Delaware | 06-0495050 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
1 Elmcroft Road, Stamford, Connecticut | 06926-0700 | |
(Address of principal executive offices) | (Zip Code) |
(203) 356-5000 |
(Registrant’s telephone number, including area code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Page Number | ||
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Revenue: | |||||||
Equipment sales | $ | 214,999 | $ | 220,179 | |||
Supplies | 74,287 | 76,365 | |||||
Software | 87,012 | 104,350 | |||||
Rentals | 136,379 | 140,389 | |||||
Financing | 116,762 | 126,748 | |||||
Support services | 165,486 | 173,518 | |||||
Business services | 372,031 | 378,587 | |||||
Total revenue | 1,166,956 | 1,220,136 | |||||
Costs and expenses: | |||||||
Cost of equipment sales | 109,337 | 96,916 | |||||
Cost of supplies | 23,262 | 23,871 | |||||
Cost of software | 20,706 | 21,093 | |||||
Cost of rentals | 27,755 | 30,225 | |||||
Financing interest expense | 19,875 | 21,139 | |||||
Cost of support services | 108,009 | 115,087 | |||||
Cost of business services | 291,648 | 286,817 | |||||
Selling, general and administrative | 377,206 | 405,486 | |||||
Research and development | 33,335 | 34,073 | |||||
Other interest expense | 30,739 | 29,367 | |||||
Interest income | (1,748 | ) | (1,733 | ) | |||
Other expense (income), net | 25,121 | (3,234 | ) | ||||
Total costs and expenses | 1,065,245 | 1,059,107 | |||||
Income from continuing operations before income taxes | 101,711 | 161,029 | |||||
Provision for income taxes | 27,549 | 15,493 | |||||
Income from continuing operations | 74,162 | 145,536 | |||||
(Loss) income from discontinued operations, net of tax | (2,062 | ) | 17,728 | ||||
Net income before attribution of noncontrolling interests | 72,100 | 163,264 | |||||
Less: Preferred stock dividends of subsidiaries attributable to noncontrolling interests | 4,594 | 4,594 | |||||
Net income - Pitney Bowes Inc. | $ | 67,506 | $ | 158,670 | |||
Amounts attributable to common stockholders: | |||||||
Net income from continuing operations | $ | 69,568 | $ | 140,942 | |||
(Loss) income from discontinued operations, net of tax | (2,062 | ) | 17,728 | ||||
Net income - Pitney Bowes Inc. | $ | 67,506 | $ | 158,670 | |||
Basic earnings per share attributable to common stockholders: | |||||||
Continuing operations | $ | 0.35 | $ | 0.70 | |||
Discontinued operations | (0.01 | ) | 0.09 | ||||
Net income - Pitney Bowes Inc. | $ | 0.34 | $ | 0.79 | |||
Diluted earnings per share attributable to common stockholders: | |||||||
Continuing operations | $ | 0.34 | $ | 0.70 | |||
Discontinued operations | (0.01 | ) | 0.09 | ||||
Net income - Pitney Bowes Inc. | $ | 0.33 | $ | 0.79 |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Net income | $ | 72,100 | $ | 163,264 | |||
Other comprehensive income, net of tax: | |||||||
Net unrealized gain on cash flow hedges, net of tax of $344 and $32, respectively | 538 | 49 | |||||
Net unrealized gain on investment securities, net of tax of $175 and $(548), respectively | 274 | (857 | ) | ||||
Amortization of pension and postretirement costs, net of tax of $6,139 and $6,886, respectively | 10,631 | 11,988 | |||||
Foreign currency translations | (42,204 | ) | 33,359 | ||||
Other comprehensive (loss) income | (30,761 | ) | 44,539 | ||||
Comprehensive income | 41,339 | 207,803 | |||||
Less: Preferred stock dividends of subsidiaries attributable to noncontrolling interests | 4,594 | 4,594 | |||||
Total comprehensive income - Pitney Bowes Inc. | $ | 36,745 | $ | 203,209 |
March 31, 2013 | December 31, 2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 909,664 | $ | 913,276 | |||
Short-term investments | 37,712 | 36,611 | |||||
Accounts receivable, gross | 663,357 | 748,469 | |||||
Allowance for doubtful accounts receivables | (15,739 | ) | (20,219 | ) | |||
Accounts receivable, net | 647,618 | 728,250 | |||||
Finance receivables | 1,160,865 | 1,213,776 | |||||
Allowance for credit losses | (23,774 | ) | (25,484 | ) | |||
Finance receivables, net | 1,137,091 | 1,188,292 | |||||
Inventories | 167,469 | 179,678 | |||||
Current income taxes | 49,082 | 51,836 | |||||
Other current assets and prepayments | 113,142 | 114,184 | |||||
Total current assets | 3,061,778 | 3,212,127 | |||||
Property, plant and equipment, net | 377,246 | 385,377 | |||||
Rental property and equipment, net | 236,026 | 241,192 | |||||
Finance receivables | 993,242 | 1,041,099 | |||||
Allowance for credit losses | (13,206 | ) | (14,610 | ) | |||
Finance receivables, net | 980,036 | 1,026,489 | |||||
Investment in leveraged leases | 34,236 | 34,546 | |||||
Goodwill | 2,115,450 | 2,136,138 | |||||
Intangible assets, net | 153,440 | 166,214 | |||||
Non-current income taxes | 93,391 | 94,434 | |||||
Other assets | 564,503 | 563,374 | |||||
Total assets | $ | 7,616,106 | $ | 7,859,891 | |||
LIABILITIES, NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 1,586,957 | $ | 1,809,226 | |||
Current income taxes | 207,081 | 240,681 | |||||
Notes payable and current portion of long-term obligations | 375,000 | 375,000 | |||||
Advance billings | 466,677 | 452,130 | |||||
Total current liabilities | 2,635,715 | 2,877,037 | |||||
Deferred taxes on income | 94,883 | 69,222 | |||||
Tax uncertainties and other income tax liabilities | 144,739 | 145,881 | |||||
Long-term debt | 3,657,634 | 3,642,375 | |||||
Other non-current liabilities | 713,578 | 718,375 | |||||
Total liabilities | 7,246,549 | 7,452,890 | |||||
Noncontrolling interests (Preferred stockholders’ equity in subsidiaries) | 296,370 | 296,370 | |||||
Commitments and contingencies (See Note 12) | |||||||
Stockholders’ equity: | |||||||
Cumulative preferred stock, $50 par value, 4% convertible | 4 | 4 | |||||
Cumulative preference stock, no par value, $2.12 convertible | 648 | 648 | |||||
Common stock, $1 par value (480,000,000 shares authorized; 323,337,912 shares issued) | 323,338 | 323,338 | |||||
Additional paid-in capital | 203,454 | 223,847 | |||||
Retained earnings | 4,736,961 | 4,744,802 | |||||
Accumulated other comprehensive loss | (711,974 | ) | (681,213 | ) | |||
Treasury stock, at cost (121,867,606 and 122,453,865 shares, respectively) | (4,479,244 | ) | (4,500,795 | ) | |||
Total Pitney Bowes Inc. stockholders’ equity | 73,187 | 110,631 | |||||
Total liabilities, noncontrolling interests and stockholders’ equity | $ | 7,616,106 | $ | 7,859,891 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities: | |||||||
Net income before attribution of noncontrolling interests | $ | 72,100 | $ | 163,264 | |||
Restructuring payments | (16,275 | ) | (26,245 | ) | |||
Special pension plan contributions | — | (95,000 | ) | ||||
Tax payments related to sale of leveraged lease assets | — | (69,233 | ) | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Gain on sale of leveraged lease assets, net of tax | — | (12,886 | ) | ||||
Proceeds from settlement of derivative instruments | 4,838 | — | |||||
Depreciation and amortization | 57,227 | 64,370 | |||||
Stock-based compensation | 3,704 | 4,377 | |||||
Changes in operating assets and liabilities: | |||||||
(Increase) decrease in accounts receivable | 71,401 | 34,798 | |||||
(Increase) decrease in finance receivables | 76,628 | 63,926 | |||||
(Increase) decrease in inventories | 8,807 | 925 | |||||
(Increase) decrease in other current assets and prepayments | (4,396 | ) | (13,002 | ) | |||
Increase (decrease) in accounts payable and accrued liabilities | (169,292 | ) | (141,759 | ) | |||
Increase (decrease) in current and non-current income taxes | (11,472 | ) | 53,087 | ||||
Increase (decrease) in advance billings | 23,101 | 43,166 | |||||
Increase (decrease) in other operating capital, net | 15,789 | 1,592 | |||||
Net cash provided by operating activities | 132,160 | 71,380 | |||||
Cash flows from investing activities: | |||||||
Short-term and other investments | 2,143 | (8,334 | ) | ||||
Capital expenditures | (38,839 | ) | (50,029 | ) | |||
Proceeds from sale of leveraged lease assets | — | 105,506 | |||||
Net investment in external financing | (506 | ) | (825 | ) | |||
Reserve account deposits | (27,327 | ) | (25,674 | ) | |||
Net cash (used in) provided by investing activities | (64,529 | ) | 20,644 | ||||
Cash flows from financing activities: | |||||||
Proceeds from the issuance of long-term obligations, net of fees and discounts of $13,387 | 411,613 | — | |||||
Principal payments of long-term obligations | (404,637 | ) | (150,000 | ) | |||
Increase in commercial paper borrowings, net | — | 177,830 | |||||
Proceeds from the issuance of common stock under employee stock-based compensation plans | 1,876 | 2,059 | |||||
Dividends paid to stockholders | (75,347 | ) | (74,938 | ) | |||
Net cash used in financing activities | (66,495 | ) | (45,049 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (4,748 | ) | 12,340 | ||||
(Decrease) increase in cash and cash equivalents | (3,612 | ) | 59,315 | ||||
Cash and cash equivalents at beginning of period | 913,276 | 856,238 | |||||
Cash and cash equivalents at end of period | $ | 909,664 | $ | 915,553 | |||
Cash interest paid | $ | 72,650 | $ | 77,572 | |||
Cash income tax payments, net of refunds | $ | 36,871 | $ | 28,148 |
March 31, 2013 | December 31, 2012 | ||||||
Raw materials and work in process | $ | 60,389 | $ | 66,221 | |||
Supplies and service parts | 70,842 | 72,551 | |||||
Finished products | 63,925 | 68,335 | |||||
Inventory at FIFO cost | 195,156 | 207,107 | |||||
Excess of FIFO cost over LIFO cost | (27,687 | ) | (27,429 | ) | |||
Total inventory, net | $ | 167,469 | $ | 179,678 |
March 31, 2013 | |||||||||||
North America | International | Total | |||||||||
Sales-type lease receivables | |||||||||||
Gross finance receivables | $ | 1,527,074 | $ | 435,822 | $ | 1,962,896 | |||||
Unguaranteed residual values | 139,759 | 20,190 | 159,949 | ||||||||
Unearned income | (307,448 | ) | (98,744 | ) | (406,192 | ) | |||||
Allowance for credit losses | (15,572 | ) | (7,767 | ) | (23,339 | ) | |||||
Net investment in sales-type lease receivables | 1,343,813 | 349,501 | 1,693,314 | ||||||||
Loan receivables | |||||||||||
Loan receivables | 393,283 | 44,171 | 437,454 | ||||||||
Allowance for credit losses | (11,829 | ) | (1,812 | ) | (13,641 | ) | |||||
Net investment in loan receivables | 381,454 | 42,359 | 423,813 | ||||||||
Net investment in finance receivables | $ | 1,725,267 | $ | 391,860 | $ | 2,117,127 | |||||
December 31, 2012 | |||||||||||
North America | International | Total | |||||||||
Sales-type lease receivables | |||||||||||
Gross finance receivables | $ | 1,581,711 | $ | 461,510 | $ | 2,043,221 | |||||
Unguaranteed residual values | 148,664 | 21,025 | 169,689 | ||||||||
Unearned income | (316,030 | ) | (104,258 | ) | (420,288 | ) | |||||
Allowance for credit losses | (16,979 | ) | (8,662 | ) | (25,641 | ) | |||||
Net investment in sales-type lease receivables | 1,397,366 | 369,615 | 1,766,981 | ||||||||
Loan receivables | |||||||||||
Loan receivables | 414,960 | 47,293 | 462,253 | ||||||||
Allowance for credit losses | (12,322 | ) | (2,131 | ) | (14,453 | ) | |||||
Net investment in loan receivables | 402,638 | 45,162 | 447,800 | ||||||||
Net investment in finance receivables | $ | 1,800,004 | $ | 414,777 | $ | 2,214,781 |
Sales-type Lease Receivables | Loan Receivables | ||||||||||||||||||
North America | International | North America | International | Total | |||||||||||||||
Balance at January 1, 2013 | $ | 16,979 | $ | 8,662 | $ | 12,322 | $ | 2,131 | $ | 40,094 | |||||||||
Amounts charged to expense | 1,067 | 360 | 2,462 | 70 | 3,959 | ||||||||||||||
Accounts written off | (2,474 | ) | (1,255 | ) | (2,955 | ) | (389 | ) | (7,073 | ) | |||||||||
Balance at March 31, 2013 | $ | 15,572 | $ | 7,767 | $ | 11,829 | $ | 1,812 | $ | 36,980 |
March 31, 2013 | |||||||||||||||||||
Sales-type Lease Receivables | Loan Receivables | ||||||||||||||||||
North America | International | North America | International | Total | |||||||||||||||
< 31 days | $ | 1,445,912 | $ | 399,412 | $ | 375,470 | $ | 42,329 | $ | 2,263,123 | |||||||||
> 30 days and < 61 days | 36,003 | 13,952 | 9,602 | 1,126 | 60,683 | ||||||||||||||
> 60 days and < 91 days | 22,693 | 11,824 | 3,647 | 341 | 38,505 | ||||||||||||||
> 90 days and < 121 days | 6,143 | 3,735 | 1,845 | 187 | 11,910 | ||||||||||||||
> 120 days | 16,323 | 6,899 | 2,719 | 188 | 26,129 | ||||||||||||||
Total | $ | 1,527,074 | $ | 435,822 | $ | 393,283 | $ | 44,171 | $ | 2,400,350 | |||||||||
Past due amounts > 90 days | |||||||||||||||||||
Still accruing interest | $ | 6,143 | $ | 3,735 | $ | — | $ | — | $ | 9,878 | |||||||||
Not accruing interest | 16,323 | 6,899 | 4,564 | 375 | 28,161 | ||||||||||||||
Total | $ | 22,466 | $ | 10,634 | $ | 4,564 | $ | 375 | $ | 38,039 |
December 31, 2012 | |||||||||||||||||||
Sales-type Lease Receivables | Loan Receivables | ||||||||||||||||||
North America | International | North America | International | Total | |||||||||||||||
< 31 days | $ | 1,497,797 | $ | 435,780 | $ | 392,108 | $ | 45,324 | $ | 2,371,009 | |||||||||
> 30 days and < 61 days | 37,348 | 9,994 | 12,666 | 1,368 | 61,376 | ||||||||||||||
> 60 days and < 91 days | 24,059 | 5,198 | 4,577 | 285 | 34,119 | ||||||||||||||
> 90 days and < 121 days | 6,665 | 3,327 | 2,319 | 179 | 12,490 | ||||||||||||||
> 120 days | 15,842 | 7,211 | 3,290 | 137 | 26,480 | ||||||||||||||
Total | $ | 1,581,711 | $ | 461,510 | $ | 414,960 | $ | 47,293 | $ | 2,505,474 | |||||||||
Past due amounts > 90 days | |||||||||||||||||||
Still accruing interest | $ | 6,665 | $ | 3,327 | $ | — | $ | — | $ | 9,992 | |||||||||
Not accruing interest | 15,842 | 7,211 | 5,609 | 316 | 28,978 | ||||||||||||||
Total | $ | 22,507 | $ | 10,538 | $ | 5,609 | $ | 316 | $ | 38,970 |
• | Low risk accounts are companies with very good credit scores and are considered to approximate the top 30% of all commercial borrowers. |
• | Medium risk accounts are companies with average to good credit scores and are considered to approximate the middle 40% of all commercial borrowers. |
• | High risk accounts are companies with poor credit scores, are delinquent or are at risk of becoming delinquent and are considered to approximate the bottom 30% of all commercial borrowers. |
March 31, 2013 | December 31, 2012 | ||||||
Sales-type lease receivables | |||||||
Low | $ | 1,030,809 | $ | 1,016,413 | |||
Medium | 397,721 | 450,432 | |||||
High | 45,669 | 43,658 | |||||
Not Scored | 52,875 | 71,208 | |||||
Total | $ | 1,527,074 | $ | 1,581,711 | |||
Loan receivables | |||||||
Low | $ | 248,494 | $ | 254,567 | |||
Medium | 127,599 | 136,069 | |||||
High | 13,786 | 14,624 | |||||
Not Scored | 3,404 | 9,700 | |||||
Total | $ | 393,283 | $ | 414,960 |
March 31, 2013 | December 31, 2012 | ||||||
Rental receivables | $ | 78,287 | $ | 83,254 | |||
Unguaranteed residual values | 13,841 | 14,177 | |||||
Principal and interest on non-recourse loans | (50,802 | ) | (55,092 | ) | |||
Unearned income | (7,090 | ) | (7,793 | ) | |||
Investment in leveraged leases | 34,236 | 34,546 | |||||
Less: deferred taxes related to leveraged leases | (18,234 | ) | (19,372 | ) | |||
Net investment in leveraged leases | $ | 16,002 | $ | 15,174 |
March 31, 2013 | December 31, 2012 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Customer relationships | $ | 403,534 | $ | (274,203 | ) | $ | 129,331 | $ | 407,901 | $ | (269,100 | ) | $ | 138,801 | |||||||||
Supplier relationships | 29,000 | (22,838 | ) | 6,162 | 29,000 | (22,113 | ) | 6,887 | |||||||||||||||
Software & technology | 167,873 | (152,074 | ) | 15,799 | 169,632 | (151,628 | ) | 18,004 | |||||||||||||||
Trademarks & trade names | 34,554 | (32,450 | ) | 2,104 | 35,078 | (32,615 | ) | 2,463 | |||||||||||||||
Non-compete agreements | 7,372 | (7,328 | ) | 44 | 7,471 | (7,412 | ) | 59 | |||||||||||||||
Total intangible assets | $ | 642,333 | $ | (488,893 | ) | $ | 153,440 | $ | 649,082 | $ | (482,868 | ) | $ | 166,214 |
Remaining for year ended December 31, 2013 | $ | 28,120 | |
Year ended December 31, 2014 | 36,919 | ||
Year ended December 31, 2015 | 32,383 | ||
Year ended December 31, 2016 | 24,071 | ||
Year ended December 31, 2017 | 11,409 | ||
Thereafter | 20,538 | ||
Total | $ | 153,440 |
Gross value before accumulated impairment | Accumulated impairment | December 31, 2012 | Other (1) | March 31, 2013 | |||||||||||||||
North America Mailing | $ | 355,874 | $ | — | $ | 355,874 | $ | (4,164 | ) | $ | 351,710 | ||||||||
International Mailing | 183,908 | — | 183,908 | (5,664 | ) | 178,244 | |||||||||||||
Small & Medium Business Solutions | 539,782 | — | 539,782 | (9,828 | ) | 529,954 | |||||||||||||
Production Mail | 131,866 | — | 131,866 | (3,773 | ) | 128,093 | |||||||||||||
Software | 671,218 | — | 671,218 | (5,398 | ) | 665,820 | |||||||||||||
Management Services | 488,399 | (84,500 | ) | 403,899 | (1,689 | ) | 402,210 | ||||||||||||
Mail Services | 259,105 | (63,965 | ) | 195,140 | — | 195,140 | |||||||||||||
Marketing Services | 194,233 | — | 194,233 | — | 194,233 | ||||||||||||||
Enterprise Business Solutions | 1,744,821 | (148,465 | ) | 1,596,356 | (10,860 | ) | 1,585,496 | ||||||||||||
Total | $ | 2,284,603 | $ | (148,465 | ) | $ | 2,136,138 | $ | (20,688 | ) | $ | 2,115,450 |
(1) | Primarily foreign currency translation adjustments. |
March 31, 2013 | December 31, 2012 | |||||||
Term loans | $ | 230,000 | $ | 230,000 | ||||
3.875% | notes due 2013 | 375,000 | 375,000 | |||||
4.875% | notes due 2014 (1), (2) | 299,570 | 450,000 | |||||
5.0% | notes due 2015 (1) | 274,879 | 400,000 | |||||
4.75% | notes due 2016 (1) | 370,914 | 500,000 | |||||
5.75% | notes due 2017 | 500,000 | 500,000 | |||||
5.60% | notes due 2018 | 250,000 | 250,000 | |||||
4.75% | notes due 2018 | 350,000 | 350,000 | |||||
6.25% | notes due 2019 | 300,000 | 300,000 | |||||
5.25% | notes due 2022 | 110,000 | 110,000 | |||||
5.25% | notes due 2037 | 500,000 | 500,000 | |||||
6.70% | notes due 2043 (3) | 425,000 | — | |||||
Other (4) | 47,271 | 52,375 | ||||||
Total debt | 4,032,634 | 4,017,375 | ||||||
Current portion | 375,000 | 375,000 | ||||||
Long-term debt | $ | 3,657,634 | $ | 3,642,375 |
(1) | During the quarter, we completed a cash tender offer (the Tender Offer) for a portion of our 4.875% Notes due 2014, our 5.0% Notes due 2015, and our 4.75% Notes due 2016 (the Subject Notes). Holders who validly tendered their notes received the principal amount of the notes tendered, all accrued and unpaid interest and a premium amount. An aggregate $405 million of the Subject Notes were tendered. A net loss of $25 million, consisting of the premium payments, the write-off of unamortized costs and fees, partially offset by a gain from the unwinding of interest rate swap agreements, was recognized as Other expense (income), net on the Condensed Consolidated Statements of Income. |
(2) | Prior to the Tender Offer, we had interest rate swap agreements with an aggregate notional value of $450 million that effectively converted the fixed rate interest payments on these notes into variable interest rates. As a result of the Tender Offer, we unwound $225 million of these swap agreements. |
(3) | During the quarter, we issued $425 million of 30-year notes with a fixed-rate of 6.7%. Interest is payable quarterly commencing in June 2013. The notes mature in 2043, but may be redeemed, at our option, in whole or in part, at any time on or after March 7, 2018 at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest. The net proceeds from the notes were used to fund the repurchase of notes under the Tender Offer. |
(4) | Other consists of the unamortized net proceeds received from unwinding of interest rate swaps, the mark-to-market adjustment of interest rate swaps and debt discounts and premiums. |
Preferred stock | Preference stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | Total equity | ||||||||||||||||||||||||
Balance at January 1, 2013 | $ | 4 | $ | 648 | $ | 323,338 | $ | 223,847 | $ | 4,744,802 | $ | (681,213 | ) | $ | (4,500,795 | ) | $ | 110,631 | |||||||||||||
Net income | — | — | — | — | 67,506 | — | — | 67,506 | |||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | (30,761 | ) | — | (30,761 | ) | |||||||||||||||||||||
Cash dividends | |||||||||||||||||||||||||||||||
Common ($1.125 per share) | — | — | — | — | (75,334 | ) | — | — | (75,334 | ) | |||||||||||||||||||||
Preference | — | — | — | — | (13 | ) | — | — | (13 | ) | |||||||||||||||||||||
Issuances of common stock | — | — | — | (24,097 | ) | — | — | 21,551 | (2,546 | ) | |||||||||||||||||||||
Stock-based compensation expense | — | — | — | 3,704 | — | — | — | 3,704 | |||||||||||||||||||||||
Balance at March 31, 2013 | $ | 4 | $ | 648 | $ | 323,338 | $ | 203,454 | $ | 4,736,961 | $ | (711,974 | ) | $ | (4,479,244 | ) | $ | 73,187 |
Preferred stock | Preference stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | Total equity | ||||||||||||||||||||||||
Balance at January 1, 2012 | $ | 4 | $ | 659 | $ | 323,338 | $ | 240,584 | $ | 4,600,217 | $ | (661,645 | ) | $ | (4,542,143 | ) | $ | (38,986 | ) | ||||||||||||
Net income | — | — | — | — | 158,670 | — | — | 158,670 | |||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 44,539 | — | 44,539 | |||||||||||||||||||||||
Cash dividends | |||||||||||||||||||||||||||||||
Common ($1.11 per share) | — | — | — | — | (74,925 | ) | — | — | (74,925 | ) | |||||||||||||||||||||
Preference | — | — | — | — | (13 | ) | — | — | (13 | ) | |||||||||||||||||||||
Issuances of common stock | — | — | — | (18,931 | ) | — | — | 16,352 | (2,579 | ) | |||||||||||||||||||||
Conversions to common stock | — | (6 | ) | — | (121 | ) | — | — | 127 | — | |||||||||||||||||||||
Stock-based compensation expense | — | — | — | 4,337 | — | — | — | 4,337 | |||||||||||||||||||||||
Balance at March 31, 2012 | $ | 4 | $ | 653 | $ | 323,338 | $ | 225,869 | $ | 4,683,949 | $ | (617,106 | ) | $ | (4,525,664 | ) | $ | 91,043 |
Gains (losses) on cash flow hedges | Unrealized gains (losses) on available for sale securities | Defined benefit pension plans and nonpension postretirement benefit plans | Foreign currency items | Total | |||||||||||||||
Beginning balance | $ | (7,777 | ) | $ | 4,513 | $ | (759,199 | ) | $ | 81,250 | $ | (681,213 | ) | ||||||
Other comprehensive income before reclassifications (a) | 72 | (1,372 | ) | — | (42,204 | ) | (43,504 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive income (a), (b) | 466 | 1,646 | 10,631 | — | 12,743 | ||||||||||||||
Net current period other comprehensive income | 538 | 274 | 10,631 | (42,204 | ) | (30,761 | ) | ||||||||||||
Ending balance | $ | (7,239 | ) | $ | 4,787 | $ | (748,568 | ) | $ | 39,046 | $ | (711,974 | ) |
AOCI Component | Amount Reclassified from AOCI (a) | Affected Statement of Income Line Item | ||||
Gains (losses) on cash flow hedges | ||||||
Foreign exchange contracts | $ | (382 | ) | Revenue | ||
Foreign exchange contracts | 126 | Cost of sales | ||||
Interest rate lock contracts | (507 | ) | Interest expense | |||
(763 | ) | Total before tax | ||||
297 | Tax benefit | |||||
$ | (466 | ) | Net of tax | |||
Unrealized gains (losses) on available for sale securities | ||||||
$ | (2,612 | ) | Interest income | |||
966 | Tax benefit | |||||
$ | (1,646 | ) | Net of tax | |||
Defined Benefit Pension Plans and Nonpension Postretirement Benefit Plans | ||||||
Transition credit | $ | 2 | (b) | |||
Prior service costs | (198 | ) | (b) | |||
Actuarial losses | (16,574 | ) | (b) | |||
(16,770 | ) | Total before tax | ||||
6,139 | Tax benefit | |||||
$ | (10,631 | ) | Net of tax |
(b) | These items are included in the computation of net periodic costs of defined benefit pension plans and nonpension postretirement benefit plans (see Note 14 for additional details). |
March 31, 2013 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Investment securities | |||||||||||||||
Money market funds / commercial paper | $ | 532,425 | $ | 37,554 | $ | — | $ | 569,979 | |||||||
Equity securities | — | 27,198 | — | 27,198 | |||||||||||
Commingled fixed income securities | — | 29,378 | — | 29,378 | |||||||||||
Debt securities - U.S. and foreign governments, agencies and municipalities | 122,589 | 24,640 | — | 147,229 | |||||||||||
Debt securities - corporate | — | 43,468 | — | 43,468 | |||||||||||
Mortgage-backed / asset-backed securities | — | 160,489 | — | 160,489 | |||||||||||
Derivatives | |||||||||||||||
Interest rate swaps | — | 3,980 | — | 3,980 | |||||||||||
Foreign exchange contracts | — | 1,654 | — | 1,654 | |||||||||||
Total assets | $ | 655,014 | $ | 328,361 | $ | — | $ | 983,375 | |||||||
Liabilities: | |||||||||||||||
Derivatives | |||||||||||||||
Foreign exchange contracts | $ | — | $ | (3,288 | ) | $ | — | $ | (3,288 | ) | |||||
Total liabilities | $ | — | $ | (3,288 | ) | $ | — | $ | (3,288 | ) |
December 31, 2012 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Investment securities | |||||||||||||||
Money market funds / commercial paper | $ | 581,648 | $ | 34,369 | $ | — | $ | 616,017 | |||||||
Equity securities | — | 25,106 | — | 25,106 | |||||||||||
Commingled fixed income securities | — | 29,359 | — | 29,359 | |||||||||||
Debt securities - U.S. and foreign governments, agencies and municipalities | 124,221 | 18,908 | — | 143,129 | |||||||||||
Debt securities - corporate | — | 43,926 | — | 43,926 | |||||||||||
Mortgage-backed / asset-backed securities | — | 162,375 | — | 162,375 | |||||||||||
Derivatives | |||||||||||||||
Interest rate swaps | — | 10,117 | — | 10,117 | |||||||||||
Foreign exchange contracts | — | 2,582 | — | 2,582 | |||||||||||
Total assets | $ | 705,869 | $ | 326,742 | $ | — | $ | 1,032,611 | |||||||
Liabilities: | |||||||||||||||
Derivatives | |||||||||||||||
Foreign exchange contracts | $ | — | $ | (1,174 | ) | $ | — | $ | (1,174 | ) | |||||
Total liabilities | $ | — | $ | (1,174 | ) | $ | — | $ | (1,174 | ) |
• | Money Market Funds / Commercial Paper: Money market funds typically invest in government securities, certificates of deposit, commercial paper and other highly liquid, low-risk securities. Money market funds are principally used for overnight deposits and are classified as Level 1 when unadjusted quoted prices in active markets are available and as Level 2 when they are not actively traded on an exchange. Direct investments in commercial paper are not listed on an exchange in an active market and are classified as Level 2. |
• | Equity Securities: Equity securities are comprised of mutual funds investing in U.S. and foreign common stock. These mutual funds are classified as Level 2 as they are not separately listed on an exchange. |
• | Commingled Fixed Income Securities: Mutual funds that invest in a variety of fixed income securities including securities of the U.S. government and its agencies, corporate debt, mortgage-backed securities and asset-backed securities. The value of the funds is based on the market value of the underlying investments owned by each fund, minus its liabilities, divided by the number of shares outstanding, as reported by the fund manager. These commingled funds are not listed on an exchange in an active market and are classified as Level 2. |
• | Debt Securities – U.S. and Foreign Governments, Agencies and Municipalities: Debt securities are classified as Level 1 where active, high volume trades for identical securities exist. Valuation adjustments are not applied to these securities. Debt securities valued using quoted market prices for similar securities or benchmarking model derived prices to quoted market prices and trade data for identical or comparable securities are classified as Level 2. |
• | Debt Securities – Corporate: Corporate debt securities are valued using recently executed transactions, market price quotations where observable, or bond spreads. The spread data used are for the same maturity as the security. These securities are classified as Level 2. |
• | Mortgage-Backed Securities (MBS) / Asset-Backed Securities (ABS): These securities are valued based on external pricing indices. When external index pricing is not observable, MBS and ABS are valued based on external price/spread data. These securities are classified as Level 2. |
March 31, 2013 | |||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||
Money market funds / commercial paper | $ | 14,402 | $ | 42 | $ | — | $ | 14,444 | |||||||
U.S. and foreign governments, agencies and municipalities | 123,272 | 3,707 | (135 | ) | 126,844 | ||||||||||
Corporate | 40,772 | 2,744 | (48 | ) | 43,468 | ||||||||||
Mortgage-back / asset-back securities | 158,030 | 3,203 | (744 | ) | 160,489 | ||||||||||
Total | $ | 336,476 | $ | 9,696 | $ | (927 | ) | $ | 345,245 |
December 31, 2012 | |||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||
Money market funds / commercial paper | $ | 44,611 | $ | 53 | $ | — | $ | 44,664 | |||||||
U.S. and foreign governments, agencies and municipalities | 127,807 | 3,972 | (56 | ) | 131,723 | ||||||||||
Corporate | 41,095 | 2,851 | (20 | ) | 43,926 | ||||||||||
Mortgage-back / asset-back securities | 162,180 | 3,340 | (3,145 | ) | 162,375 | ||||||||||
Total | $ | 375,693 | $ | 10,216 | $ | (3,221 | ) | $ | 382,688 |
Amortized cost | Estimated fair value | ||||||
Within 1 year | $ | 53,086 | $ | 53,218 | |||
After 1 year through 5 years | 40,122 | 41,610 | |||||
After 5 years through 10 years | 76,310 | 79,377 | |||||
After 10 years | 166,958 | 171,040 | |||||
Total | $ | 336,476 | $ | 345,245 |
Designation of Derivatives | Balance Sheet Location | March 31, 2013 | December 31, 2012 | |||||||
Derivatives designated as hedging instruments | Other current assets and prepayments: | |||||||||
Foreign exchange contracts | $ | 558 | $ | 78 | ||||||
Other assets: | ||||||||||
Interest rate swaps | 3,980 | 10,117 | ||||||||
Accounts payable and accrued liabilities: | ||||||||||
Foreign exchange contracts | (425 | ) | (320 | ) | ||||||
Derivatives not designated as hedging instruments | Other current assets and prepayments: | |||||||||
Foreign exchange contracts | 1,096 | 2,504 | ||||||||
Accounts payable and accrued liabilities: | ||||||||||
Foreign exchange contracts | (2,863 | ) | (854 | ) | ||||||
Total derivative assets | $ | 5,634 | $ | 12,699 | ||||||
Total derivative liabilities | (3,288 | ) | (1,174 | ) | ||||||
Total net derivative assets | $ | 2,346 | $ | 11,525 |
Three Months Ended March 31, | ||||||||||||||||||
Derivative Gain Recognized in Earnings | Hedged Item Expense Recognized in Earnings | |||||||||||||||||
Derivative Instrument | Location of Gain (Loss) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Interest rate swaps | Interest expense | $ | 1,993 | $ | 3,327 | $ | (5,484 | ) | $ | (10,109 | ) |
Three Months Ended March 31, | ||||||||||||||||||
Derivative Gain (Loss) Recognized in AOCI (Effective Portion) | Location of Gain (Loss) (Effective Portion) | Gain (Loss) Reclassified from AOCI to Earnings (Effective Portion) | ||||||||||||||||
Derivative Instrument | 2013 | 2012 | 2013 | 2012 | ||||||||||||||
Foreign exchange contracts | $ | 630 | $ | (659 | ) | Revenue | $ | (382 | ) | $ | 301 | |||||||
Cost of sales | 126 | (66 | ) | |||||||||||||||
$ | (256 | ) | $ | 235 |
Three Months Ended March 31, | ||||||||||
Derivative Gain (Loss) Recognized in Earnings | ||||||||||
Derivatives Instrument | Location of Derivative Gain (Loss) | 2013 | 2012 | |||||||
Foreign exchange contracts | Selling, general and administrative expense | $ | (4,351 | ) | $ | (4,224 | ) |
March 31, 2013 | December 31, 2012 | ||||||
Carrying value | $ | 4,032,634 | $ | 4,017,375 | |||
Fair value | $ | 4,229,484 | $ | 4,200,970 |
Severance and benefits costs | Other exit costs | Total | |||||||||
Balance at January 1, 2013 | $ | 62,540 | $ | 5,218 | $ | 67,758 | |||||
Cash payments | (15,022 | ) | (1,253 | ) | (16,275 | ) | |||||
Balance at March 31, 2013 | $ | 47,518 | $ | 3,965 | $ | 51,483 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Revenue: | |||||||
North America Mailing | $ | 430,375 | $ | 461,305 | |||
International Mailing | 167,455 | 168,014 | |||||
Small & Medium Business Solutions | 597,830 | 629,319 | |||||
Production Mail | 118,802 | 115,016 | |||||
Software | 80,721 | 100,327 | |||||
Management Services | 225,256 | 230,630 | |||||
Mail Services | 118,855 | 114,636 | |||||
Marketing Services | 25,492 | 30,208 | |||||
Enterprise Business Solutions | 569,126 | 590,817 | |||||
Total revenue | $ | 1,166,956 | $ | 1,220,136 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
EBIT: | |||||||
North America Mailing | $ | 154,505 | $ | 178,171 | |||
International Mailing | 17,749 | 19,997 | |||||
Small & Medium Business Solutions | 172,254 | 198,168 | |||||
Production Mail | 3,055 | 2,779 | |||||
Software | 4,890 | 10,692 | |||||
Management Services | 12,545 | 13,315 | |||||
Mail Services | 19,349 | 34,245 | |||||
Marketing Services | 1,986 | 4,817 | |||||
Enterprise Business Solutions | 41,825 | 65,848 | |||||
Total EBIT | 214,079 | 264,016 | |||||
Reconciling items: | |||||||
Interest, net (1) | (48,866 | ) | (48,773 | ) | |||
Unallocated corporate and other expenses | (63,502 | ) | (54,214 | ) | |||
Income from continuing operations before income taxes | $ | 101,711 | $ | 161,029 |
Three Months Ended March 31, | |||||||||||||||
United States | Foreign | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Service cost | $ | 3,799 | $ | 4,954 | $ | 1,582 | $ | 2,018 | |||||||
Interest cost | 18,371 | 20,603 | 6,823 | 6,923 | |||||||||||
Expected return on plan assets | (27,086 | ) | (30,618 | ) | (8,166 | ) | (8,023 | ) | |||||||
Amortization of transition credit | — | — | (2 | ) | (2 | ) | |||||||||
Amortization of prior service cost | 129 | 205 | 28 | 28 | |||||||||||
Amortization of net actuarial loss | 11,037 | 13,314 | 3,176 | 3,496 | |||||||||||
Curtailment | 814 | — | — | — | |||||||||||
Net periodic benefit cost | $ | 7,064 | $ | 8,458 | $ | 3,441 | $ | 4,440 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Service cost | $ | 1,017 | $ | 891 | |||
Interest cost | 2,514 | 3,075 | |||||
Amortization of prior service credit | 41 | (523 | ) | ||||
Amortization of net actuarial loss | 2,361 | 2,367 | |||||
Net periodic benefit cost | $ | 5,933 | $ | 5,810 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Numerator: | |||||||
Amounts attributable to common stockholders: | |||||||
Net income from continuing operations | $ | 69,568 | $ | 140,942 | |||
(Loss) income from discontinued operations | (2,062 | ) | 17,728 | ||||
Net income - Pitney Bowes Inc. (numerator for diluted EPS) | 67,506 | 158,670 | |||||
Less: Preference stock dividend | (13 | ) | (13 | ) | |||
Income attributable to common stockholders (numerator for basic EPS) | $ | 67,493 | $ | 158,657 | |||
Denominator (in thousands): | |||||||
Weighted-average shares used in basic EPS | 201,148 | 199,960 | |||||
Effect of dilutive shares: | |||||||
Preferred stock | 2 | 2 | |||||
Preference stock | 396 | 398 | |||||
Stock plans | 664 | 312 | |||||
Weighted-average shares used in diluted EPS | 202,210 | 200,672 | |||||
Basic earnings per share: | |||||||
Continuing operations | $ | 0.35 | $ | 0.70 | |||
Discontinued operations | (0.01 | ) | 0.09 | ||||
Net income | $ | 0.34 | $ | 0.79 | |||
Diluted earnings per share: | |||||||
Continuing operations | $ | 0.34 | $ | 0.70 | |||
Discontinued operations | (0.01 | ) | 0.09 | ||||
Net income | $ | 0.33 | $ | 0.79 | |||
Anti-dilutive shares not used in calculating diluted weighted-average shares (in thousands): | 13,868 | 13,811 |
• | declining physical mail volumes |
• | mailers’ utilization of alternative means of communication or competitors’ products |
• | access to capital at a reasonable cost to continue to fund various discretionary priorities, including business investments, pension contributions and dividend payments |
• | timely development and acceptance of new products and services |
• | successful entry into new markets |
• | success in gaining product approval in new markets where regulatory approval is required |
• | changes in postal or banking regulations |
• | interrupted use of key information systems |
• | third-party suppliers’ ability to provide product components, assemblies or inventories |
• | our success at managing the relationships with our outsource providers, including the costs of outsourcing functions and operations not central to our business |
• | changes in privacy laws |
• | intellectual property infringement claims |
• | regulatory approvals and satisfaction of other conditions to consummate and integrate any acquisitions |
• | negative developments in economic conditions, including adverse impacts on customer demand |
• | our success at managing customer credit risk |
• | significant changes in pension, health care and retiree medical costs |
• | changes in interest rates, foreign currency fluctuations or credit ratings |
• | income tax adjustments or other regulatory levies for prior audit years and changes in tax laws, rulings or regulations |
• | impact on mail volume resulting from concerns over the use of the mail for transmitting harmful biological agents |
• | changes in international or national political conditions, including any terrorist attacks |
• | acts of nature |
Revenue | ||||||||||
Three Months Ended March 31, | ||||||||||
($ amounts in 000s) | 2013 | 2012 | % change | |||||||
Equipment sales | $ | 214,999 | $ | 220,179 | (2 | )% | ||||
Supplies | 74,287 | 76,365 | (3 | )% | ||||||
Software | 87,012 | 104,350 | (17 | )% | ||||||
Rentals | 136,379 | 140,389 | (3 | )% | ||||||
Financing | 116,762 | 126,748 | (8 | )% | ||||||
Support services | 165,486 | 173,518 | (5 | )% | ||||||
Business services | 372,031 | 378,587 | (2 | )% | ||||||
Total revenue | $ | 1,166,956 | $ | 1,220,136 | (4 | )% | ||||
Cost of revenue | |||||||||||||
Three Months Ended March 31, | |||||||||||||
Percentage of Revenue | |||||||||||||
($ amounts in 000s) | 2013 | 2012 | 2013 | 2012 | |||||||||
Cost of equipment sales | $ | 109,337 | $ | 96,916 | 50.9 | % | 44.0 | % | |||||
Cost of supplies | 23,262 | 23,871 | 31.3 | % | 31.3 | % | |||||||
Cost of software | 20,706 | 21,093 | 23.8 | % | 20.2 | % | |||||||
Cost of rentals | 27,755 | 30,225 | 20.4 | % | 21.5 | % | |||||||
Financing interest expense | 19,875 | 21,139 | 17.0 | % | 16.7 | % | |||||||
Cost of support services | 108,009 | 115,087 | 65.3 | % | 66.3 | % | |||||||
Cost of business services | 291,648 | 286,817 | 78.4 | % | 75.8 | % | |||||||
Total cost of revenue | $ | 600,592 | $ | 595,148 | 51.5 | % | 48.8 | % |
Revenue | Three Months Ended March 31, | |||||||||
($ amounts in 000s) | 2013 | 2012 | % change | |||||||
North America Mailing | $ | 430,375 | $ | 461,305 | (7 | )% | ||||
International Mailing | 167,455 | 168,014 | — | % | ||||||
Small & Medium Business Solutions | 597,830 | 629,319 | (5 | )% | ||||||
Production Mail | 118,802 | 115,016 | 3 | % | ||||||
Software | 80,721 | 100,327 | (20 | )% | ||||||
Management Services | 225,256 | 230,630 | (2 | )% | ||||||
Mail Services | 118,855 | 114,636 | 4 | % | ||||||
Marketing Services | 25,492 | 30,208 | (16 | )% | ||||||
Enterprise Business Solutions | 569,126 | 590,817 | (4 | )% | ||||||
Total | $ | 1,166,956 | $ | 1,220,136 | (4 | )% |
EBIT | Three Months Ended March 31, | |||||||||
($ amounts in 000s) | 2013 | 2012 | % change | |||||||
North America Mailing | $ | 154,505 | $ | 178,171 | (13 | )% | ||||
International Mailing | 17,749 | 19,997 | (11 | )% | ||||||
Small & Medium Business Solutions | 172,254 | 198,168 | (13 | )% | ||||||
Production Mail | 3,055 | 2,779 | (10 | )% | ||||||
Software | 4,890 | 10,692 | (54 | )% | ||||||
Management Services | 12,545 | 13,315 | (6 | )% | ||||||
Mail Services | 19,349 | 34,245 | (43 | )% | ||||||
Marketing Services | 1,986 | 4,817 | (59 | )% | ||||||
Enterprise Business Solutions | 41,825 | 65,848 | (36 | )% | ||||||
Total | $ | 214,079 | $ | 264,016 | (19 | )% |
Exhibit Number | Description | Status or incorporation by reference | |
10(f) | Pitney Bowes Pension Restoration Plan (Amended and Restated as of March 31, 2013) | Exhibit 10(f) | |
10(g) | Pitney Bowes Senior Executive Severance Policy (As Amended and Restated Effective as of March 1, 2013) | Exhibit 10(g) | |
12 | Computation of ratio of earnings to fixed charges | Exhibit 12 | |
31.1 | Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | Exhibit 31.1 | |
31.2 | Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | Exhibit 31.2 | |
32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 | Exhibit 32.1 | |
32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 | Exhibit 32.2 | |
101.INS | XBRL Report Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | ||
101.DEF | XBRL Taxonomy Definition Linkbase Document | ||
101.LAB | XBRL Taxonomy Label Linkbase Document | ||
101.PRE | XBRL Taxonomy Presentation Linkbase Document |
PITNEY BOWES INC. | ||
Date: | May 3, 2013 | |
/s/ Michael Monahan | ||
Michael Monahan | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
/s/ Steven J. Green | ||
Steven J. Green | ||
Vice President – Finance and Chief Accounting Officer | ||
(Principal Accounting Officer) |
Exhibit Number | Description | Status or incorporation by reference | |
10(f) | Pitney Bowes Pension Restoration Plan (Amended and Restated as of March 31, 2013) | Exhibit 10(f) | |
10(g) | Pitney Bowes Senior Executive Severance Policy (As Amended and Restated Effective as of March 1, 2013) | Exhibit 10(g) | |
12 | Computation of ratio of earnings to fixed charges | Exhibit 12 | |
31.1 | Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | Exhibit 31.1 | |
31.2 | Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | Exhibit 31.2 | |
32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 | Exhibit 32.1 | |
32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 | Exhibit 32.2 | |
101.INS | XBRL Report Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | ||
101.DEF | XBRL Taxonomy Definition Linkbase Document | ||
101.LAB | XBRL Taxonomy Label Linkbase Document | ||
101.PRE | XBRL Taxonomy Presentation Linkbase Document |
I. | Name and Purpose of Plan |
A. | Default Distribution: |
B. | Alternate Distributions: |
C. | Timing of Elections: |
D. | Death: |
E. | Change of Control. |
F. | Small Balances: |
G. | Interest Rate. |
H. | Rollovers. |
I. | Statutory/Regulatory Elections. |
J. | Lost Participants or Beneficiaries |
1.1 | Purpose 1 |
2.1 | Annual Incentive 2 |
2.2 | Average Annual Incentive Award 2 |
2.3 | Annual Salary 2 |
2.4 | Board 2 |
2.5 | Change of Control 2 |
2.6 | Code 3 |
2.7 | Company 3 |
2.8 | Date of the Change of Control 3 |
2.9 | Date of Termination 3 |
2.10 | Employee 3 |
2.11 | ERISA 4 |
2.12 | Participant 4 |
2.13 | Plan 4 |
2.14 | Restatement Effective Date 4 |
2.15 | Separation Period 4 |
9.1 | Non-Alienability 14 |
9.2 | Eligibility for Other Benefits 14 |
9.3 | Unfunded Plan Status 14 |
9.4 | Death 14 |
9.5 | I.R.C. Section 409A 14 |
9.6 | Validity and Severability 15 |
9.7 | Governing Law 15 |
9.8 | Plan Records 15 |
9.9 | Legal Service 15 |
1.1 | The purpose of the Plan is to provide certain designated senior executive employees with continued compensation and benefits, subject to the specific terms and conditions set forth in the Plan, in the event there is a Change of Control and the covered executive incurs a Termination of Employment. In addition, the Plan is intended to provide an incentive to covered executives to continue to perform their job duties on behalf of the Company where the Company is faced with a Change of Control. No Change of Control has occurred under the terms of the Plan as of the effective date of this restatement. |
2.1 | “Annual Incentive” shall mean the annual incentive, also referred to as the Pitney Bowes Incentive Plan (PBIP), that a Participant is eligible to earn under the Pitney Bowes Key Employee Incentive Plan. |
2.2 | “Average Annual Incentive Award” shall mean the average Annual Incentive amount a Participant received over the three consecutive twelve month periods prior to the Date of Termination. A partial year Annual Incentive amount should be annualized in making this calculation. |
2.3 | “Annual Salary” shall mean the Participant’s regular annual base salary in effect immediately prior to his or her Date of Termination, including cash compensation converted to other benefits under a flexible benefit arrangement maintained by the Company or deferred pursuant to a written plan or agreement with the Company, but excluding any type of allowances, reimbursements, premium pay, Cash Incentive Units, sign-on bonus, stock options and any actual gain thereon, prizes, awards, special bonuses and incentive payments other than the Annual Incentive. |
2.4 | “Board” shall mean the Board of Directors of the Company. |
2.5 | “Change of Control“ For purposes of this Plan, a "Change of Control" shall be deemed to have occurred if: |
2.6 | “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. |
2.7 | “Company“ shall mean Pitney Bowes Inc. and any successor thereto. |
2.8 | “Date of the Change of Control” shall mean the date on which a Change of Control is determined to first occur. |
2.9 | “Date of Termination” shall mean the date on which a Participant incurs a Termination of Employment as defined in Section 5.1 hereof. |
2.10 | “Employee” shall mean any regular full‑time employee of the Company or a wholly-owned, fully-integrated subsidiary or affiliate of the Company. |
2.11 | “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder. |
2.12 | “Participant” shall mean an Employee who is designated as a Participant pursuant to Section III hereof. |
2.13 | “Plan” shall mean the Pitney Bowes Senior Executive Severance Policy as amended and restated effective as of March 1, 2013. |
2.14 | “Restatement Effective Date” shall mean March 1, 2013. |
2.15 | “Separation Period” shall mean (i) for Participants who are in compensation Bands I or J on the Change of Control, the period beginning on a Participant’s Date of Termination and ending on the second anniversary thereof (ii) for Participants who are in compensation Band H, or Participants who are elected corporate officers of Pitney Bowes Inc. but not in compensation Bands I or J, the period beginning on a Participant's Date of Termination and ending on the expiration of 78 weeks following the Participant’s Date of Termination. |
3.1 | Each Employee who falls within compensation Bands H, I or J or who is an elected corporate officer of Pitney Bowes Inc. not in compensation Bands H, I or J shall be a Participant in the Plan. |
3.2 | Prior to the time a Change of Control has occurred, the Board may, in its sole discretion, without notice, amend, modify or terminate the eligibility of certain individual Employees or classes of Employees or Participants to participate in the Plan; provided, however, that such eligibility or participation may not be so amended, modified or terminated in connection with an actual, threatened, or proposed Change of Control in any manner which would result in an Employee or Participant otherwise becoming ineligible to participate in the Plan; and provided further that any amendment, modification or termination of the definition of an Employee or Participant’s participation in the Plan occurring within one year prior to a Change of Control shall be deemed to be in connection with an actual, threatened, or proposed Change of Control and shall be void. |
4.1 | If any Participant incurs a Termination of Employment within two years after a Change of Control occurs (whether or not such termination is a result of such Change of Control) or a Participant is terminated within sixty (60) days before a Change of Control at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or otherwise in connection with or in anticipation of a Change of Control, and a Change of Control subsequently occurs, the Company shall pay such Participant separation benefits as determined in Section 4.2 hereof and the benefits as determined in Sections 4.3 and 4.4 hereof. For purposes of determining the benefits set forth in Sections 4.3 and 4.4, if the Participant incurs a Termination of Employment following a reduction of the Participant’s Annual Salary, opportunity to earn an Annual Incentive, or other compensation or employee benefits, such reduction shall not be given effect. Separation benefits as described in this Section shall be paid either (a) in one lump sum within fifteen (15) days of the Date of Termination or (b) in a stream of payments payable on regular pay periods following the Date of Termination only if the Change of Control event does not meet the definition of “change of control” under IRC Section 409A (as defined in Section 9.4 herein) and if required to be paid in that fashion by IRC 409A to avoid the additional tax imposed by IRC Section 409A; with such stream of payments continuing over the severance period used to calculate the severance benefits under Section 4.2 herein. If the termination of employment occurs before the Change of Control and is on account of the Change of Control, “fifteen (15) days” in the immediately prior sentence becomes “ninety (90) days” of the Date of Termination. |
4.2 | Separation benefits described in Section 4.1 hereof shall be determined as described below: |
(a) | For a Participant in compensation Bands I or J, an amount equal to the product of (1) two times (2) the sum of (x) the Participant’s Annual Salary and (y) the Participant’s Average Annual Incentive Award. |
(b) | An amount equal to the difference between (1) the lump sum actuarial equivalent of the benefit under the Company’s qualified defined benefit retirement plan (the “Pension Plan”) and any excess or supplemental defined |
4.3 | During the Separation Period, the Participant and his or her Dependents shall continue to be provided with the medical, prescription drug, dental and life insurance and other health and welfare benefits in which the Participant has coverage under the plans or programs of the Company or its affiliates at the Date of Termination as if the Participant’s employment had not been terminated, unless the Participant elects to decline such coverage; provided, however, that if the Participant becomes reemployed with another employer and is eligible to receive a particular benefit described above under another employer‑provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Participant for retiree medical, dental and life insurance benefits under the Company’s plans, practices, programs and policies, the Participant shall be considered to have remained employed during the Separation Period and to have retired or terminated employment on the last day of such period. The “COBRA” continuation period for a Participant shall commence following the last day of the Separation Period. |
4.4 | The Company shall, at its sole expense, provide the Participant with outplacement services, the scope and provider of which shall be selected by the Company from the list of vendors the Company used to provide those services before the Change |
4.5 | To the extent any benefits described in this Section 4 cannot be provided to the Participant pursuant to the appropriate plan or program maintained for Company employees in which a Participant participates, including, without limitation, because the coverage would cause the benefit plan to become discriminatory, the Company shall provide such benefits outside such plan or program at no additional cost (including, without limitation, tax cost) to the Participant. |
4.6 | The cash lump sum payment and continuation benefits set forth in Sections 4.1, 4.2, 4.3 and 4.4 shall be payable in addition to, and not in lieu of, all other accrued or vested or earned but deferred rights, options or other benefits which may be owed to a Participant upon or following termination, including but not limited to regular Annual Salary earned but unpaid as of the Date of Termination, Annual Incentives earned but unpaid as of the Date of Termination, accrued vacation or sick pay, amounts or benefits payable under any incentive (other than the Annual Incentive) or other compensation plans, stock option plan, stock ownership plan, stock purchase plan, life insurance plan, health plan, disability plan or similar or successor plan. Amounts received under this Plan, shall not be duplicative of any severance pay or pay in lieu of required notice under any applicable federal, state or local law, including, without limitation, the federal Worker Adjustment and Retraining Notification Act paid or payable by the Company to the Participant. In addition, any severance pay benefits made hereunder shall be reduced by the amount of statutory severance benefits paid to the participant if the Company had contributed to the fund or statutory scheme under which the benefits are paid. |
5.1 | For purposes of the Plan, "Termination of Employment" shall include a termination of employment by the Participant for any of the following Good Reasons, subject to Section 5.3 below: |
1. | The assignment following a Change of Control to a Participant of any duties inconsistent in any respect with the Participant’s position, authority, duties and responsibilities as existed on the day immediately prior to the Change of Control, or any other action by the Company which results in a diminution in such position, authority, duties, or responsibilities, excluding for this purpose an isolated, insubstantial, and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Participant; |
2. | Any failure by the Company following a Change of Control to continue to provide the Participant with Annual Salary, employee benefits, or other compensation equal to or greater than that to which such Participant was entitled immediately prior to the Date of the Change of Control, other than an isolated, insubstantial, and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Participant; |
3. | Any failure by the Company following a Change of Control to continue to provide the Participant with the opportunity to earn Annual Incentives (and long-term incentive compensation as applicable) on a basis at least equal to that provided to the Participant prior to the Date of the Change of Control, taking into account the level of compensation that can be earned and the relative difficulty of any associated performance goals; |
4. | The Company’s requiring the Participant, after a Change of Control, to be based, at any office or location more than 35 miles farther from the Participant’s place of residence than the office or location at which the Participant is employed immediately prior to the Date of the Change of Control or the Company's requiring the Participant to travel on Company business to a substantially greater extent than required immediately before the Change of Control; |
5. | Any failure by the Company, after a Change of Control, to require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) who acquired all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform the Company’s obligations under the Plan in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. |
5.2 | Any termination by the Company or by the Participant in accordance with Section 5.1 shall be communicated by a Notice of Termination to the other party. Any Notice of Termination shall be by written instrument which (i) indicates the specific termination provision in Section 5.1 above relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Participant’s employment under the provision so indicated, and (iii) if the Date of Termination is other than the date of receipt of such notice, specifies the Date of Termination (which date shall not be more than 15 days after the giving of such notice). The failure by any Participant to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of entitlement to terminate under subparagraphs 1 through 5 of Section 5.1 above shall not be deemed to be a waiver of any right of such Participant or preclude such Participant from asserting such fact or circumstance in enforcing his rights. |
5.3 | Notwithstanding the foregoing, a Termination of Employment for Good Reason under Section 5.1 shall not occur if, within 30 days after the date the Participant gives a Notice of Termination to the Company after a Change of Control, the Company corrects the action or failure to act that constitutes the grounds for termination for Good Reason as described in Section 5.1 and as set forth in the Participant’s Notice of Termination. If the Company does not correct the action or failure to act, the Participant must terminate his or her employment for Good Reason within 60 days after the end of the cure period, in order for the termination to be considered a Good Reason termination. |
6.1 | The Plan Administrator shall be the Board or its delegate. If an Employee or former Employee makes a written request alleging a right to receive benefits under this Plan or alleging a right to receive an adjustment in benefits being paid under the Plan, the Board shall treat it as a claim for benefits. All claims for benefits under the Plan shall be sent to the Executive Vice President Chief Human Resources Officer, or equivalent position, and must be received within 90 days after Termination of Employment. If the Board determines that any individual who has claimed a right to receive benefits, or different benefits, under the Plan is not entitled to receive all or any part of the benefits claimed, it will inform the claimant in writing of its determination and the reasons therefore in terms calculated to be understood by the claimant. The notice will be sent within 90 days of the claim unless the Board determines additional time, not exceeding 90 days, is needed. The notice shall make specific reference to the pertinent Plan provisions on which the denial is based, and describe any additional material or information as necessary. Such notice shall, in addition, inform the claimant what procedure the claimant should follow to take advantage of the review procedures set forth below in the event the claimant desires to contest the denial of the claim. The claimant may within 90 days thereafter submit in writing to the Board a notice that the claimant contests the denial of his or her claim by the Board and desires a further review. The Board shall within 60 days thereafter review the claim and authorize the claimant and his or her personal representative to appear personally and review pertinent documents and submit issues and comments relating to the claim to the persons responsible for making the determination on behalf of the Board. The Board will render its final decision with specific reasons therefore in writing and will transmit it to the claimant within 60 days of the written request for review, unless the Board determines additional time, not exceeding 60 days, is needed, and so notifies the Participant. If the Company fails to respond to a claim filed in accordance with the foregoing within 60 days or any such extended period, the Company shall be deemed to have denied the claim. |
7.1 | This Plan is established by the Company on a voluntary basis and not as consideration for services rendered in the past, and the benefits herein are provided at the will of the Company. Neither the establishment of this Plan nor the payment of benefits by the Company shall be construed or interpreted as a condition of employment, nor shall this Plan modify or enlarge any rights of any person covered by it to be continued or to be retained in the employ of the Company. |
8.1 | In the event that any benefits payable to a Participant pursuant to the Plan (“Payments”) (i) constitute “parachute payments” within the meaning of Section 280G of the Code, and (ii) but for this Section VIII would be subject to the excise tax imposed by Section 4999 of the Code, or any comparable successor provisions (the “Excise Tax”), then the Eligible Individual’s Payments hereunder shall be either (x) provided to the Participant in full, or (y) provided to the Participant as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by the Participant, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under the Excise Tax. In the event that the payments and/or benefits are to be reduced pursuant to this Section VIII, such payments and benefits shall be reduced such that the reduction of compensation to be provided to the Participant as a result of this Section VIII is minimized. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A of the Code and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero. Unless the Company and the Participant otherwise agree in writing, any determination required under this Section VIII shall be made in writing, in good faith and following the intent of this section by a nationally recognized accounting firm selected by the Company (the “Accountants”). The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section VIII. |
9.1 | Non‑Alienability. No benefit or payments provided hereunder shall be subject to any forms of sale, assignment or transfer. Benefits provided by this Plan shall not be subject to attachment, garnishment or other legal or equitable proceedings by creditors or persons representing creditors. Such payments are, however, subject to all applicable taxes and appropriate withholdings. |
9.2 | Eligibility for Other Benefits. This Plan shall have no effect on the Participant’s eligibility for other benefits customarily provided after termination unless otherwise stated in a written agreement executed by an authorized representative of the Company. The payments of benefits under this Plan shall not be deemed to be a continuation of employment, pay, or credited service for purposes of determining the availability, nature, or extent of the Company's benefit plans, programs or policies, except as expressly set forth herein. |
9.3 | Unfunded Plan Status. This Plan is intended to be an unfunded plan maintained primarily for the purpose of providing nonqualified deferred compensation for a select group of management or highly compensated employees, within the meaning of Section 401 of ERISA. This Plan is not intended to qualify as an ERISA welfare benefit plan. All payments pursuant to the Plan shall be made from the general funds of the Company and no special or separate fund shall be established or other segregation of assets made to assure payment. No Participant or other person shall have under any circumstances any interest in any particular property or assets of the Company as a result of participating in the Plan. Notwithstanding the foregoing, the Company may (but shall not be obligated to) create one or more grantor trusts, the assets of which are subject to the claims of the Company’s creditors, to assist it in accumulating funds to pay its obligations under the Plan. |
9.4 | Death. In case of death, any unpaid payment or benefits to which the Participant was entitled at the time of death shall be paid to the Participant’s survivors or estate |
9.5 | I.R.C. Section 409A. If and to the extent that Section 409A of the Internal Revenue Code applies to amounts payable under the Plan, distributions may only be made under the Plan upon an event and in a manner permitted by Section 409A. To the extent that any provision of the Plan would cause a conflict with any applicable requirements of Section 409A, or would cause the administration of the Plan to fail to satisfy the applicable requirements of section 409A, such provision shall be deemed null and void. It is intended that this Plan comply with the Change of Control provisions of Section 409A. |
9.6 | Validity and Severability. The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision of the Plan, which shall remain in full force and effect, and any prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. |
9.7 | Governing Law. The validity, interpretation, construction and performance of the Plan shall in all respects be governed by the laws of the State of Connecticut without reference to principles of conflict of law, except to the extent pre‑empted by federal law. |
9.8 | Plan Records. The records for this Plan are kept on a plan year beginning on January 1 and ending on the following December 31. |
9.9 | Legal Service. The person designated to receive legal papers or summons in connection with this Plan is the Corporate Secretary, Pitney Bowes Inc., World Headquarters, Stamford CT 06926‑0700. |
Three Months Ended March 31, | |||||||
(Dollars in thousands) | 2013 | 2012 | |||||
Income from continuing operations before income taxes | $ | 101,711 | $ | 161,029 | |||
Add: | |||||||
Interest expense (1) | 50,614 | 50,506 | |||||
Portion of rents representative of the interest factor | 8,296 | 8,871 | |||||
Amortization of capitalized interest | 243 | 243 | |||||
Income as adjusted | $ | 160,864 | $ | 220,649 | |||
Fixed charges: | |||||||
Interest expense (1) | $ | 50,614 | $ | 50,506 | |||
Portion of rents representative of the interest factor | 8,296 | 8,871 | |||||
Noncontrolling interests (preferred stock dividends of subsidiaries), excluding taxes | 6,960 | 6,950 | |||||
Total fixed charges | $ | 65,870 | $ | 66,327 | |||
Ratio of earnings to fixed charges (2) | 2.44 | 3.33 | |||||
(1) | Interest expense includes both financing interest expense and other interest expense. |
(2) | The computation of the ratio of earnings to fixed charges has been computed by dividing income from continuing operations before income taxes as adjusted by fixed charges. Included in fixed charges is one-third of rent expense as the representative portion of interest. |
1. | I have reviewed this quarterly report on Form 10-Q of Pitney Bowes Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Marc B. Lautenbach | ||||
Marc B. Lautenbach | ||||
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Pitney Bowes Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Michael Monahan | |||
Michael Monahan | |||
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Marc B. Lautenbach | |||
Marc B. Lautenbach | |||
President and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Michael Monahan | |||
Michael Monahan | |||
Executive Vice President and Chief Financial Officer |
Intangible Assets and Goodwill 2 (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
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Finite lived intangible assets future amortization expense | |
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year | $ 28,120 |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 36,919 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 32,383 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 24,071 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 11,409 |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | 20,538 |
Finite lived intangible assets, net | $ 153,440 |
Fair Value Measurements and Derivative Instruments (Details) (USD $)
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Document Period End Date | Mar. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||
Derivative Asset, Fair Value, Net | $ 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Assets, Fair Value Disclosure | 655,014,000 | 328,361,000 | 0 | 983,375,000 | 532,425,000 | 37,554,000 | 0 | 569,979,000 | 0 | 27,198,000 | 0 | 27,198,000 | 0 | 29,378,000 | 0 | 29,378,000 | 122,589,000 | 24,640,000 | 0 | 147,229,000 | 0 | 43,468,000 | 0 | 43,468,000 | 0 | 160,489,000 | 0 | 160,489,000 | 0 | 3,980,000 | 0 | 3,980,000 | 0 | 1,654,000 | 0 | 1,654,000 | |||||||||
Liabilities, Fair Value Disclosure | 0 | (3,288,000) | 0 | (3,288,000) | 0 | (3,288,000) | 0 | (3,288,000) | |||||||||||||||||||||||||||||||||||||
Money market funds / commercial paper | 581,648,000 | 34,369,000 | 0 | 616,017,000 | |||||||||||||||||||||||||||||||||||||||||
Equity securities | 0 | 25,106,000 | 0 | 25,106,000 | |||||||||||||||||||||||||||||||||||||||||
Commingled fixed income securities | 0 | 29,359,000 | 0 | 29,359,000 | |||||||||||||||||||||||||||||||||||||||||
Debt securities - U.S. and foreign governments, agencies and municipalities | 124,221,000 | 18,908,000 | 0 | 143,129,000 | |||||||||||||||||||||||||||||||||||||||||
Debt securities - corporate | 0 | 43,926,000 | 0 | 43,926,000 | |||||||||||||||||||||||||||||||||||||||||
Mortgage-back / asset-back securities | 0 | 162,375,000 | 0 | 162,375,000 | |||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | 0 | 10,117,000 | 0 | 10,117,000 | |||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | 0 | 2,582,000 | 0 | 2,582,000 | |||||||||||||||||||||||||||||||||||||||||
Total assets | 705,869,000 | 326,742,000 | 0 | 1,032,611,000 | |||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | 0 | (1,174,000) | 0 | (1,174,000) | |||||||||||||||||||||||||||||||||||||||||
Total liabilities | 0 | (1,174,000) | 0 | (1,174,000) | |||||||||||||||||||||||||||||||||||||||||
Long-term debt | $ (4,032,634,000) | $ (4,017,375,000) | $ (4,229,484,000) | $ (4,200,970,000) |
Earnings per Share (Tables)
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Mar. 31, 2013
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Earnings Per Share (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share [Table Text Block] |
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Finance Assets (Tables)
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Mar. 31, 2013
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Receivables | Finance receivables at March 31, 2013 and December 31, 2012 consisted of the following:
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Allowance For Credit Losses On Financing Receivables | Activity in the allowance for credit losses for finance receivables for the three months ended March 31, 2013 was as follows:
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Past Due Financing Receivables | The aging of gross finance receivables at March 31, 2013 and December 31, 2012 was as follows:
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Financing Receivable Credit Quality Indicators |
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Schedule Of Components Of Leveraged Lease Investments | Our investment in leveraged lease assets at March 31, 2013 and December 31, 2012 consisted of the following:
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Noncontrolling Interests (Preferred Stockholders' Equity in Subsidiaries) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Mar. 31, 2013
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Jun. 30, 2012
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Dec. 31, 2012
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Noncontrolling Interest [Line Items] | |||
Preferred Stock, Value, Issued | $ 4 | $ 4 | |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 25.00% | ||
Noncontrolling Interest, Ownership Percentage by Parent | 75.00% | ||
Preferred Stock, Dividend Rate, Percentage | 4.00% | 4.00% | |
Document Period End Date | Mar. 31, 2013 | ||
Redeemable Preferred Stock Member
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Noncontrolling Interest [Line Items] | |||
Shares, Outstanding | 300,000 | ||
Preferred Stock, Value, Issued | $ 300,000 | ||
Preferred Stock, Dividend Rate, Percentage | 6.125% | ||
Preferred stock-perpetual voting, dividend increase percentage each interval once shares become callable | 50.00% |
Finance Assets Finance Assets 2 (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2013
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Mar. 31, 2012
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Dec. 31, 2012
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Leveraged Leases [Line Items] | |||
Rental receivables | $ 78,287 | $ 83,254 | |
Unguaranteed residual values | 13,841 | 14,177 | |
Principal and interest on non-recourse loans | (50,802) | (55,092) | |
Unearned income | (7,090) | (7,793) | |
Investment in leveraged leases | 34,236 | 34,546 | |
Less: Deferred taxes related to leveraged leases | (18,234) | (19,372) | |
Net investment in leveraged leases | 16,002 | 15,174 | |
Gain on sale of leveraged lease assets, net of tax | $ 0 | $ 12,886 |
Discontinued Operations (Details) (USD $)
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3 Months Ended | |
---|---|---|
Mar. 31, 2013
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Mar. 31, 2012
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | $ (1,604,000) | |
Disposal Group, Including Discontinued Operation, Revenue | 20,068,000 | 35,520,000 |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | (2,062,000) | 17,728,000 |
Tax benefits recognized from discontinued operations | $ 19,000,000 |
Inventories
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories at March 31, 2013 and December 31, 2012 consisted of the following:
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