Pitney Bowes Announces Full Year 2014 and Fourth Quarter Financial Results

The Company's financial results are reported in accordance with generally accepted accounting principles (GAAP). The Company uses measures such as adjusted earnings per share, adjusted income from continuing operations and free cash flow to exclude the impact of special items like restructuring charges, tax adjustments, and goodwill and asset write-downs, because, while these are actual Company expenses, they can mask underlying trends associated with its business. Such items are often inconsistent in amount and frequency and as such, the adjustments allow an investor greater insight into the current underlying operating trends of the business.

The use of free cash flow provides investors insight into the amount of cash that management could have available for other discretionary uses. It adjusts GAAP cash from operations for capital expenditures, as well as special items like cash used for restructuring charges, unusual tax settlements or payments and contributions to its pension funds. Management uses segment EBIT to measure profitability and performance at the segment level. EBIT is determined by deducting from revenue the related costs and expenses attributable to the segment. Segment EBIT excludes interest, taxes, general corporate expenses not allocated to a particular business segment, restructuring charges and goodwill and asset impairments, which are recognized on a consolidated basis. In addition, revenue growth is presented on a constant currency basis to exclude the impact of changes in foreign currency exchange rates since the prior period under comparison. Constant currency measures are intended to help investors better understand the underlying operational performance of the business excluding the impacts of shifts in currency exchange rates over the period.

Pitney Bowes has provided a quantitative reconciliation to GAAP in supplemental schedules. This information may also be found at the Company's web site www.pb.com/investorrelations.

This document contains “forward-looking statements” about the Company’s expected or potential future business and financial performance. Forward-looking statements include, but are not limited to, statements about its future revenue and earnings guidance and other statements about future events or conditions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to: mail volumes; the uncertain economic environment; timely development, market acceptance and regulatory approvals, if needed, of new products; fluctuations in customer demand; changes in postal regulations; interrupted use of key information systems; management of outsourcing arrangements; the implementation of a new enterprise resource planning system; changes in business portfolio; foreign currency exchange rates; changes in our credit ratings; management of credit risk; changes in interest rates; the financial health of national posts; and other factors beyond its control as more fully outlined in the Company's 2013 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission. Pitney Bowes assumes no obligation to update any forward-looking statements contained in this document as a result of new information, events or developments.

Note: Consolidated statements of income; revenue and EBIT by business segment; and reconciliation of GAAP to non-GAAP measures for the three months and twelve months ended December 31, 2014 and 2013, and consolidated balance sheets at December 31, 2014 and 2013 are attached.

 

Pitney Bowes Inc.

Consolidated Statements of Income

(Unaudited)

 
(Dollars in thousands, except share and per share data)      

Three months ended December 31,

Twelve months ended December 31,
  2014     2013     2014     2013  
Revenue:
Equipment sales $ 212,339 $ 248,558 $ 770,371 $ 867,593
Supplies 71,691 72,545 300,040 285,730
Software 116,852 113,006 429,743 398,664
Rentals 119,560 128,057 484,629 512,493
Financing 107,330 111,167 432,859 448,906
Support services 154,372 164,257 625,135 646,657
Business services   201,769     173,231     778,727     631,292  
 
Total revenue   983,913     1,010,821     3,821,504     3,791,335  
 
Costs and expenses:
Cost of equipment sales 103,388 127,013 365,724 422,580
Cost of supplies 23,546 22,829 93,675 89,365
Cost of software 30,337 30,560 123,760 110,653
Cost of rentals 23,065 24,389 97,338 100,335
Financing interest expense 18,829 20,281 78,562 77,719
Cost of support services 88,800 99,747 377,003 400,038
Cost of business services 138,257 126,962 544,729 449,932
Selling, general and administrative 346,903 362,220 1,378,400 1,420,096
Research and development 29,030 29,061 109,931 110,412
Restructuring charges & asset impairments 61,894 30,404 84,560 84,344
Other interest expense 24,290 25,146 95,291 114,740
Interest income (1,106 ) (965 ) (4,403 ) (5,472 )
Other expense, net   -     7,518     45,738     32,639  
 
Total costs and expenses   887,233     905,165     3,390,308     3,407,381  
 
Income from continuing operations before income taxes 96,680 105,656 431,196 383,954
 
Provision for income taxes   33,134     25,922     112,815     77,967  
 
Income from continuing operations 63,546 79,734 318,381 305,987
 

Income (loss) from discontinued operations, net of tax

  3,576     14,948     33,749     (144,777 )
 
Net income before attribution of noncontrolling interests 67,122 94,682 352,130 161,210
 
Less: Preferred stock dividends of subsidiaries attributable
to noncontrolling interests   4,594     4,593     18,375     18,375  
 
Net income - Pitney Bowes Inc. $ 62,528   $ 90,089   $ 333,755   $ 142,835  
 
 
Amounts attributable to common stockholders:
Income from continuing operations $ 58,952 $ 75,141 $ 300,006 $ 287,612
Income (loss) from discontinued operations   3,576     14,948     33,749     (144,777 )
 
Net income - Pitney Bowes Inc. $ 62,528   $ 90,089   $ 333,755   $ 142,835  
 
Basic earnings per share attributable to common stockholders (1) :
Continuing operations 0.29 0.37 1.49 1.43
Discontinued operations   0.02     0.07     0.17     (0.72 )
 
Net income - Pitney Bowes Inc. $ 0.31   $ 0.45   $ 1.65   $ 0.71  
 
Diluted earnings per share attributable to common stockholders (1) :
Continuing operations 0.29 0.37 1.47 1.42
Discontinued operations   0.02     0.07     0.17     (0.71 )
 
Net income - Pitney Bowes Inc. $ 0.31   $ 0.44   $ 1.64   $ 0.70  
 
Weighted-average shares used in diluted EPS   203,110,509     203,581,724     203,961,446     202,956,738  
 

(1)

The sum of the earnings per share amounts may not equal the totals above due to rounding.
 

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