UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
- ---
For the quarterly period ended March 31, 1998
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission File Number: 1-3579
PITNEY BOWES INC.
State of Incorporation IRS Employer Identification No.
Delaware 06-0495050
World Headquarters
Stamford, Connecticut 06926-0700
Telephone Number: (203) 356-5000
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No_____
Number of shares of common stock, $1 par value, outstanding as of April 30, 1998
is 273,568,575.
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 2
Pitney Bowes Inc.
Index
-----------------
Page Number
-----------
Part I - Financial Information
Item 1: Financial Statements
Consolidated Statements of Income - Three Months
Ended March 31, 1998 and 1997........................... 3
Consolidated Balance Sheets - March 31, 1998
and December 31, 1997................................... 4
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1998 and 1997.............. 5
Notes to Consolidated Financial Statements................. 6 - 8
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations............... 9 - 14
Part II - Other Information
Item 1: Legal Proceedings.................................... 15
Item 5: Other Information.................................... 15
Item 6: Exhibits and Reports on Form 8-K..................... 16
Signatures....................................................... 17
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 3
Part I - Financial Information
Item 1. Financial Statements
Pitney Bowes Inc.
Consolidated Statements of Income
(Unaudited)
---------------------------------
(Dollars in thousands, except per share data)
Three Months Ended March 31,
----------------------------
1998 1997
------------ ------------
Revenue from:
Sales.................................... $ 450,425 $ 417,822
Rentals and financing.................... 438,160 424,562
Support services......................... 122,989 118,986
------------ ------------
Total revenue.......................... 1,011,574 961,370
------------ ------------
Costs and expenses:
Cost of sales............................ 275,000 253,808
Cost of rentals and financing............ 138,379 127,674
Selling, service and administrative...... 330,982 326,109
Research and development................. 23,631 20,648
Interest, net............................ 45,585 49,496
------------ ------------
Total costs and expenses............... 813,577 777,735
------------ ------------
Income before income taxes................. 197,997 183,635
Provision for income taxes................. 68,310 63,690
------------ ------------
Net income................................. $ 129,687 $ 119,945
============ ============
Basic earnings per share .................. $ .46 $ .41
============ ============
Diluted earnings per share ................ $ .46 $ .40
============ ============
Dividends declared per share of
common stock............................. $ .225 $ .20
============ ============
Ratio of earnings to fixed charges......... 4.13 3.77
============ ============
Ratio of earnings to fixed
charges excluding minority interest...... 4.41 3.92
============ ============
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 4
Pitney Bowes Inc.
Consolidated Balance Sheets
---------------------------
(Dollars in thousands, except share data) March 31, December 31,
1998 1997
------------ ------------
Assets (unaudited)
- ------
Current assets:
Cash and cash equivalents..................... $ 117,200 $ 137,073
Short-term investments, at cost which
approximates market......................... 34,597 1,722
Accounts receivable, less allowances:
3/98, $21,962; 12/97, $21,129............... 347,263 348,792
Finance receivables, less allowances:
3/98, $57,519; 12/97, $54,170............... 1,726,328 1,546,542
Inventories (Note 2).......................... 241,553 249,207
Other current assets and prepayments.......... 209,618 180,179
------------ ------------
Total current assets........................ 2,676,559 2,463,515
Property, plant and equipment, net (Note 3)..... 495,189 497,261
Rental equipment and related
inventories, net (Note 3)..................... 799,377 788,035
Property leased under capital
leases, net (Note 3).......................... 4,219 4,396
Long-term finance receivables, less allowances:
3/98, $74,540; 12/97, $78,138................. 2,473,189 2,581,349
Investment in leveraged leases.................. 758,932 727,783
Goodwill, net of amortization:
3/98, $42,522; 12/97, $40,912................. 204,058 203,419
Other assets.................................... 902,075 627,631
------------ ------------
Total assets.................................... $ 8,313,598 $ 7,893,389
============ ============
Liabilities and stockholders' equity
- ------------------------------------
Current liabilities:
Accounts payable and
accrued liabilities......................... $ 937,532 $ 878,759
Income taxes payable.......................... 169,777 147,921
Notes payable and current portion of
long-term obligations....................... 1,718,449 1,982,988
Advance billings.............................. 377,343 363,565
------------ ------------
Total current liabilities................... 3,203,101 3,373,233
Deferred taxes on income........................ 937,507 905,768
Long-term debt (Note 4)......................... 1,626,870 1,068,395
Other noncurrent liabilities.................... 368,906 373,416
------------ ------------
Total liabilities........................... 6,136,384 5,720,812
Preferred stockholders' equity in a
subsidiary company............................ 300,000 300,000
Stockholders' equity:
Cumulative preferred stock, $50 par
value, 4% convertible....................... 34 39
Cumulative preference stock, no par
value, $2.12 convertible.................... 2,159 2,220
Common stock, $1 par value.................... 323,338 323,338
Capital in excess of par value................ 25,120 28,028
Retained earnings............................. 2,811,675 2,744,929
Accumulated other comprehensive income........ (73,387) (63,348)
Treasury stock, at cost....................... (1,211,725) (1,162,629)
------------ ------------
Total stockholders' equity.................. 1,877,214 1,872,577
------------ ------------
Total liabilities and stockholders' equity...... $ 8,313,598 $ 7,893,389
============ ============
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 5
Pitney Bowes Inc.
Consolidated Statements of Cash Flows
(Unaudited)
-------------------------------------
(Dollars in thousands) Three Months Ended March 31,
----------------------------
1998 1997*
----------- -----------
Cash flows from operating activities:
Net income....................................... $ 129,687 $ 119,945
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization................ 79,916 73,905
Increase in deferred taxes on income......... 32,864 80,599
Change in assets and liabilities:
Accounts receivable........................ (671) 12,222
Sales-type lease receivables............... (21,602) (23,640)
Inventories................................ 6,641 15,447
Other current assets and prepayments....... (30,534) (12,243)
Accounts payable and accrued liabilities... 64,824 3,844
Income taxes payable....................... 21,743 (29,099)
Advance billings........................... 15,590 12,549
Other, net................................... (26,330) (14,063)
----------- -----------
Net cash provided by operating activities.. 272,128 239,466
----------- -----------
Cash flows from investing activities:
Short-term investments........................... (33,314) (10,836)
Net investment in fixed assets................... (79,074) (60,251)
Net investment in finance receivables............ (162,512) 5,400
Investment in leveraged leases................... (34,151) (8,219)
Investment in mortgage servicing rights.......... (159,607) (39,850)
Other investing activities....................... 378 7,320
----------- -----------
Net cash used in investing activities...... (468,280) (106,436)
----------- -----------
Cash flows from financing activities:
(Decrease) increase in notes payable, net........ (258,098) 280,101
Proceeds from issuance of long-term
obligations.................................... 554,123 -
Principal payments on long-term obligations...... (4,205) (204,507)
Proceeds from issuance of stock.................. 5,546 5,004
Stock repurchases................................ (56,452) (145,507)
Dividends paid................................... (62,941) (59,184)
----------- -----------
Net cash provided by (used in) financing
activities............................... 177,973 (124,093)
----------- -----------
Effect of exchange rate changes on cash............ (1,694) (1,490)
----------- -----------
(Decrease) increase in cash and cash equivalents... (19,873) 7,447
Cash and cash equivalents at beginning of period... 137,073 135,271
----------- -----------
Cash and cash equivalents at end of period......... $ 117,200 $ 142,718
=========== ===========
Interest paid...................................... $ 34,869 $ 49,766
=========== ===========
Income taxes paid, net............................. $ 14,922 $ 15,609
=========== ===========
<FN>
* Certain prior year amounts have been reclassified to conform with the 1998
presentation.
</FN>
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 6
Pitney Bowes Inc.
Notes to Consolidated Financial Statements
Note 1:
- -------
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of Pitney Bowes Inc. ("the
company"), all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the financial position of the company as of March
31, 1998 and the results of its operations and cash flows for the three months
ended March 31, 1998 and 1997 have been included. Operating results for the
three months ended March 31, 1998 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1998. These statements
should be read in conjunction with the financial statements and notes thereto
included in the company's 1997 Annual Report to Stockholders on Form 10-K.
Note 2:
- -------
Inventories are comprised of the following:
(Dollars in thousands) March 31, December 31,
1998 1997
---------- ------------
Raw materials and work in process................... $ 51,928 $ 51,429
Supplies and service parts.......................... 92,259 93,064
Finished products................................... 97,366 104,714
---------- ------------
Total............................................... $ 241,553 $ 249,207
========== ============
Note 3:
- -------
Fixed assets are comprised of the following:
(Dollars in thousands) March 31, December 31,
1998 1997
---------- ------------
Property, plant and equipment....................... $1,132,145 $ 1,120,325
Accumulated depreciation............................ (636,956) (623,064)
---------- ------------
Property, plant and equipment, net.................. $ 495,189 $ 497,261
========== ============
Rental equipment and related inventories............ $1,647,779 $ 1,577,370
Accumulated depreciation............................ (848,402) (789,335)
---------- ------------
Rental equipment and related inventories, net....... $ 799,377 $ 788,035
========== ============
Property leased under capital leases................ $ 19,281 $ 20,507
Accumulated amortization............................ (15,062) (16,111)
---------- ------------
Property leased under capital leases, net........... $ 4,219 $ 4,396
========== ============
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 7
Note 4:
- -------
As part of the company's non-financial services shelf registrations, a
medium-term note facility exists permitting issuance of up to $100 million in
debt securities with maturities ranging from more than one year to 30 years of
which $32 million remained available at March 31, 1998. On April 29, 1998, the
company filed a non-financial services shelf registration with the Securities
and Exchange Commission (SEC), which combined with the $32 million that remained
available at March 31, 1998, will permit issuance of up to $500 million in debt
securities.
On January 22, 1998, the company issued notes amounting to $300 million
remaining under a non-financial services shelf registration filed with the SEC.
These unsecured notes bear annual interest at 5.95% and mature in February 2005.
The net proceeds from these notes are being used for general corporate purposes,
including the repayment of short-term debt.
On January 16, 1998, Pitney Bowes Credit Corporation (PBCC), a wholly-owned
subsidiary of the company issued notes amounting to $250 million remaining under
a shelf registration filed with the SEC. These unsecured notes bear annual
interest at 5.65% and mature in January 2003. The proceeds from these notes are
being used for PBCC's financing needs during 1998.
Note 5:
- -------
A reconciliation of the basic and diluted earnings per share computations for
the three months ended March 31, 1998 and 1997 is as follows (in thousands,
except per share data):
1998 1997
------------------------------------- ----------------------------------------
Per Per
Income Shares Share Income Shares Share
- ------------------------------------------------------------------- ----------------------------------------
Net income $129,687 $ 119,945
Less:
Preferred stock
dividends - -
Preference stock
dividends (42) (46)
- ------------------------------------------------------------------- ----------------------------------------
Basic earnings per
share $129,645 279,408 $ .46 $ 119,899 294,630 $ .41
- ------------------------------------------------------------------- ----------------------------------------
Effect of dilutive
securities:
Preferred stock - 17 - 22
Preference stock 42 1,292 46 1,389
Stock options 2,718 1,662
Employee stock
purchase plan shares 436 270
- ------------------------------------------------------------------- ----------------------------------------
Diluted earnings per
share $129,687 283,871 $ .46 $ 119,945 297,973 $ .40
=================================================================== ========================================
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 8
Note 6:
- -------
Revenue and operating profit by business segment for the three months ended
March 31, 1998 and 1997 were as follows:
(Dollars in thousands) 1998 1997
----------- ---------
Revenue
Business equipment.................... $ 784,664 $ 745,120
Business services..................... 156,070 128,990
Commercial and industrial financing
Large-ticket external........ 33,748 49,551
Small-ticket external........ 37,092 37,709
----------- ---------
70,840 87,260
----------- ---------
Total revenue.................................. $ 1,011,574 $ 961,370
=========== =========
Operating Profit (1)
Business equipment.................... $ 189,869 $ 169,411
Business services..................... 13,923 10,488
Commercial and industrial financing... 12,803 16,511
----------- ---------
Total operating profit......................... $ 216,595 $ 196,410
=========== =========
<FN>
(1) Operating profit excludes general corporate expenses, income taxes, and
net interest other than that related to finance operations.
</FN>
Note 7:
- -------
Comprehensive income for the three months ended March 31, 1998 and 1997 was as
follows:
(Dollars in thousands)
1998 1997
-------- --------
Net income................................... $129,687 $119,945
Other comprehensive income:
Foreign currency translation adjustments.... (10,039) (22,791)
-------- --------
Comprehensive income......................... $119,648 $ 97,154
======== ========
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
-------------------------------------------------
Results of Operations - first quarter of 1998 vs. first quarter of 1997
- -----------------------------------------------------------------------
Revenue increased five percent in the first quarter of 1998 to $1,011.6 million
compared with $961.4 million in the first quarter of 1997. Net income increased
eight percent to $129.7 million from $119.9 million for the same period in 1997.
Diluted earnings per share grew to 46 cents, a 13.4 percent increase from the
first quarter of 1997. Revenue growth was eight percent excluding revenue from
the Commercial and Industrial Financing segment. The decrease in Commercial and
Industrial Financing revenue resulted from the planned reductions in the
external lease financing portfolio.
First quarter 1998 revenue included $450.4 million from sales, up eight percent
from $417.8 million in the first quarter of 1997; $438.2 million from rentals
and financing, up three percent from $424.6 million; and $123.0 million from
support services, up three percent from $119.0 million.
In the Business Equipment segment, which includes Mailing and Office Systems
operations, revenue grew five percent and operating profit increased 12 percent
during the first quarter.
Mailing Systems' revenue grew four percent during the quarter; however,
excluding the impact of foreign currency exchange rates primarily in Canada,
Germany, Australia and Japan, revenue would have increased five percent. This
growth was driven by strong placements of mailing equipment such as the Personal
Post Office (TM), as the company continued to help customers make a successful
transition to advanced electronic and digital metering, and introduced new
customers to the benefits of metering. At March 31, 1998, electronic and digital
meters grew to 78 percent of the company's installed U.S. meter base compared
with 63 percent at March 31, 1997.
Consolidated rental revenue growth has increased for the fifth consecutive
quarter on a year-over-year comparison to seven percent in the first quarter of
1998.
Office Systems' revenue grew 10 percent on continued demand for the company's
advanced facsimile and copier systems. This performance was paced by
double-digit sales growth in both product lines, and the highest ever quarterly
order level in the Facsimile business.
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 10
In the Business Services segment, first quarter revenue grew 21 percent and
operating profit grew 33 percent. The segment includes Pitney Bowes Management
Services and Atlantic Mortgage and Investment Corporation. The segment's revenue
growth was driven by continued expansion of the customer base within the
segment, as well as broadening the service offerings to existing customers.
Operating profit benefited from leveraging the existing infrastructure as well
as ongoing programs to enhance customer service and competitiveness.
Revenue and operating profit in the Commercial and Industrial Financing segment
were down 19 percent and 22 percent, respectively. The segment includes Pitney
Bowes Capital Services and Colonial Pacific Leasing Corporation. The strategic
reduction of earning assets at Pitney Bowes Capital Services during 1997
resulted in the anticipated revenue and operating profit declines compared with
the first quarter of 1997. These reductions are part of the company's ongoing
strategy to reduce the level of capital committed to asset financing while
maintaining the ability to provide a full range of financial services to
customers.
Cost of sales increased to 61.1% of sales revenue in the first quarter of 1998
compared with 60.7% in 1997. This was due primarily to greater revenue
contribution from the facilities management business which includes most of its
expenses in cost of sales. The increased cost of sales rate was partially offset
by lower product costs at U.S. Mailing Systems and increased sales of high
margin supplies at Office Systems.
Cost of rentals and financing increased to 31.6% of related revenues in the
first quarter of 1998 compared with 30.1% in 1997. This was due mainly to
reduced revenues from the Commercial and Industrial Financing segment, the
impact of increased revenues from the relatively lower-margin mortgage servicing
business, a service based business with a higher cost to revenue ratio, and
higher depreciation expense and other costs from increased placements of digital
and electronic meters.
Selling, service and administrative expenses were 32.7% of revenue in the first
quarter of 1998 compared with 33.9% in 1997. This improvement was due primarily
to the company's continued emphasis on controlling operating expenses.
Research and development expenses increased 14 percent to $23.6 million in the
first quarter of 1998 compared with $20.6 million in 1997. The increase reflects
the company's continued commitment to developing new technologies for its
digital meters and other mailing and software products.
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 11
Net interest expense decreased to $45.6 million in the first quarter of 1998
from $49.5 million in the first quarter of 1997. The decrease is due mainly to
lower average borrowings in 1998 compared with 1997 resulting from the
transaction with GATX Capital Corporation during 1997, and lower interest rates.
The effective tax rate for the first quarter of 1998 was 34.5 percent compared
with 34.7 percent in the first quarter of 1997.
Net income and diluted earnings per share increased eight percent and 13.4
percent, respectively, in the first quarter of 1998 due to the factors discussed
above. The reason for the increase in diluted earnings per share outpacing the
increase in net income was the company's share repurchase program.
Liquidity and Capital Resources
- -------------------------------
The ratio of current assets to current liabilities improved to .84 to 1 at March
31, 1998 compared with .73 to 1 at December 31, 1997. The improvement was due
primarily to an increase in short-term finance assets held for sale and from the
repayment of short-term debt.
As part of the company's non-financial services shelf registrations, a
medium-term note facility exists permitting issuance of up to $100 million in
debt securities with maturities ranging from more than one year to 30 years of
which $32 million remained available at March 31, 1998. On April 29, 1998, the
company filed a non-financial services shelf registration with the Securities
and Exchange Commission (SEC), which combined with the $32 million that remained
available at March 31, 1998, will permit issuance of up to $500 million in debt
securities.
On January 22, 1998, the company issued notes amounting to $300 million
remaining under a non-financial services shelf registration filed with the SEC.
These unsecured notes bear annual interest at 5.95% and mature in February 2005.
The net proceeds from these notes are being used for general corporate purposes,
including the repayment of short-term debt.
On January 16, 1998, Pitney Bowes Credit Corporation (PBCC), a wholly-owned
subsidiary of the company issued notes amounting to $250 million remaining under
a shelf registration filed with the SEC. These unsecured notes bear annual
interest at 5.65% and mature in January 2003. The proceeds from these notes are
being used for PBCC's financing needs during 1998. PBCC intends to file a new
shelf registration statement with the SEC during 1998.
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 12
The company believes that its financing needs for the next few years can be met
with cash generated internally, money from existing credit agreements, debt
issued under new shelf registration statements and existing commercial and
medium-term note programs.
The ratio of total debt to total debt and stockholders' equity including the
preferred stockholders' equity in a subsidiary company in total debt was 66.1
percent at March 31, 1998 compared with 64.2 percent at December 31, 1997. Book
value per common share increased to $6.72 at March 31, 1998 from $6.69 at
December 31, 1997 driven primarily by the repurchase of common shares. During
the quarter ended March 31, 1998, the company repurchased approximately
1,172,000 common shares for $56.5 million.
To control the impact of interest rate swings on our business, the company uses
a balanced mix of debt maturities, variable and fixed rate debt and interest
rate swap agreements. The company enters into interest rate swap agreements,
primarily through its financial services business. Swap agreements are used to
fix interest rates on commercial paper and/or obtain a lower interest cost on
debt than we would otherwise have been able to get without the swap.
Capital Investments
- -------------------
In the first quarter of 1998, net investments in fixed assets included $22.3
million in net additions to property, plant and equipment and $56.8 million in
net additions to rental equipment and related inventories compared with $22.6
million and $37.7 million, respectively, in the same period in 1997. In the case
of rental equipment, the additions included the production of postage meters and
the purchase of facsimile and copier equipment for both new placements and
upgrade programs.
As of March 31, 1998, commitments for the acquisition of property, plant and
equipment reflected plant and manufacturing equipment improvements as well as
rental equipment for new and replacement programs.
Regulatory Matters
- ------------------
In May 1996, the United States Postal Service (USPS) issued a proposed Schedule
for the phaseout of mechanical meters in the United States. In accordance with
the schedule, the company voluntarily halted new placements of mechanical meters
in the U.S. as of June 1, 1996. As a result of the company's aggressive efforts
to meet the USPS mechanical meter migration schedule combined with the company's
ongoing and continuing investment in advanced postage evidencing technologies,
at
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 13
March 31, 1998, electronic and digital meters represented approximately 78
percent of the company's U.S. installed base, up from 75 percent at December 31,
1997 and 63 percent at March 31, 1997. Based on the announced USPS mechanical
meter migration schedule, the company believes that the phaseout of mechanical
meters will not cause a material adverse financial impact on the company.
In May 1995, the USPS publicly announced its concept of its Information Based
Indicia Program (IBIP), the purpose of which was to develop a new standard for
future digital postage evidencing devices. In July 1996, the USPS published for
public comment draft specifications for the Indicium, Postal Security Device and
Host specifications. The company submitted extensive comments to these
specifications in November 1996. Revised specifications were then published in
1997 which incorporated many of the changes recommended by the company in its
prior comments. The company submitted comments to these revised specifications.
Also, in March 1997 the USPS published for public comment the Vendor
Infrastructure specification to which the company responded on June 27, 1997. As
of March 31, 1998, the USPS had not yet finalized the four IBIP specifications;
however, the company is in the process of finalizing the development of a PC
product which satisfies the proposed IBIP specifications. This product is
currently undergoing testing by the USPS and is expected to be ready for market
upon final approval from the USPS.
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 14
Forward-looking Statements
- --------------------------
The company wants to caution readers that any forward-looking statements (those
which talk about the company's or management's current expectations as to the
future) in this Form 10-Q or made by the company management involve risks and
uncertainties which may change based on various important factors. Some of the
factors which could cause future financial performance to differ materially from
the expectations as expressed in any forward-looking statement made by or on
behalf of the company include:
-changes in postal regulations
-timely development and acceptance of new products
-success in gaining product approval in new markets where regulatory
approval is required
-successful entry into new markets
-mailers' utilization of alternative means of communication or competitors'
products
-the company's success at managing customer credit risk
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 15
Part II - Other Information
---------------------------
Item 1: Legal Proceedings
In the course of normal business, the company is occasionally party to lawsuits.
These may involve litigation by or against the company relating to, among other
things:
-contractual rights under vendor, insurance or other contracts
-intellectual property or patent rights
-equipment, service or payment disputes with customers
-disputes with employees
The company is currently a defendant in a number of lawsuits, none of which
should have, in the opinion of management and legal counsel, a material adverse
effect on the company's financial position or results of operations.
Item 5: Other Information
On February 9, 1998, the Pitney Bowes 1991 Stock Plan was amended to provide
that: (i) all employees are eligible to participate in the Plan; (ii) no stock
option granted under the Plan may have an exercise price of less than 100% of
fair market value on the date of grant; (iii) shares issuable under the Plan in
the form of restricted stock are limited to 30% of total shares authorized under
the Plan; (iv) awards of restricted stock must bear a restriction of a minimum
of three years if a tenure requirement is the sole restriction for earning the
award, but if performance goals must be met to earn the award, the restriction
period must be for a minimum of one year; (v) the committee administering the
Plan may not waive any conditions or rights of awards, amend terms or otherwise
alter any award without the consent of the holder of the award; and (vi) the
term of the Plan is extended to May 31, 2006. The Plan is set forth in its
entirety as Exhibit 10.
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 16
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
Reg. S-K
Exhibits Description
-------- -----------
(10) The Pitney Bowes Amended and
Restated 1991 Stock Plan
(12) Computation of ratio of
earnings to fixed charges
(27) Financial Data Schedule
(b) Reports on Form 8-K
On February 23, 1998, the company filed a Form 8-K relating to the
issuance of $300 million aggregate principal amount of 5.95% Notes due
2005.
On February 4, 1998, PBCC filed a Form 8-K relating to the issuance of
$250 million aggregate principal amount of 5.65% Notes due 2003.
Pitney Bowes Inc. - Form 10-Q
Three Months Ended March 31, 1998
Page 17
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PITNEY BOWES INC.
May 14, 1998
/s/ M. L. Reichenstein
----------------------
M. L. Reichenstein
Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/ A. F. Henock
----------------
A. F. Henock
Vice President - Controller
and Chief Tax Counsel
(Principal Accounting Officer)
Exhibit Index
-------------
Reg. S-K
Exhibit Description
-------- -----------
(10) The Pitney Bowes Amended and
Restated 1991 Stock Plan
(12) Computation of ratio of
earnings to fixed charges
(27) Financial Data Schedule