency
basis. This resulted from continued strong growth in Presort
Services that was offset by a decline in revenue for the Production
Mail business.
In the Small and Medium Business (SMB) Solutions group, revenue
declined 7 percent on a reported basis and 5 percent on a constant
currency basis. When revenue is adjusted for the impacts of
currency and the divested revenues in Europe that are included in
the prior year, for comparative purposes revenue would have
declined 3 percent for SMB Solutions, reflecting renewed
stabilization.
Adjusted earnings per diluted share from continuing operations
for the fourth quarter were $0.51. Earnings per diluted share from
continuing operations on a GAAP basis were $0.29, which includes a
restructuring charge of $0.22 per share associated with an
expansion of previously announced cost reduction plans. GAAP
earnings per diluted share for the fourth quarter were $0.31, which
includes income of $0.02 per share from discontinued
operations.
The Company’s results for the quarter and the year are
summarized in the table below:
Fourth Quarter Full Year
2014
2013
2014
2013
Adjusted EPS from continuing operations $0.51
$0.51 $1.90 $1.81 Restructuring charges and
asset impairments ($0.22) ($0.11) ($0.29) ($0.29) Extinguishment of
debt - ($0.02) ($0.19) ($0.10) Investment divestiture - - $0.05 -
GAAP EPS from continuing operations $0.29
$0.37 $1.47 $1.42 Discontinued operations –
income (loss) $0.02 $0.07 $0.17 ($0.71)
GAAP EPS
$0.31 $0.44 $1.64 $0.70 * The sum of
the earnings per share may not equal the totals above due to
rounding
FREE CASH FLOW RESULTS
Free cash flow during the quarter was $154 million and $571
million for the year. On a GAAP basis, the Company generated $258
million in cash from operations for the quarter and $656 million
for the year.
The Company used cash to pay $38 million in dividends to its
common shareholders in the quarter and paid $152 million in
dividends for the year. The Company used its cash during the year
primarily to invest in the business, pay dividends, reduce debt,
make restructuring payments and repurchase its common stock.
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 segment.
The SMB Solutions group offers mailing equipment, financing,
services and supplies for small and medium businesses to
efficiently create mail and evidence postage. This group includes
the North America Mailing and International Mailing segments. North
America Mailing includes the operations of U.S. and Canada Mailing.
International Mailing includes all other SMB operations around the
world.
The Enterprise Business Solutions group provides mailing
equipment and services for large enterprise clients to process
mail, including sortation services to qualify large mail volumes
for postal worksharing discounts. This group includes the global
Production Mail and Presort Services segments.
The Digital Commerce Solutions segment leverages digital and
mobile channels that make the Company’s clients’ customer-facing
functions more effective. This segment includes software,
ecommerce, shipping and marketing services.
Consolidated
(millions, except percentages) Fourth Quarter
2014
2013
Y/YReported
Y/YEx
Currency
Y/Y Ex Currencyand DivestedRevenues*
Revenue $984 $1,011 (3%) (1%)
1%
SMB Solutions Group
(millions, except percentages) Fourth Quarter
Revenue
2014
2013
Y/YReported
Y/YEx
Currency
Y/Y Ex Currencyand DivestedRevenues*
North America Mailing $376 $393 (4%) (4%) (4%) International
Mailing
134
158
(15%)
(9%)
(2%)
SMB Solutions Total $510 $551 (7%)
(5%) (3%)
EBIT
North America Mailing $166 $176 (6%) International Mailing
21
18
16%
SMB Solutions Total $187 $195 (4%) *
Excluding the impacts of currency and the divested revenues in
Europe related to the exit of a non-core product line in Norway and
transition to a dealer sales network in six smaller European
markets.
North America Mailing
The Company has continued to focus on driving productivity
improvements in its expanded inside sales organization. As a
result, revenue declined less than 4 percent on a constant currency
basis, representing a lesser rate than in the second and third
quarters. The direct sales organization delivered higher
productivity, which resulted in an increased average order value.
Recurring revenue streams also continued to stabilize due to a
further moderation in the decline of financing and rentals revenue.
EBIT margin declined versus the prior year due to the mix of
business and fewer lease extensions than the prior year.
International Mailing
Revenue declined 15 percent on a reported basis and 9 percent on
a constant currency basis. Revenue declined just 2 percent when the
impacts of the divested revenues in Europe earlier in the year are
also excluded from the prior year. These results were in-line with
recent trends and the Company’s efforts to stabilize overall
mail-related revenue. The Company was able to achieve these results
despite the uncertain macro-economic environment, particularly in
Europe. Also, excluding the impact of the divested revenues in
Europe and currency, supplies revenue continued to grow, which was
offset by a moderate decline in equipment sales. EBIT margin
improved versus the prior year due to the benefits from the changes
in go-to-market, including the actions taken in the third quarter,
as well as other cost reduction initiatives.
Enterprise Business Solutions Group
(millions, except percentages) Fourth Quarter
Revenue
2014
2013
Y/YReported
Y/YEx
Currency
Production Mail $132 $151 (13%) (10%) Presort Services
117
108
9%
9%
Enterprise Business Total $249 $259
(4%) (2%)
EBIT
Production Mail $20 $21 (5%) Presort Services
30
18
65%
Enterprise Business Total $50 $39 28%
Production Mail
Revenue comparisons for the quarter were impacted by fewer
large, multi-unit inserting and production print installations than
in the prior year. EBIT margin improved versus the prior year due
to a favorable mix of inserting equipment sales, improved margin on
service revenue and on-going cost reduction initiatives.
Presort Services
Revenue benefited from the improved qualification of mail
for presort discounts as a result of operational enhancements, the
volume of First Class mail processed and the effective
implementation of the postal rate and rule changes at the beginning
of 2014. EBIT margin improved versus the prior year due to the
revenue growth and on-going operational productivity.
Digital Commerce Solutions
(millions, except percentages) Fourth Quarter
2014
2013
Y/YReported
Y/YEx
Currency
Revenue $225 $201 12% 13%
EBIT $32 $27 18%
The segment continued to experience revenue growth in each of
its four product categories: ecommerce, software, shipping and
marketing services.
Ecommerce growth was driven by strong increases in the number of
packages shipped and benefited from the initial ramp-up of the
Company’s UK outbound cross-border services. The strengthening U.S.
dollar had a dampening effect on the rate of increase in the number
of purchases from the U.S. over the course of the quarter.
Software revenue growth was led by a significant increase in
licensing revenue, particularly enterprise location intelligence
software, reflecting on-going investments in product and channel
specialization. Revenue growth in the areas of shipping solutions
and marketing services resulted from new client acquisitions for
their respective product offerings.
EBIT margin improved 80 basis points versus the prior year,
which reflects the benefit of earnings leverage from revenue
growth, net of the impact of continued investments in technology
and infrastructure.
2015 GUIDANCE
This guidance discusses future results, which are inherently
subject to unforeseen risks and developments. As such, discussions
about the business outlook should be read in the context of an
uncertain future, as well as the risk factors identified in the
safe harbor language at the end of this release and as more fully
outlined in the Company's 2013 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. This guidance also assumes that
the global economy and foreign exchange markets in 2015 will not
change significantly from current levels. Should recent volatility
in foreign exchange markets continue, however, it could have a
material effect on our reported results as compared to the guidance
we are providing.
The Company expects in 2015:
- Revenue growth, excluding the impacts
of currency, to be driven by double-digit growth in Digital
Commerce Solutions, flat to modest growth in Enterprise Business
Solutions and a low single-digit decline in SMB Solutions.
- The actions taken in 2014 to exit a
non-core product line in Norway and transition to a dealer sales
network in six smaller European markets are expected to adversely
impact total revenue comparisons for 2015 by about $30 million, or
by about 1 percent.
- Incremental investment of $0.07 to
$0.09 per share related to the implementation of a new ERP system
and $0.08 to $0.09 per share related to expanded marketing
programs, including the new brand. These expenses are expected to
be higher in the first half of the year versus the second half of
the year.
- On-going reductions in SG&A costs
as a result of the expected benefits from the 2013 and 2014
restructuring and go-to-market programs. These benefits are
expected to substantially offset the incremental expenses
associated with the new ERP system and the expanded marketing
programs.
- A tax rate in the range of 31 to 34
percent.
- Free cash flow in 2015 to be slightly
lower than 2014 primarily due to the further stabilization of
finance receivables and incremental capital investment related to
the new ERP system.
Based on the above assumptions, the Company’s 2015 guidance is
as follows:
- Revenue, on a constant currency basis,
is expected to be in the range of flat to 3 percent growth when
compared to 2014. However, if current currency exchange rates are
in place all year, reported revenue would be lower than constant
currency revenue by more than 3 percentage points.
- Earnings per diluted share from
continuing operations to be in the range of $1.85 to $2.00, which
includes the incremental investment of $0.15 to $0.18 per share
related to the implementation of a new ERP system and expanded
marketing programs, including the new brand. This guidance is on a
GAAP basis and does not anticipate any potential adjustments to
earnings.
- Free cash flow to be in the range of
$475 million to $550 million.
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. EST. 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 offering
innovative products and solutions that enable commerce in the areas
of customer information management, location intelligence, customer
engagement, shipping and mailing, and global ecommerce. More than
1.5 million clients in approximately 100 countries around the world
rely on products, solutions and services from Pitney Bowes. For
additional information, visit Pitney Bowes at
www.pitneybowes.com.
The Company's financial results are reported in accordance with
generally accepted accounting principles (GAAP). The Company uses
measures such as adjusted earnings per share, adjusted income from
continuing operations and free cash flow to exclude the impact of
special items like restructuring charges, tax adjustments, and
goodwill and asset write-downs, because, while these are actual
Company expenses, they can mask underlying trends associated with
its business. Such items are often inconsistent in amount and
frequency and as such, the adjustments allow an investor greater
insight into the current underlying operating trends of the
business.
The use of free cash flow provides investors insight into the
amount of cash that management could have available for other
discretionary uses. It adjusts GAAP cash from operations for
capital expenditures, as well as special items like cash used for
restructuring charges, unusual tax settlements or payments and
contributions to its pension funds. Management uses segment EBIT to
measure profitability and performance at the segment level. EBIT is
determined by deducting from revenue the related costs and expenses
attributable to the segment. Segment EBIT excludes interest, taxes,
general corporate expenses not allocated to a particular business
segment, restructuring charges and goodwill and asset impairments,
which are recognized on a consolidated basis. In addition, revenue
growth is presented on a constant currency basis to exclude the
impact of changes in foreign currency exchange rates since the
prior period under comparison. Constant currency measures are
intended to help investors better understand the underlying
operational performance of the business excluding the impacts of
shifts in currency exchange rates over the period.
Pitney Bowes has provided a quantitative reconciliation to GAAP
in supplemental schedules. This information may also be found at
the Company's web site www.pb.com/investorrelations.
This document contains “forward-looking statements” about the
Company’s expected or potential future business and financial
performance. Forward-looking statements include, but are not
limited to, statements about its future revenue and earnings
guidance and other statements about future events or conditions.
Forward-looking statements are not guarantees of future performance
and involve risks and uncertainties that could cause actual results
to differ materially from those projected. These risks and
uncertainties include, but are not limited to: mail volumes; the
uncertain economic environment; timely development, market
acceptance and regulatory approvals, if needed, of new products;
fluctuations in customer demand; changes in postal regulations;
interrupted use of key information systems; management of
outsourcing arrangements; the implementation of a new enterprise
resource planning system; changes in business portfolio; foreign
currency exchange rates; changes in our credit ratings; management
of credit risk; changes in interest rates; the financial health of
national posts; and other factors beyond its control as more fully
outlined in the Company's 2013 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, 2014 and
2013, and consolidated balance sheets at December 31, 2014 and 2013
are attached.
Pitney Bowes Inc.
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except share and per share data)
Three months ended December 31,
Twelve months ended December 31, 2014 2013
2014 2013 Revenue: Equipment
sales $ 212,339 $ 248,558 $ 770,371 $ 867,593 Supplies 71,691
72,545 300,040 285,730 Software 116,852 113,006 429,743 398,664
Rentals 119,560 128,057 484,629 512,493 Financing 107,330 111,167
432,859 448,906 Support services 154,372 164,257 625,135 646,657
Business services 201,769 173,231
778,727 631,292 Total revenue
983,913 1,010,821 3,821,504
3,791,335 Costs and expenses: Cost of
equipment sales 103,388 127,013 365,724 422,580 Cost of supplies
23,546 22,829 93,675 89,365 Cost of software 30,337 30,560 123,760
110,653 Cost of rentals 23,065 24,389 97,338 100,335 Financing
interest expense 18,829 20,281 78,562 77,719 Cost of support
services 88,800 99,747 377,003 400,038 Cost of business services
138,257 126,962 544,729 449,932 Selling, general and administrative
346,903 362,220 1,378,400 1,420,096 Research and development 29,030
29,061 109,931 110,412 Restructuring charges & asset
impairments 61,894 30,404 84,560 84,344 Other interest expense
24,290 25,146 95,291 114,740 Interest income (1,106 ) (965 ) (4,403
) (5,472 ) Other expense, net - 7,518
45,738 32,639 Total costs and
expenses 887,233 905,165
3,390,308 3,407,381 Income from
continuing operations before income taxes 96,680 105,656 431,196
383,954 Provision for income taxes 33,134
25,922 112,815 77,967
Income from continuing operations 63,546 79,734 318,381
305,987
Income (loss) from discontinued
operations, net of tax
3,576 14,948 33,749
(144,777 ) Net income before attribution of
noncontrolling interests 67,122 94,682 352,130 161,210 Less:
Preferred stock dividends of subsidiaries attributable to
noncontrolling interests 4,594 4,593
18,375 18,375 Net income -
Pitney Bowes Inc. $ 62,528 $ 90,089 $ 333,755
$ 142,835 Amounts attributable to common
stockholders: Income from continuing operations $ 58,952 $ 75,141 $
300,006 $ 287,612 Income (loss) from discontinued operations
3,576 14,948 33,749
(144,777 ) Net income - Pitney Bowes Inc. $ 62,528 $
90,089 $ 333,755 $ 142,835 Basic
earnings per share attributable to common stockholders (1):
Continuing operations 0.29 0.37 1.49 1.43 Discontinued operations
0.02 0.07 0.17
(0.72 ) Net income - Pitney Bowes Inc. $ 0.31 $ 0.45
$ 1.65 $ 0.71 Diluted earnings per
share attributable to common stockholders (1): Continuing
operations 0.29 0.37 1.47 1.42 Discontinued operations 0.02
0.07 0.17 (0.71 )
Net income - Pitney Bowes Inc. $ 0.31 $ 0.44 $ 1.64
$ 0.70 Weighted-average shares used in diluted
EPS 203,110,509 203,581,724
203,961,446 202,956,738
(1)
The sum of the earnings per share amounts may not equal the totals
above due to rounding.
Pitney Bowes Inc.
Consolidated Balance Sheets
(Unaudited in
thousands, except per share data)
Assets
December 31,
2014
December 31,
2013 (1)
Current assets: Cash and cash equivalents $ 1,079,145 $ 907,806
Short-term investments 32,121 31,128 Accounts receivable,
gross 424,479 482,949 Allowance for doubtful accounts receivable
(10,742 ) (13,149 ) Accounts receivable, net 413,737
469,800 Finance receivables 1,019,412 1,127,261 Allowance
for credit losses (19,108 ) (24,340 ) Finance
receivables, net 1,000,304 1,102,921 Inventories 84,827
103,580 Current income taxes 40,542 28,934 Other current assets and
prepayments 57,173 147,067 Assets held for sale 52,271
46,976 Total current assets 2,760,120
2,838,212 Property, plant and equipment, net 285,091 245,171
Rental property and equipment, net 200,380 226,146 Finance
receivables 828,723 974,972 Allowance for credit losses
(9,002 ) (12,609 ) Finance receivables, net 819,721 962,363
Goodwill 1,672,721 1,734,871 Intangible assets, net 82,173
120,387 Non-current income taxes 96,377 73,751 Other assets
569,110 571,807 Total assets $
6,485,693 $ 6,772,708
Liabilities,
noncontrolling interests and stockholders' equity
Current liabilities: Accounts payable and accrued liabilities $
1,558,731 $ 1,644,582 Current income taxes 90,167 157,340 Notes
payable and current portion of long-term obligations 324,879 -
Advance billings 386,846 425,833
Total current liabilities 2,360,623 2,227,755 Deferred taxes
on income 64,839 39,701 Tax uncertainties and other income tax
liabilities 86,127 190,645 Long-term debt 2,927,127 3,346,295 Other
non-current liabilities 673,348 466,766
Total liabilities 6,112,064 6,271,162
Noncontrolling interests (Preferred stockholders'
equity in subsidiaries) 296,370 296,370 Stockholders'
equity: Cumulative preferred stock, $50 par value, 4% convertible 1
4 Cumulative preference stock, no par value, $2.12 convertible 548
591 Common stock, $1 par value 323,338 323,338 Additional
paid-in-capital 178,852 196,977 Retained earnings 4,897,708
4,715,564 Accumulated other comprehensive loss (846,156 ) (574,556
) Treasury stock, at cost (4,477,032 ) (4,456,742 )
Total Pitney Bowes Inc. stockholders' equity 77,259
205,176 Total liabilities,
noncontrolling interests and stockholders' equity $ 6,485,693
$ 6,772,708 (1) Certain prior year amounts
have been revised.
Pitney Bowes Inc.
Revenue and EBIT Business Segments December 31,
2014
(Unaudited)
(Dollars in thousands)
Three Months Ended
December 31, % 2014
2013 Change
Revenue
North America Mailing $ 376,420
$
392,867 (4 %) International Mailing 133,621
157,917 (15 %) Small & Medium Business Solutions
510,041 550,784 (7 %) Production Mail
131,730 151,192 (13 %) Presort Services 117,351
107,515 9 % Enterprise Business Solutions
249,081 258,707 (4 %) Digital Commerce
Solutions 224,791 201,330 12 %
Total revenue $ 983,913 $
1,010,821 (3 %)
EBIT
(1)
North America Mailing $ 165,764 $ 176,162 (6 %)
International Mailing 21,363 18,424 16
% Small & Medium Business Solutions 187,127
194,586 (4 %) Production Mail 19,678 20,761 (5
%) Presort Services 29,995 18,127 65 %
Enterprise Business Solutions 49,673 38,888
28 % Digital Commerce Solutions 31,731
26,808 18 %
Total EBIT $
268,531 $ 260,282 3 % Unallocated
amounts: Interest, net (2) (42,013 ) (44,462 ) Corporate and other
expenses (67,944 ) (72,242 ) Restructuring charges & asset
impairments (61,894 ) (30,404 ) Other expense, net -
(7,518 )
Income from continuing operations before
income taxes $ 96,680 $
105,656 (1) Earnings before interest and taxes
(EBIT) excludes general corporate expenses and restructuring
charges & asset impairments. (2) Interest, net includes
financing interest expense, other interest expense and interest
income.
Pitney Bowes Inc. Revenue and EBIT
Business Segments December 31, 2014
(Unaudited)
(Dollars in thousands)
Twelve Months
Ended December 31, % 2014
2013 Change
Revenue
North America Mailing $ 1,491,927
$
1,555,585 (4 %) International Mailing 572,440
602,582 (5 %) Small & Medium Business Solutions
2,064,367 2,158,167 (4 %) Production
Mail 462,199 511,544 (10 %) Presort Services 456,556
430,469 6 % Enterprise Business Solutions
918,755 942,013 (2 %) Digital Commerce
Solutions 838,382 691,155 21 %
Total revenue $ 3,821,504 $
3,791,335 1 %
EBIT
(1)
North America Mailing $ 642,521 $ 640,830 - International
Mailing 88,710 71,516 24 % Small &
Medium Business Solutions 731,231 712,346
3 % Production Mail 47,543 55,000 (14 %) Presort
Services 98,230 83,259 18 % Enterprise
Business Solutions 145,773 138,259 5 %
Digital Commerce Solutions 83,725
54,777 53 %
Total EBIT $ 960,729
$ 905,382 6 % Unallocated amounts: Interest,
net (2) (169,450 ) (186,987 ) Corporate and other expenses (229,785
) (217,458 ) Restructuring charges & asset impairments (84,560
) (84,344 ) Other expense, net (45,738 ) (32,639 )
Income from continuing operations
before income taxes
$ 431,196 $ 383,954
(1) Earnings before interest and taxes (EBIT) excludes
general corporate expenses and restructuring charges & asset
impairments. (2) Interest, net includes financing interest expense,
other interest expense and interest income.
Pitney Bowes
Inc. Reconciliation of Reported Consolidated Results to
Adjusted Results (Unaudited) (Dollars in thousands,
except per share data)
Three Months Ended
December 31, Twelve Months Ended December
31, 2014 2013 2014
2013 GAAP income from continuing operations
after income taxes, as reported $ 58,952 $ 75,141 $ 300,006 $
287,612 Restructuring charges & asset impairments 44,188 23,363
59,349 59,024 Extinguishment of debt - 4,586 37,833 19,911
Investment divestiture - - (9,774 ) - Income from continuing
operations after income taxes, as
adjusted
$ 103,140 $ 103,090
$ 387,414 $ 366,547
GAAP diluted earnings per share from
continuing operations, as reported $ 0.29 $ 0.37 $ 1.47 $ 1.42
Restructuring charges & asset impairments 0.22 0.11 0.29 0.29
Extinguishment of debt - 0.02 0.19 0.10 Investment divestiture
- - (0.05 ) -
Diluted earnings per share from continuing operations, as adjusted
$ 0.51 $ 0.51 $
1.90 $ 1.81 GAAP
net cash provided by operating activities, as reported $ 258,094 $
131,264 $ 655,526 $ 624,824 Capital expenditures (59,286 ) (34,120
) (180,556 ) (137,512 ) Restructuring payments 14,011 18,167 56,162
59,520 Net tax receipts related to investment divestiture (59,475 )
- (5,737 ) - Tax payments related to sale of businesses - 75,545 -
75,545 Reserve account deposits 253 (3,142 ) (15,666 ) (20,104 )
Extinguishment of debt - 7,518 61,657 32,639
Free cash flow, as adjusted $ 153,597
$ 195,232 $ 571,386
$ 634,912 Note:
The sum of the earnings per share amounts may not equal the totals
above due to rounding.
Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted
Results (Unaudited) (Dollars in thousands,
except per share data) Three Months Ended December 31,
Twelve Months Ended December 31, 2014 2013
2014 2013 GAAP income from continuing
operations after income taxes, as reported $ 58,952 $ 75,141 $
300,006 $ 287,612 Restructuring charges & asset impairments
44,188 23,363 59,349 59,024 Extinguishment of debt - 4,586 37,833
19,911 Investment divestiture - - (9,774 )
- Income from continuing operations after income taxes, as
adjusted 103,140 103,090 387,414 366,547 Provision for income
taxes, as adjusted 50,840 35,895 155,705 116,015 Preferred stock
dividends of subsidiaries attributable to noncontrolling interests
4,594 4,593 18,375 18,375 Income
from continuing operations before income taxes, as adjusted 158,574
143,578 561,494 500,937 Interest, net 42,013 44,462
169,450 186,987
Adjusted EBIT
200,587 188,040 730,944 687,924
Depreciation and amortization 54,728 41,027
197,234 194,905
Adjusted EBITDA $
255,315 $ 229,067 $ 928,178
$ 882,829
Pitney Bowes Inc.EditorialBill Hughes, 203-351-6785Chief
Communications OfficerorFinancialCharles F. McBride,
203-351-6349VP, Investor Relations
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