Delaware | 1-3579 | 06-0495050 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
3001 Summer Street Stamford, Connecticut | 06926 |
(Address of principal executive offices) | (Zip Code) |
Item 9.01. | Financial Statements and Exhibits |
99.1 |
99.2 |
Pitney Bowes Inc. | |
By: | /s/ Joseph R. Catapano |
Name: | Joseph R. Catapano |
Title: | Vice President, Chief Accounting Officer (Principal Accounting Officer) |
Historical | Discontinued Operations | Continuing Operations | Pro Forma Adjustments | Pro Forma | |||||||||||||||
ASSETS | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 719,875 | $ | — | $ | 719,875 | $ | (41,564 | ) | (a) | $ | 678,311 | |||||||
Short-term investments | 55,603 | — | 55,603 | — | 55,603 | ||||||||||||||
Accounts receivable, net | 488,028 | 93,274 | 394,754 | — | 394,754 | ||||||||||||||
Short-term finance receivables, net | 792,802 | — | 792,802 | — | 792,802 | ||||||||||||||
Inventories | 96,224 | 50,742 | 45,482 | — | 45,482 | ||||||||||||||
Current income taxes | 42,274 | — | 42,274 | — | 42,274 | ||||||||||||||
Other current assets and prepayments | 94,227 | 5,560 | 88,667 | — | 88,667 | ||||||||||||||
Total current assets | 2,289,033 | 149,576 | 2,139,457 | (41,564 | ) | 2,097,893 | |||||||||||||
Property, plant and equipment, net | 386,977 | 3,237 | 383,740 | — | 383,740 | ||||||||||||||
Rental property and equipment, net | 182,727 | 1,502 | 181,225 | — | 181,225 | ||||||||||||||
Long-term finance receivables, net | 640,987 | — | 640,987 | — | 640,987 | ||||||||||||||
Goodwill | 1,965,984 | 179,463 | 1,786,521 | — | 1,786,521 | ||||||||||||||
Intangible assets, net | 261,318 | — | 261,318 | — | 261,318 | ||||||||||||||
Noncurrent income taxes | 61,367 | — | 61,367 | — | 61,367 | ||||||||||||||
Other assets | 531,225 | 484 | 530,741 | — | 530,741 | ||||||||||||||
Total assets | $ | 6,319,618 | $ | 334,262 | $ | 5,985,356 | $ | (41,564 | ) | $ | 5,943,792 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Accounts payable and accrued liabilities | $ | 1,375,166 | $ | 31,863 | $ | 1,343,303 | $ | (781 | ) | (b) | $ | 1,342,522 | |||||||
Current income taxes | 9,457 | — | 9,457 | — | 9,457 | ||||||||||||||
Current portion of long-term obligations | 327,429 | — | 327,429 | (299,736 | ) | (c) | 27,693 | ||||||||||||
Advance billings | 292,174 | 49,600 | 242,574 | — | 242,574 | ||||||||||||||
Total current liabilities | 2,004,226 | 81,463 | 1,922,763 | (300,517 | ) | 1,622,246 | |||||||||||||
Deferred taxes on income | 239,472 | — | 239,472 | — | 239,472 | ||||||||||||||
Tax uncertainties and other income tax liabilities | 112,520 | — | 112,520 | — | 112,520 | ||||||||||||||
Long-term debt | 3,248,713 | — | 3,248,713 | — | 3,248,713 | ||||||||||||||
Other noncurrent liabilities | 499,794 | 5,564 | 494,230 | — | 494,230 | ||||||||||||||
Total liabilities | 6,104,725 | 87,027 | 6,017,698 | (300,517 | ) | 5,717,181 | |||||||||||||
Stockholders' equity: | |||||||||||||||||||
Cumulative preferred stock, $50 par value, 4% convertible | 1 | — | 1 | — | 1 | ||||||||||||||
Cumulative preference stock, no par value, $2.12 convertible | 422 | — | 422 | — | 422 | ||||||||||||||
Common stock, $1 par value (480,000,000 shares authorized; 323,337,912 shares issued) | 323,338 | — | 323,338 | — | 323,338 | ||||||||||||||
Additional paid-in capital | 119,647 | — | 119,647 | — | 119,647 | ||||||||||||||
Retained earnings | 5,235,874 | 247,235 | 4,988,639 | 258,953 | (d) | 5,247,592 | |||||||||||||
Accumulated other comprehensive loss | (771,995 | ) | — | (771,995 | ) | — | (771,995 | ) | |||||||||||
Treasury stock, at cost (136,194,172 shares) | (4,692,394 | ) | — | (4,692,394 | ) | — | (4,692,394 | ) | |||||||||||
Total Pitney Bowes Inc. stockholders’ equity | 214,893 | 247,235 | (32,342 | ) | 258,953 | 226,611 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 6,319,618 | $ | 334,262 | $ | 5,985,356 | $ | (41,564 | ) | $ | 5,943,792 |
Historical | Discontinued Operations | Continuing Operations | Pro Forma Adjustments | Pro Forma | |||||||||||||||
Revenue: | |||||||||||||||||||
Equipment sales | $ | 155,808 | $ | 45,437 | $ | 110,371 | $ | — | $ | 110,371 | |||||||||
Supplies | 65,374 | 5,381 | 59,993 | — | 59,993 | ||||||||||||||
Software | 81,616 | 5,322 | 76,294 | — | 76,294 | ||||||||||||||
Rentals | 95,280 | 654 | 94,626 | — | 94,626 | ||||||||||||||
Financing | 80,103 | — | 80,103 | — | 80,103 | ||||||||||||||
Support services | 118,463 | 45,440 | 73,023 | — | 73,023 | ||||||||||||||
Business services | 386,538 | — | 386,538 | — | 386,538 | ||||||||||||||
Total revenue | 983,182 | 102,234 | 880,948 | — | 880,948 | ||||||||||||||
Costs and expenses: | |||||||||||||||||||
Cost of equipment sales | 78,751 | 32,697 | 46,054 | — | 46,054 | ||||||||||||||
Cost of supplies | 21,147 | 4,200 | 16,947 | — | 16,947 | ||||||||||||||
Cost of software | 25,353 | 1,298 | 24,055 | — | 24,055 | ||||||||||||||
Cost of rentals | 24,596 | 542 | 24,054 | — | 24,054 | ||||||||||||||
Financing interest expense | 12,225 | — | 12,225 | — | 12,225 | ||||||||||||||
Cost of support services | 75,572 | 32,445 | 43,127 | — | 43,127 | ||||||||||||||
Cost of business services | 297,399 | — | 297,399 | — | 297,399 | ||||||||||||||
Selling, general and administrative | 312,108 | 16,670 | 295,438 | — | 295,438 | ||||||||||||||
Research and development | 32,784 | 2,462 | 30,322 | — | 30,322 | ||||||||||||||
Restructuring charges and asset impairments, net | 1,021 | 117 | 904 | — | 904 | ||||||||||||||
Other components of net pension and post retirement costs | (1,719 | ) | — | (1,719 | ) | — | (1,719 | ) | |||||||||||
Interest expense, net | 30,853 | — | 30,853 | (4,756 | ) | (e) | 26,097 | ||||||||||||
Total costs and expenses | 910,090 | 90,431 | 819,659 | (4,756 | ) | 814,903 | |||||||||||||
Income from continuing operations before income taxes | 73,092 | 11,803 | 61,289 | 4,756 | 66,045 | ||||||||||||||
Provision for income taxes | 19,579 | 3,316 | 16,263 | 1,071 | (f) | 17,334 | |||||||||||||
Net income from continuing operations | $ | 53,513 | $ | 8,487 | $ | 45,026 | $ | 3,685 | $ | 48,711 | |||||||||
Earnings per share attributable to common stockholders (1): | |||||||||||||||||||
Basic | $ | 0.29 | $ | 0.05 | $ | 0.24 | $ | 0.02 | $ | 0.26 | |||||||||
Diluted | $ | 0.28 | $ | 0.05 | $ | 0.24 | $ | 0.02 | $ | 0.26 | |||||||||
Weighted average number of shares outstanding: | |||||||||||||||||||
Basic | 186,863 | 186,863 | 186,863 | 186,863 | |||||||||||||||
Diluted | 188,175 | 188,175 | 188,175 | 188,175 |
Historical | Discontinued Operations | Continuing Operations | Pro Forma Adjustments | Pro Forma | |||||||||||||||
Revenue: | |||||||||||||||||||
Equipment sales | $ | 679,803 | $ | 203,112 | $ | 476,691 | $ | — | $ | 476,691 | |||||||||
Supplies | 252,824 | 21,412 | 231,412 | — | 231,412 | ||||||||||||||
Software | 352,595 | 20,752 | 331,843 | — | 331,843 | ||||||||||||||
Rentals | 386,348 | 2,225 | 384,123 | — | 384,123 | ||||||||||||||
Financing | 331,416 | 431 | 330,985 | — | 330,985 | ||||||||||||||
Support services | 478,536 | 178,744 | 299,792 | — | 299,792 | ||||||||||||||
Business services | 1,068,426 | — | 1,068,426 | — | 1,068,426 | ||||||||||||||
Total revenue | 3,549,948 | 426,676 | 3,123,272 | — | 3,123,272 | ||||||||||||||
Costs and expenses: | |||||||||||||||||||
Cost of equipment sales | 340,745 | 139,629 | 201,116 | — | 201,116 | ||||||||||||||
Cost of supplies | 82,992 | 16,690 | 66,302 | — | 66,302 | ||||||||||||||
Cost of software | 101,969 | 6,936 | 95,033 | — | 95,033 | ||||||||||||||
Cost of rentals | 84,270 | 1,567 | 82,703 | — | 82,703 | ||||||||||||||
Financing interest expense | 50,665 | — | 50,665 | — | 50,665 | ||||||||||||||
Cost of support services | 288,976 | 125,087 | 163,889 | — | 163,889 | ||||||||||||||
Cost of business services | 773,052 | — | 773,052 | — | 773,052 | ||||||||||||||
Selling, general and administrative | 1,237,739 | 61,421 | 1,176,318 | — | 1,176,318 | ||||||||||||||
Research and development | 129,767 | 11,064 | 118,703 | — | 118,703 | ||||||||||||||
Restructuring charges and asset impairments, net | 59,431 | 3,208 | 56,223 | — | 56,223 | ||||||||||||||
Interest expense, net | 113,497 | — | 113,497 | (19,026 | ) | (e) | 94,471 | ||||||||||||
Other expense, net | 3,856 | — | 3,856 | — | 3,856 | ||||||||||||||
Total costs and expenses | 3,266,959 | 365,602 | 2,901,357 | (19,026 | ) | 2,882,331 | |||||||||||||
Income from continuing operations before income taxes | 282,989 | 61,074 | 221,915 | 19,026 | 240,941 | ||||||||||||||
Provision for income taxes | 21,649 | 21,096 | 553 | 7,344 | (f) | 7,897 | |||||||||||||
Net income from continuing operations | $ | 261,340 | $ | 39,978 | $ | 221,362 | $ | 11,682 | $ | 233,044 | |||||||||
Earnings per share attributable to common stockholders (1): | |||||||||||||||||||
Basic | $ | 1.40 | $ | 0.21 | $ | 1.19 | $ | 0.06 | $ | 1.25 | |||||||||
Diluted | $ | 1.39 | $ | 0.21 | $ | 1.18 | $ | 0.06 | $ | 1.24 | |||||||||
Weighted average number of shares outstanding: | |||||||||||||||||||
Basic | 186,332 | 186,332 | 186,332 | 186,332 | |||||||||||||||
Diluted | 187,435 | 187,435 | 187,435 | 187,435 |
(a) | The pro forma impact on cash and cash equivalents is as follows: |
Net cash proceeds from the Disposition | $ | 339.4 | |
Assumed redemption of the Notes | (310.9 | ) | |
Estimated tax payment | (59.1 | ) | |
Estimated transaction and closing costs | (11.0 | ) | |
Net impact on cash and cash equivalents | $ | (41.6 | ) |
(b) | Represents the elimination of accrued interest at March 31, 2018 on the Notes. |
(c) | Represents the elimination of the carrying value of the Notes at March 31, 2018. The carrying value at March 31, 2018 is comprised of the face amount of $300 million less $0.3 million of unamortized discount. |
(d) | Represents the elimination of the historical assets and liabilities of DMT from the Registrant’s consolidated balance sheet at March 31, 2018 and the impact of the pro forma adjustments discussed in (a), (b), (e) and (f). |
(e) | Represents the reduction in interest expense due to the Registrant’s announced intention to redeem the Notes. |
(f) | Represents the blended federal and state statutory rate of 22.5% for the three months ended March 31, 2018 and 38.6% for the year ended December 31, 2017. |
Historical | Discontinued Operations | Continuing Operations | |||||||||
Revenue: | |||||||||||
Equipment sales | $ | 675,451 | $ | 195,420 | $ | 480,031 | |||||
Supplies | 262,682 | 20,732 | 241,950 | ||||||||
Software | 348,661 | 23,084 | 325,577 | ||||||||
Rentals | 412,738 | 2,497 | 410,241 | ||||||||
Financing | 366,547 | 123 | 366,424 | ||||||||
Support services | 512,820 | 183,396 | 329,424 | ||||||||
Business services | 827,676 | — | 827,676 | ||||||||
Total revenue | 3,406,575 | 425,252 | 2,981,323 | ||||||||
Costs and expenses: | |||||||||||
Cost of equipment sales | 331,942 | 128,722 | 203,220 | ||||||||
Cost of supplies | 81,420 | 15,911 | 65,509 | ||||||||
Cost of software | 105,841 | 9,690 | 96,151 | ||||||||
Cost of rentals | 76,040 | 1,583 | 74,457 | ||||||||
Financing interest expense | 55,241 | — | 55,241 | ||||||||
Cost of support services | 295,685 | 129,438 | 166,247 | ||||||||
Cost of business services | 568,509 | — | 568,509 | ||||||||
Selling, general and administrative | 1,200,327 | 54,951 | 1,145,376 | ||||||||
Research and development | 121,306 | 13,928 | 107,378 | ||||||||
Restructuring charges and asset impairments, net | 63,296 | 3,001 | 60,295 | ||||||||
Goodwill impairment | 171,092 | 22,911 | 148,181 | ||||||||
Interest expense, net | 88,970 | — | 88,970 | ||||||||
Other expense, net | 536 | 536 | — | ||||||||
Total costs and expenses | 3,160,205 | 380,671 | 2,779,534 | ||||||||
Income from continuing operations before income taxes | 246,370 | 44,581 | 201,789 | ||||||||
Provision for income taxes | 131,819 | 24,844 | 106,975 | ||||||||
Net income from continuing operations | 114,551 | 19,737 | 94,814 | ||||||||
Less: Preferred stock dividends of subsidiaries attributable to noncontrolling interests | 19,045 | — | 19,045 | ||||||||
Net income from continuing operations - Pitney Bowes Inc. | $ | 95,506 | $ | 19,737 | $ | 75,769 | |||||
Earnings per share attributable to common stockholders (1): | |||||||||||
Basic | $ | 0.51 | $ | 0.11 | $ | 0.40 | |||||
Diluted | $ | 0.51 | $ | 0.10 | $ | 0.40 | |||||
Weighted average number of shares outstanding: | |||||||||||
Basic | 187,945 | 187,945 | 187,945 | ||||||||
Diluted | 188,975 | 188,975 | 188,975 |
Historical | Discontinued Operations | Continuing Operations | |||||||||
Revenue: | |||||||||||
Equipment sales | $ | 695,159 | $ | 187,045 | $ | 508,114 | |||||
Supplies | 288,103 | 25,002 | 263,101 | ||||||||
Software | 386,506 | 25,779 | 360,727 | ||||||||
Rentals | 441,663 | 3,474 | 438,189 | ||||||||
Financing | 410,035 | — | 410,035 | ||||||||
Support services | 554,764 | 201,526 | 353,238 | ||||||||
Business services | 801,830 | — | 801,830 | ||||||||
Total revenue | 3,578,060 | 442,826 | 3,135,234 | ||||||||
Costs and expenses: | |||||||||||
Cost of equipment sales | 331,069 | 123,223 | 207,846 | ||||||||
Cost of supplies | 88,802 | 18,147 | 70,655 | ||||||||
Cost of software | 113,580 | 10,440 | 103,140 | ||||||||
Cost of rentals | 84,188 | 1,701 | 82,487 | ||||||||
Financing interest expense | 71,791 | — | 71,791 | ||||||||
Cost of support services | 322,960 | 144,314 | 178,646 | ||||||||
Cost of business services | 546,201 | — | 546,201 | ||||||||
Selling, general and administrative | 1,279,961 | 64,051 | 1,215,910 | ||||||||
Research and development | 110,156 | 17,761 | 92,395 | ||||||||
Restructuring charges and asset impairments, net | 25,782 | (130 | ) | 25,912 | |||||||
Interest expense, net | 87,583 | — | 87,583 | ||||||||
Other income, net | (94,838 | ) | — | (94,838 | ) | ||||||
Total costs and expenses | 2,967,235 | 379,507 | 2,587,728 | ||||||||
Income from continuing operations before income taxes | 610,825 | 63,319 | 547,506 | ||||||||
Provision for income taxes | 189,778 | 24,270 | 165,508 | ||||||||
Net income from continuing operations | 421,047 | 39,049 | 381,998 | ||||||||
Less: Preferred stock dividends of subsidiaries attributable to noncontrolling interests | 18,375 | — | 18,375 | ||||||||
Net income from continuing operations - Pitney Bowes Inc. | $ | 402,672 | $ | 39,049 | $ | 363,623 | |||||
Earnings per share attributable to common stockholders (1): | |||||||||||
Basic | $ | 2.01 | $ | 0.20 | $ | 1.82 | |||||
Diluted | $ | 2.00 | $ | 0.19 | $ | 1.81 | |||||
Weighted average number of shares outstanding: | |||||||||||
Basic | 199,835 | 199,835 | 199,835 | ||||||||
Diluted | 200,945 | 200,945 | 200,945 |