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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):
October 30, 1998
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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
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<PAGE>
Item 2 -- Acquisition or Disposition of Assets
On October 30, 1998, the Company's wholly owned subsidiary, Colonial Pacific
Leasing Corporation ("CPLC"), transferred the operations, employees and
substantially all assets related to its broker-oriented external financing
business to General Electric Capital Corporation ("GECC"). The Company received
approximately $790 million at closing, which approximates the book value of net
assets sold or otherwise disposed of, together with related transaction costs.
The transaction is subject to post-closing adjustments pursuant to the terms of
the purchase agreement with GECC executed on October 12, 1998. Proceeds from the
sale will be used in general operations and to pay down debt.
Item 7 -- Financial Statements and Exhibits
b. Pro Forma Financial Information
The unaudited pro forma consolidated financial information presented herein
gives effect to the Company's sale of CPLC on October 30, 1998. The Company's
unaudited pro forma consolidated financial information should be read in
conjunction with the historical financial statements in PBCC's Form 10-K for the
year ended December 31, 1997. The unaudited pro forma consolidated statements of
income for the periods ended September 30, 1998 and 1997 are incorporated by
reference to the registrant's September 30, 1998 Form 10-Q. The accompanying
unaudited pro forma consolidated statements of income for the years ended
December 31, 1997, 1996 and 1995, reflect the historic consolidated statements
of income for the same periods, with the operating results of CPLC excluded to
arrive at pro forma consolidated statements of income. The accompanying
September 30, 1998 unaudited pro forma consolidated condensed balance sheet
reflects the consolidated balance sheet as presented in the registrant's
September 30, 1998 Form 10-Q adjusted to reflect the transaction as if it had
occurred at September 30, 1998.
<PAGE>
PITNEY BOWES CREDIT CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(in thousands of dollars)
<TABLE>
Year Ended December 31, 1997
-----------------------------------------------
Adjustments Unaudited
As Reported (a) Pro Forma
Revenue:
<S> <C> <C> <C>
Finance income............................................... $ 705,364 ($ 180,451) $ 524,913
Mortgage servicing revenue................................... 73,246 - 73,246
------- ------- -------
Total revenue.............................................. 778,610 (180,451) 598,159
------- ------- -------
Expenses:
Selling, general and administrative.......................... 183,292 (67,249) 116,043
Interest..................................................... 197,234 (46,201) 151,033
Depreciation and amortization................................ 42,648 (186) 42,462
Provision for credit losses.................................. 78,320 (39,244) 39,076
------- ------- -------
Total expenses............................................. 501,494 (152,880) 348,614
------- ------- -------
Income before income taxes..................................... 277,116 (27,571) 249,545
Provision for income taxes..................................... 82,283 (10,546) 71,737
------- ------- -------
Income from continuing operations.............................. $ 194,833 ($ 17,025) $ 177,808
======= ======= =======
</TABLE>
(a) Adjustments represent results of operations from CPLC.
<PAGE>
PITNEY BOWES CREDIT CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(in thousands of dollars)
<TABLE>
Year Ended December 31, 1996
-----------------------------------------------
Adjustments Unaudited
As Reported (a) Pro Forma
Revenue:
<S> <C> <C> <C>
Finance income............................................... $ 693,013 ($ 163,029) $ 529,984
Mortgage servicing revenue................................... 52,985 - 52,985
Equipment sales.............................................. 26,666 - 26,666
------- ------- -------
Total revenue.............................................. 772,664 (163,029) 609,635
------- ------- -------
Expenses:
Selling, general and administrative.......................... 175,235 (64,022) 111,213
Interest..................................................... 201,543 (40,701) 160,842
Depreciation and amortization................................ 40,447 (180) 40,267
Provision for credit losses.................................. 66,529 (30,913) 35,616
Cost of equipment sales...................................... 22,821 - 22,821
------- ------- -------
Total expenses............................................. 506,575 (135,816) 370,759
------- ------- -------
Income before income taxes..................................... 266,089 (27,213) 238,876
Provision for income taxes..................................... 86,855 (10,409) 76,446
------- ------- -------
Income from continuing operations.............................. $ 179,234 ($ 16,804) $ 162,430
======= ======= =======
</TABLE>
(a) Adjustments represent results of operations from CPLC.
<PAGE>
PITNEY BOWES CREDIT CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(in thousands of dollars)
<TABLE>
Year Ended December 31, 1995
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Adjustments Unaudited
As Reported (a) Pro Forma
Revenue:
<S> <C> <C> <C>
Finance income............................................... $ 635,892 ($ 128,479) $ 507,413
Mortgage servicing revenue................................... 37,122 - 37,122
Equipment sales.............................................. 2,687 - 2,687
------- ------- -------
Total revenue.............................................. 675,701 (128,479) 547,222
------- ------- -------
Expenses:
Selling, general and administrative.......................... 149,483 (52,288) 97,194
Interest..................................................... 202,090 (29,674) 172,417
Depreciation and amortization................................ 32,031 (169) 31,862
Provision for credit losses.................................. 58,549 (24,888) 33,661
Cost of equipment sales...................................... 2,214 - 2,214
------- ------- -------
Total expenses............................................. 444,367 (107,019) 337,348
------- ------- -------
Income before income taxes..................................... 231,334 (21,460) 209,874
Provision for income taxes..................................... 72,678 (7,209) 65,469
------- ------- -------
Income from continuing operations.............................. $ 158,656 ($ 14,251) $ 144,405
======= ======= =======
</TABLE>
(a) Adjustments represent results of operations from CPLC.
<PAGE>
PITNEY BOWES CREDIT CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands of dollars)
<TABLE>
September 30, 1998
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Adjustments Unaudited
As Reported (a) Pro Forma
ASSETS
<S> <C> <C> <C>
Cash................................................................. $ 56,098 $ 790,126 $ 846,224
Investments:
Finance assets..................................................... 2,594,005 - 2,594,005
Investment in leveraged leases..................................... 755,161 - 755,161
Investment in operating leases, net of accumulated depreciation.... 31,582 - 31,582
Allowance for credit losses........................................ (75,301) - (75,301)
--------- --------- ---------
Net investments.................................................. 3,305,447 - 3,305,447
--------- --------- ---------
Mortgage servicing rights, net of accumulated amortization........... 366,657 - 366,657
Assets held for sale................................................. 397,976 - 397,976
Investment in partnership............................................ 204,935 - 204,935
Loans and advances to affiliates..................................... 319,310 - 319,310
Net assets of discontinued operations................................ 776,941 (776,941) -
Other assets......................................................... 252,275 - 252,275
--------- --------- ---------
Total assets.................................................. $ 5,679,639 $ 13,185 $ 5,692,824
========= ========= =========
LIABILITIES
Senior notes payable within one year................................. $ 1,837,384$ - $ 1,837,384
Short-term notes payable to affiliates............................... 96,500 - 96,500
Accounts payable to affiliates....................................... 191,145 - 191,145
Accounts payable and accrued liabilities............................. 198,351 13,185 211,536
Deferred taxes....................................................... 505,512 - 505,512
Senior notes payable after one year.................................. 1,382,000 - 1,382,000
Subordinated notes payable........................................... 285,886 - 285,886
--------- --------- ---------
Total liabilities............................................... 4,496,778 13,185 4,509,963
--------- --------- ---------
STOCKHOLDER'S EQUITY
Common stock......................................................... 46,000 - 46,000
Capital surplus...................................................... 41,725 - 41,725
Retained earnings.................................................... 1,095,136 - 1,095,136
--------- --------- ---------
Total stockholder's equity...................................... 1,182,861 - 1,182,861
--------- --------- ---------
Total liabilities and stockholder's equity.................... $ 5,679,639 $ 13,185 $ 5,692,824
========= ========= =========
</TABLE>
(a) Adjustments represent the disposal of substantially all of CPLC's assets
and the related estimated transaction costs. The proceeds are subject to
post-closing adjustments pursuant to the terms of the purchase agreement
with GECC executed on October 12, 1998.
<PAGE>
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/ NANCY E. COOPER
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Nancy E. Cooper
Vice President, Finance and
Chief Financial Officer
(Principal Financial and Accounting Officer)
Dated: November 16, 1998
