SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
F O R M 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, 1994
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: 0-13497
PITNEY BOWES CREDIT CORPORATION
State of Incorporation IRS Employer Identification No.
Delaware 06-0946476
201 Merritt Seven
Norwalk, Connecticut 06856-5151
Telephone Number: (203) 846-5600
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
----- -----
As of April 30, 1994, 460 shares of common stock, no par value with
a stated value of $100,000 per share, were outstanding, all of
which were owned by Pitney Bowes Inc., the parent of the
Registrant.
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION
H(1) (a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM
WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 2 of 16
Pitney Bowes Credit Corporation
Index
-------------------------------
Page Number
-----------
Part I - Financial Information:
Consolidated Statement of Income - Three Months
Ended March 31, 1994 and 1993 . . . . . . . . . . . 3
Consolidated Balance Sheet - March 31, 1994 and
December 31, 1993 . . . . . . . . . . . . . . . . . 4
Consolidated Statement of Cash Flows -
Three Months Ended March 31, 1994 and 1993 . . . . 5 - 6
Notes to Consolidated Financial Statements . . . . 7 - 9
Management's Narrative Analysis of the
Results of Operations . . . . . . . . . . . . . . . 10 - 13
Part II - Other Information:
Item 6. Exhibits and Reports on Form 8-K . . . . . 14
Signatures . . . . . . . . . . . . . . . . . . . . . . 15
Exhibit (i) - Computation of Ratio of Earnings
to Fixed Charges . . . . . . . . . . . . . . . . . 16
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 3 of 16
Part I - Financial Information
Pitney Bowes Credit Corporation
Consolidated Statement of Income
(Unaudited)
--------------------------------
(Dollars in thousands) Three Months Ended March 31,
----------------------------
1994 1993
------- -------
Revenue:
Finance income . . . . . . . . . . . . $129,993 $125,041
ITC amortization . . . . . . . . . . . 193 428
------- -------
Total revenue. . . . . . . . . . . . 130,186 125,469
------- -------
Expenses:
Selling, general and administrative. . 26,365 25,224
Depreciation and amortization. . . . . 5,863 3,576
Provision for credit losses. . . . . . 14,097 13,964
Interest . . . . . . . . . . . . . . . 33,324 36,510
------- -------
Total expenses . . . . . . . . . . . 79,649 79,274
------- -------
Income before income taxes . . . . . . . 50,537 46,195
Provision for income taxes . . . . . . . 16,912 15,638
------- -------
Income before effect of a change in
accounting for postemployment
benefits . . . . . . . . . . . . . . . 33,625 30,557
Effect of a change in accounting for
postemployment benefits . . . . . . . (2,820) -
------- -------
Net income . . . . . . . . . . . . . . . $ 30,805 $ 30,557
======= =======
Ratio of earnings to fixed charges . . . 2.50X 2.25X
======= =======
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 4 of 16
Pitney Bowes Credit Corporation
Consolidated Balance Sheet
(Unaudited)
-------------------------------
(Dollars in thousands) March 31, December 31,
------------ ------------
1994 1993
------------ ------------
Assets
- - ------
Cash . . . . . . . . . . . . . . . . . . . . . . $ 10,105 $ 6,237
---------- ----------
Investments:
Finance assets (Note 2) . . . . . . . . . . . 3,404,314 3,410,522
Investment in leveraged leases . . . . . . . . 301,837 298,914
Assets transferred from affiliate. . . . . . . 22,859 82,274
Investment in operating leases, net of
depreciation . . . . . . . . . . . . . . . . 62,895 63,899
Allowance for credit losses. . . . . . . . . . (99,221) (98,311)
---------- ----------
Net investments. . . . . . . . . . . . . . . 3,692,684 3,757,298
---------- ----------
Other assets . . . . . . . . . . . . . . . . . . 168,526 167,927
---------- ----------
Total assets . . . . . . . . . . . . . . . . $ 3,871,315 $ 3,931,462
========== ==========
Liabilities
- - -----------
Senior notes payable within one year (Note 3). . $ 1,591,790 $ 1,735,607
Short-term notes payable to affiliate. . . . . . 6,543 -
Accounts payable to affiliates . . . . . . . . . 132,180 162,914
Accounts payable . . . . . . . . . . . . . . . . 18,905 41,958
Accrued interest payable . . . . . . . . . . . . 18,366 23,472
Other accrued liabilities . . . . . . . . . . . 122,859 117,823
Deferred taxes . . . . . . . . . . . . . . . . . 305,468 294,494
Senior notes payable after one year (Note 3) . . 875,000 775,295
Subordinated notes payable (Note 3) . . . . . . 108,834 108,834
---------- ----------
Total liabilities. . . . . . . . . . . . . . 3,179,945 3,260,397
---------- ----------
Stockholder's Equity
- - --------------------
Common stock . . . . . . . . . . . . . . . . . . 46,000 46,000
Capital surplus. . . . . . . . . . . . . . . . . 41,725 41,725
Retained earnings. . . . . . . . . . . . . . . . 603,645 583,340
---------- ----------
Total stockholder's equity . . . . . . . . . 691,370 671,065
---------- ----------
Total liabilities and
stockholder's equity . . . . . . . . . . . . $ 3,871,315 $ 3,931,462
========== ==========
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 5 of 16
Pitney Bowes Credit Corporation
Consolidated Statement of Cash Flows
(Unaudited)
-------------------------------------
(Dollars in thousands) Three Months Ended March 31,
----------------------------
1994 1993
----------- ------------
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . $ 30,805 $ 30,557
Effect of a change in accounting for
postemployment benefits. . . . . . . . . . . 2,820 -
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for credit losses . . . . . . . . 14,097 13,964
Depreciation and amortization . . . . . . . 5,863 3,576
Decrease in accounts payable to
affiliates . . . . . . . . . . . . . . . . (30,734) (16,571)
Increase in deferred taxes. . . . . . . . . 12,854 16,425
(Decrease) increase in accounts payable and
accrued liabilities . . . . . . . . . . . (27,823) 2,331
Decrease in investment tax credits
deferred . . . . . . . . . . . . . . . . . (193) (428)
Other, net. . . . . . . . . . . . . . . . . (20,174) (8,715)
--------- ---------
Net cash (used in) provided by operating
activities. . . . . . . . . . . . . . . . . (12,485) 41,139
--------- ---------
Cash flows from investing activities:
Investment in finance assets . . . . . . . (213,098) (177,758)
Investment in operating leases. . . . . . . - (598)
Cash receipts collected under financing
contracts, net of finance income
recognized . . . . . . . . . . . . . . . . 290,170 214,185
Investment in mortgage servicing rights . . (684) -
Loans and advances to affiliated companies,
net. . . . . . . . . . . . . . . . . . . . (10,840) (16,972)
Additions to equipment and leasehold
improvements . . . . . . . . . . . . . . . (1,126) (266)
--------- ---------
Net cash provided by investing activities . 64,422 18,591
--------- ---------
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 6 of 16
Pitney Bowes Credit Corporation
Consolidated Statement of Cash Flows
(Unaudited)
------------------------------------
(Dollars in thousands) Three Months Ended March 31,
----------------------------
1994 1993
---------- ----------
Cash flows from financing activities:
(Decrease) increase in short-term debt. . . (243,537) 139,084
Proceeds from the issuance of long-term
debt . . . . . . . . . . . . . . . . . . . 200,000 -
Proceeds from issuance of short-term notes
payable to affiliate . . . . . . . . . . . 6,543 -
Payments to settle long-term debt . . . . . (575) (76,158)
Payments to settle short-term loans from
Pitney Bowes Inc. . . . . . . . . . . . . - (31,025)
Capital contribution from Pitney Bowes
Inc. . . . . . . . . . . . . . . . . . . . - 2,442
Payments to settle note payable to
affiliate. . . . . . . . . . . . . . . . . - (78,187)
Dividends paid to Pitney Bowes Inc. . . . . (10,500) (9,000)
--------- ---------
Net cash used in financing activities. . . (48,069) (52,844)
--------- ---------
Increase in cash. . . . . . . . . . . . . . . 3,868 6,886
Cash at beginning of period . . . . . . . . . 6,237 4,855
--------- ---------
Cash at end of period . . . . . . . . . . . . $ 10,105 $ 11,741
========= =========
Interest paid . . . . . . . . . . . . . . . . $ 39,467 $ 44,433
========= =========
Income taxes paid (refunded) . . . . . . . . $ 7,206 $ (10,736)
========= =========
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 7 of 16
Pitney Bowes Credit Corporation
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 the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of Pitney Bowes
Credit Corporation (the Company or PBCC), all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position
as of March 31, 1994 and the results of operations and cash flows for the
three months ended March 31, 1994 and 1993 have been included. Operating
results for the three months ended March 31, 1994 are not necessarily
indicative of the results that may be expected for the year ending December
31, 1994. These statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1993.
Note 2:
- - ------
The composition of the Company's finance assets is as follows:
(Dollars in thousands)
March 31, December 31,
------------- ------------
Finance Assets 1994 1993
------------- ------------
Gross finance receivables . . . . . . . . . . $ 4,049,778 $ 4,086,739
Unguaranteed residual valuation . . . . . . . 502,758 497,080
Initial direct cost deferred. . . . . . . . . 69,040 67,802
Unearned income . . . . . . . . . . . . . . . (1,216,446) (1,240,090)
Investment tax credits deferred . . . . . . . (816) (1,009)
---------- ----------
Total finance assets. . . . . . . . . . . . $ 3,404,314 $ 3,410,522
========== ==========
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 8 of 16
Note 3:
- - ------
The composition of the Company's notes payable is as follows:
(Dollars in thousands)
March 31, December 31,
------------- ------------
Senior Notes Payable 1994 1993
------------- ------------
Commercial paper at a weighted average
interest rate of 3.44% (3.27% in 1993). . . $1,356,087 $1,574,999
Notes payable against bank lines of
credit and others at a weighted average
interest rate of 2.44% (2.13% in 1993). . . 135,062 159,687
Current installment of long-term debt
due within one year at interest rates of
10.50% to 10.65% . . . . . . . . . . . . . 100,641 921
--------- ---------
Total senior notes payable within one year. . 1,591,790 1,735,607
Senior notes payable after one year at
interest rates of 5.625% to 10.65%
through 2009. . . . . . . . . . . . . . . . 875,000 775,295
--------- ---------
Total senior notes payable. . . . . . . . . . $2,466,790 $2,510,902
========= =========
At March 31, 1994, the Company had outstanding short-term loans from an
affiliate totaling $6.5 million at a weighted average interest rate of 3.55
percent.
In March 1994, the Company issued $200 million of 5.625 percent notes due in
February 1997. In April 1994, the Company redeemed $100 million of 10.65
percent notes due in April 1999. The Company had previously sold an option
on a notional principal amount of $100 million to enable a counterparty to
require the Company to pay a fixed rate of 10.67 percent for five years
starting April 1, 1994. The counterparty has exercised that option.
March 31, December 31,
------------- ------------
Subordinated Notes Payable 1994 1993
------------- ------------
Non-interest bearing notes due
Pitney Bowes Inc. . . . . . . . . . . . . . $ 108,094 $ 108,094
12.75% note due in 1994 . . . . . . . . . . . 740 740
--------- ---------
Total subordinated notes payable. . . . . . . $ 108,834 $ 108,834
========= =========
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 9 of 16
Note 4:
- - ------
In March 1994, the Company adopted Statement of Financial Accounting
Standards No. 112 "Employers' Accounting for Postemployment Benefits" (FAS
112). FAS 112 required a change from the cash basis of accounting to the
accrual basis of accounting for postemployment benefit costs such as the
continuation of health care, life insurance and other disability- and death-
related benefits to former or inactive employees, their beneficiaries and
covered dependents.
The transition effect of adopting FAS 112 on the immediate recognition basis
has been retroactively reflected as of January 1, 1994, as a one-time, non-
cash after-tax charge of $2.8 million (net of approximately $1.9 million of
income taxes). Application of this new standard resulted in an immaterial
amount of additional 1994 first quarter expenses.
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 10 of 16
Management's Narrative Analysis of the Results of Operations
------------------------------------------------------------
Results of Operations - first quarter of 1994 compared to first quarter of
1993
- - ---------------------------------------------------------------------------
Income for the first quarter of 1994 before the one-time effect of the
required adoption of a change in accounting was $33.6 million compared to
$30.6 million for the same period of 1993, an increase of 10.0 percent. The
current year period reflects the impact of adopting Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits" (FAS 112) as of January 1, 1994. FAS 112 requires that
postemployment benefit costs be recognized on the accrual basis of accounting
for fiscal years beginning after December 15, 1993. Postemployment benefits
include the continuation of health care, life insurance and other disability-
and death-related benefits to former or inactive employees, their
beneficiaries and covered dependents. The one-time effect of adopting FAS
112 was a non-cash, after-tax charge of $2.8 million.
Finance income in the first quarter of 1994 increased 4.0 percent to $130.0
million. Finance income for Internal small-ticket financing programs
increased 6.5 percent to $65.5 million primarily due to higher earning asset
levels, which were up 12.5 percent at the end of the first quarter of 1994,
partly offset by lower lease rates on new business. Finance income for
External large-ticket financing programs decreased 2.1 percent to $38.1
million reflecting the Company's strategy to control growth in large-ticket,
longer-term finance assets, together with lower lease rates on new business.
Finance income related to External small-ticket financing programs increased
2.5 percent to $21.8 million primarily due to higher earning asset levels in
1994 partly offset by lower lease rates on new business. Revenue generated
from mortgage servicing increased to $4.6 million in the first quarter of
1994 compared with $3.3 million in the first quarter of 1993, due to a larger
mortgage servicing portfolio.
Selling, general and administrative (SG&A) expenses were $26.4 million in
the first quarter of 1994 compared with $25.2 million in 1993. SG&A expenses
for Internal small-ticket financing programs increased 2.1 percent to $14.0
million primarily due to a higher level of marketing fees paid to Pitney
Bowes Inc. on higher new business volume. SG&A expenses for External large-
ticket financing programs decreased 12.3 percent to $3.3 million primarily
due to lower personnel related costs and lower net amortization of deferred
initial direct costs. SG&A expenses for External small-ticket financing
programs increased 13.2 percent to $6.9 million principally due to a higher
level of marketing fees paid to brokers on higher levels of new business.
SG&A expenses related to mortgage servicing were $2.2 million in the first
quarter of 1994 compared to $1.7 million in the first quarter of 1993 due to
higher operating costs associated with the larger mortgage servicing
portfolio.
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 11 of 16
Depreciation on operating leases was $2.6 million in 1994 compared to $2.4
million in 1993 reflecting a higher operating lease investment balance in
1994. Amortization of purchased mortgage servicing rights was $2.3 million
for the first quarter of 1994 compared to $1.2 million in the first quarter
of 1993 due to the larger mortgage servicing portfolio. Amortization of
deferred costs, associated with the Company's participation in a partnership
transaction completed in the fourth quarter of 1993, totalled $1.0 million.
The provision for credit losses for the first quarter of 1994 was $14.1
million compared to $14.0 million in the first quarter of 1993. The
provision for Internal small-ticket financing programs increased 8.8 percent
to $8.2 million primarily due to higher earning asset levels. The provision
for External large-ticket financing programs was $1.1 million and even with
prior year. The provision for External small-ticket financing programs was
$4.8 million for the first quarter of 1994 compared with $5.3 million for the
same period in 1993.
The Company's allowance for credit losses as a percentage of net lease
receivables (net investments before allowance for credit losses and deferred
investment tax credits plus the uncollected principal balance of receivables
sold) was 2.48 percent at March 31, 1994 and 2.44 percent at December 31,
1993.
Interest expense was $33.3 million in the first quarter of 1994 compared with
$36.5 million in 1993. The decrease primarily reflects the Company's lower
cost of funds in 1994. The effective interest rate on average borrowings was
5.45 percent for the first quarter of 1994 compared to 5.86 percent for the
same period of 1993. This favorable comparison is not expected to continue
throughout the remainder of 1994 due to the increasing short-term interest
rate environment. The Company does not match fund its financing investments
and does not apply different interest rates to its various financing
portfolios.
Excluding ITC amortization, the effective tax rate for the first quarter of
1994 was 33.6 percent compared with 34.2 percent for the same period of 1993.
The decrease is principally due to a higher level of tax-exempt income,
partly offset by a higher Federal income tax rate in 1994.
The Company's ratio of earnings to fixed charges was 2.50 times for the first
quarter of 1994 compared with 2.25 times for the same period of 1993. The
increase reflects a lower effective interest rate in 1994.
Liquidity and Capital Resources
- - -------------------------------
The Company's principal sources of funds are from operations and borrowings.
It is PBCC's practice to use a balanced mix of maturities, variable- and
fixed-rate debt and interest rate swaps to control its sensitivity to
interest rate volatility. PBCC's swap adjusted debt mix was 54 percent
short-term and 46 percent long-term at March 31, 1994 and 58 percent short-
term and 42 percent long-term at December 31, 1993. The Company may borrow
through the sale of commercial paper, under its confirmed bank lines of
credit, and by private and public offerings of intermediate- or long-term
debt securities.
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 12 of 16
In March 1994, the Company issued $200 million of 5.625 percent notes due in
February 1997. In April 1994, the Company redeemed $100 million of 10.65
percent notes due in April 1999. The Company had previously sold an option
on a notional principal amount of $100 million to enable a counterparty to
require the Company to pay a fixed rate of 10.67 percent for five years
starting April 1, 1994. The counterparty has exercised that option.
The Company has $400 million available from a $500 million shelf registration
statement filed with the Securities and Exchange Commission in October 1992.
This should meet the Company's long-term financing needs for the next two
years. The Company also had unused lines of credit and revolving credit
facilities totaling $1.525 billion at March 31, 1994, largely supporting
commercial paper borrowings. Additional financing will be arranged as deemed
necessary. Borrowing requirements will be primarily dependent upon the level
of equipment purchases from Pitney Bowes Inc. and its subsidiaries, the level
of external financing activity and the refinancing of maturing debt.
In January 1994, the Company sold approximately $88 million of assets in a
privately-placed transaction with a third-party investor. These assets,
representing finance receivables and other assets, were previously
transferred in December 1992 from the Company's German affiliate, Adrema
Leasing Corporation. Proceeds from the sale of these assets were used to
repay a portion of the Company's commercial paper borrowings. This
transaction had no material effect on the Company's results.
Gross finance assets at the end of the first quarter of 1994 decreased .7
percent from December 31, 1993. The decrease is principally due to a lower
level of new financing volume in the External large-ticket financing programs
and the impact of lower lease rates on new business. The Company continues
to develop strategies in support of ongoing debt level management. Emphasis
on fee-based transactions and consideration of the sale of certain financing
transactions are expected to continue to slow growth in finance assets and
debt levels. Gross finance assets at March 31, 1994 were 5.8 percent, or
$248.3 million, higher than March 31, 1993. Overall levels of lease
receivables are in line with management's expectations.
As previously reported, the Company has made senior secured loans and
commitments in connection with acquisition, leveraged buyout and
recapitalization financings. At March 31, 1994, the Company had a total of
$2.5 million of such senior secured loans and commitments outstanding
compared to $13.9 million at December 31, 1993. In March 1994, the Company
sold $11.3 million of its senior secured loan and commitment with a company
that had previously filed under Chapter 11 of the Federal Bankruptcy Code and
recovered 100 percent of its carrying value. The Company has not
participated in unsecured or subordinated debt financing in any highly
leveraged transactions.
The Company's liquidity ratio (finance contracts receivable, including
residuals, expected to be realized in cash over the next 12 months to current
maturities of debt over the same period) was .72 times at March 31, 1994 and
.66 times at December 31, 1993.
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 13 of 16
The Company will continue to use cash to invest in finance assets with
emphasis on Internal and External small-ticket leasing transactions and
controlled investment in External large-ticket financing programs. The
Company believes that cash generated from operations and collections on
existing lease contracts will provide the majority of cash needed for such
investment activities. Additional cash, to the extent needed, is expected to
be provided from commercial paper and intermediate- or long-term debt
securities. While the Company expects that market acceptance of its short-
and long-term debt will continue to be strong, additional liquidity is
available, if needed, under revolving credit facilities and credit lines.
Pitney Bowes Inc. and the Company are continuing an inquiry and evaluation of
the conduct by former management personnel of the German leasing business.
The results of this inquiry to date indicate that former management caused
the German leasing operation to enter into transactions which were not
consistent with Company policy and guidelines and, in certain cases, lacked
appropriate documentation and collateral. Additionally, in certain
instances, Pitney Bowes Inc. and the Company are continuing to locate,
repossess and remarket collateral where possible. At the current time, the
Company believes that sufficient reserves for expected losses are in place.
As the inquiry continues, the Company may determine that additional loss
provisions are necessary. If such additional provisions are required, it is
anticipated that resulting charges against income would be offset by gains on
asset sales. Pitney Bowes Inc. and the Company expect to complete their
inquiry by the end of the second quarter of 1994.
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 14 of 16
Part II - Other Information
---------------------------
Item 6. Exhibits and Reports on Form 8-K
(a) 1. Financial Statements - see index on page 2
2. Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
Reg. S-K Incorporation
Exhibits Description by Reference
-------- ---------------------------- -------------
(12) Computation of Ratio of See Exhibit (i)
Earnings to Fixed Charges on page 16
There are no unregistered debt instruments in which the
total amount of securities authorized thereunder exceeds
10 percent of the total assets of the Company. Copies
of all instruments defining the rights of securities
holders are available upon request.
(b) No reports on Form 8-K were filed for the three months
ended March 31, 1994.
<PAGE>
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 15 of 16
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
Date: May 13, 1994 /s/ G. Kirk Hudson
-------------------- -----------------------------
G. Kirk Hudson
Vice President - Finance
(Principal Financial Officer)
/s/ Thomas P. Santora
------------------------------
Thomas P. Santora
Controller
(Principal Accounting Officer)
Pitney Bowes Credit Corporation - Form 10-Q
Three Months Ended March 31, 1994
Page 16 of 16
Exhibit (i)
Computation of Ratio of Earnings to Fixed Charges
-------------------------------------------------
(Dollars in thousands)
Three Months Ended
March 31,
--------------------
1994 1993
------- -------
Income before income taxes . . . . . . $ 50,537 $ 46,195
------- -------
Fixed charges:
Interest on debt . . . . . . . . . . 33,324 36,510
1/3 rental expense . . . . . . . . . 347 405
------- -------
Total fixed charges . . . . . . . . . 33,671 36,915
------- -------
Total . . . . . . . . . . . . . . . . $ 84,208 $ 83,110
======= =======
Ratio of earnings to fixed
charges (1) . . . . . . . . . . . . 2.50X 2.25X
======= =======
(1) The ratio of earnings to fixed charges has been computed by
dividing income before income taxes and fixed charges by fixed
charges. Fixed charges consist of interest on debt and one-
third rental expense as representative of the interest portion
of rentals.
