SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
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FORM 8-K
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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of Earliest Event Reported):
August 21, 1997
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Commission file number 0-13497
PITNEY BOWES CREDIT CORPORATION
Incorporated pursuant to the Laws of the State of Delaware
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Internal Revenue Service -- Employer Identification No. 06-0946476
27 Waterview Drive, Shelton, CT 06484-4361
(203) 922-4000
Page 2 of 5
Item 2 -- Acquisition or Disposition of Assets
On August 21, 1997 Pitney Bowes Credit Corporation ("PBCC" or "the Company")
announced that it has entered into an agreement with GATX Capital Corporation
("GATX Capital"), a subsidiary of GATX Corporation, that will reduce the
Company's external large-ticket finance portfolio by approximately $1.2 billion.
This represents approximately 50 percent of PBCC's current external large-ticket
portfolio. The agreement reflects PBCC's ongoing strategy of focusing on fee and
service based revenue rather than asset based income.
Under the terms of the agreement, the Company will transfer external
large-ticket finance assets through a direct sale to GATX Capital and an
investment in a limited liability company. PBCC expects to receive approximately
$1 billion in cash through the end of the year and a 50 percent share in the
limited liability company, in which PBCC and GATX Capital will each retain
approximately $200 million of equity.
This transaction is subject to a number of conditions to closing, which
include certain regulatory approvals. The transaction is expected to close
during the third and fourth quarter of 1997. There is no assurance however, that
it will close in a timely manner, or at all.
Item 7 -- Financial Statements and Exhibits
c. The following exhibit is furnished in accordance with Item 601 of Regulation
S-K:
Exhibit
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(99) Pitney Bowes Inc. (parent company) press release dated August 21, 1997. See Exhibit (i)
On pages 4-5
Page 3 of 5
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 CREDIT CORPORATION
By /s/ G. KIRK HUDSON
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G. Kirk Hudson
Vice President - Finance
(Principal Financial and
Accounting Officer)
Dated: August 27, 1997
Page 4 of 5
Exhibit (i)
PITNEY BOWES ENHANCES SHAREHOLDER VALUE WITH
$1.2 BILLION REDUCTION IN
LARGE-TICKET EXTERNAL FINANCE PORTFOLIO
"Latest Initiatives in Strategy to Maximize Shareholder Return Include
Authorization to Increase Original 9.2 Million Share Repurchase Program to a
Total of 12.4 Million Shares"
Stamford, Conn., August 21, 1997 -- Pitney Bowes Inc. (NYSE: PBI) today
announced the latest initiatives in its ongoing strategy to generate and deliver
enhanced shareholder value: an agreement with GATX Capital Corporation (GATX
Capital) that will significantly reduce the Pitney Bowes large-ticket external
finance portfolio by approximately $1.2 billion as a result of the same
agreement, Pitney Bowes expects to receive approximately $1 billion in up-front
cash by the end of the year, and authorization by the board of directors for the
purchase of an additional 3.2 million shares in the open market, bringing the
total repurchase authorization to 12.4 million shares
Chairman and CEO Michael J. Critelli said, "In February we entered a
new dimension in our strategy to enhance shareholder value with board
authorization to repurchase up to 9.2 million outstanding shares in the open
market, and a double-digit dividend increase for the 15th consecutive year.
Today's agreement with GATX Capital signals our latest actions to maximize the
return on our stockholders' investment in Pitney Bowes. A significant portion of
the proceeds from liquidating these assets, along with cash from operations,
will benefit shareholders through reinvestment in our core businesses and
repurchase of stock. The transaction proceeds and cash from operations will also
be used to reduce debt and help maintain above-market dividend yields. The
transaction will maximize the cash return on the assets, while also
significantly reducing our large-ticket external finance portfolio and related
debt. These selective asset reductions are also part of our ongoing Financial
Services strategy to shift the external finance revenue stream to more fee-based
income sources.
"I am also pleased to note that our board of directors has authorized
the purchase of an additional 3.2 million outstanding shares, bringing our total
1997 repurchase authorization to 12.4 million shares. Since we unveiled this
program in February we have repurchased nearly 4.7 million shares. The
combination of the significant reduction in the large-ticket external finance
portfolio and the repurchase of shares reflects our confidence in the growth and
profitability of our business and our ongoing commitment to increasing
shareholder value."
Under the terms of the agreement, Pitney Bowes' large-ticket external
finance portfolio will be reduced without recourse to Pitney Bowes by
approximately $1.2 billion through a direct asset sale to GATX Capital, and the
contribution of selected assets to a limited liability company in which Pitney
Bowes and GATX Capital would each retain approximately $200 million of equity.
Through the combination of GATX Capital's cash investment and capitalization of
the limited liability company, Pitney Bowes expects to receive approximately $1
billion in cash by the end of the year.
According to Joseph C. Lane, President and CEO of GATX Capital, "Our
relationship with Pitney Bowes demonstrates GATX Capital's continued strategy of
growth through joint ventures and evidences our success in lease portfolio
acquisitions. This significant transaction allows both GATX Capital and Pitney
Bowes to combine their complementary strengths and to focus on core business
activities, thereby maximizing both companies' shareholder value."
As part of the agreement, GATX Capital is expected to receive fees for
providing remarketing expertise to the limited liability company for selected
assets coming off lease. The Capital Services division of Pitney Bowes Financial
Services is expected to receive fees for servicing the portfolio.
Page 5 of 5
Exhibit (i) (continued)
This agreement gives Pitney Bowes customers the best of both worlds,
concluded Matthew Kissner, president of Pitney Bowes Financial Services. "Both
Pitney Bowes Financial Services and GATX Capital have strong asset management
and remarketing capabilities, and GATX Capital is particularly well known for
its expertise in financial joint venture management, financial structuring and
asset remarketing," Kissner stated. "And Pitney Bowes Financial Services is best
known for its proficiency in financial structuring and long-term customer
relationship building and management. Through this limited liability company, we
will be able to capitalize on the key strengths of both companies. Pitney Bowes'
relationship with large-ticket finance customers will remain intact. Maintaining
the relationship with the customer will enable us to continue to originate
future transactions and market investments in these assets to third-party
investors."
GATX Capital is a diversified international financial services company
with 32 locations worldwide. The company provides asset-based financing for
transportation, industrial and informational technology equipment. GATX Capital
is a subsidiary of Chicago-based GATX Corporation (NYSE:GMT) which provides
approximately $6 billion of service-enhanced assets primarily used to help its
customers transport, store or distribute their products and information.
Pitney Bowes Financial Services provides leasing and financing services
to help businesses -- ranging from small to large -- acquire Pitney Bowes and
other mission-critical equipment and services while preserving cash flow. Pitney
Bowes is a premier provider of products and services that support preparation
and management of documents, packages and other messages in physical or
electronic form.
The forward-looking statements contained in this news release involve
risks and uncertainties, and are subject to change based on various important
factors, as outlined in the company's 1996 Form 10-K Annual Report filed with
the Securities and Exchange Commission.