UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 8-K
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
PITNEY BOWES INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 1-3579
State of Incorporation IRS Employer Identification No.
Delaware 06-0495050
World Headquarters
Stamford, Connecticut 06926-0700
Telephone Number: (203) 356-5000
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Pitney Bowes Inc. - Form 8-K
Page 2
Item 2 - Acquisition or Disposition of Assets.
On October 30, 1998, Colonial Pacific Leasing Corporation (CPLC), a wholly owned
subsidiary of the company, transferred the operations, employees and
substantially all assets related to its broker-oriented external financing
business to General Electric Capital Corporation (GECC), a subsidiary of the
General Electric Company. The company received approximately $790 million at
closing, which approximates the book value of the net assets sold or otherwise
disposed of and related transaction costs. This transaction is subject to post
closing adjustments pursuant to the terms of the purchase agreement with GECC
entered into on October 12, 1998. Proceeds from the sale will be used to
reinvest in core businesses around the world, pay down consolidated debt and
repurchase shares of the company's stock.
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 the company'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 historical 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 at September 30, 1998 as
presented in the registrant's September 30, 1998 Form 10-Q adjusted to reflect
the transaction as if it occurred at September 30, 1998.
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Pitney Bowes Inc. - Form 8-K
Page 3
<TABLE>
PITNEY BOWES INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(Dollars in thousands, except share data)
<CAPTION>
Year Ended December 31, 1997
--------------------------------------------------
Adjustments
As Reported (a) Pro Forma
--------------- --------------- ---------------
<S> <C> <C> <C>
Revenue from:
Sales..................................................... $ 1,834,057 $ 1,834,057
Rentals and financing..................................... 1,782,851 $ (180,451) 1,602,400
Support services.......................................... 483,556 483,556
--------------- --------------- ---------------
Total revenue......................................... 4,100,464 (180,451) 3,920,013
--------------- --------------- ---------------
Costs and expenses:
Cost of sales............................................. 1,081,537 1,081,537
Cost of rentals and financing............................. 557,769 (106,679) 451,090
Selling, service and administrative....................... 1,367,862 1,367,862
Research and development.................................. 89,463 89,463
Interest, net............................................. 200,735 (46,201) 154,534
--------------- --------------- ---------------
Total costs and expenses............................. 3,297,366 (152,880) 3,144,486
--------------- --------------- ---------------
Income from continuing operations before income taxes....... 803,098 (27,571) 775,527
Provision for income taxes.................................. 277,071 (10,546) 266,525
--------------- --------------- ---------------
Income from continuing operations........................... $ 526,027 $ (17,025) $ 509,002
=============== =============== ===============
Basic earnings per share.................................... $ 1.82 $ (.06) $ 1.76
=============== ============== ===============
Diluted earnings per share.................................. $ 1.80 $ (.06) $ 1.74
=============== ============= ===============
Average common shares outstanding........................... 288,782,996 288,782,996
Average common and potential common shares outstanding...... 292,517,116 292,517,116
<FN>
(a) Adjustments represent results of operations from CPLC.
</FN>
</TABLE>
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Pitney Bowes Inc. - Form 8-K
Page 4
<TABLE>
PITNEY BOWES INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(Dollars in thousands, except share data)
<CAPTION>
Year Ended December 31, 1996
--------------------------------------------------
Adjustments
As Reported (a) Pro Forma
--------------- --------------- ---------------
<S> <C> <C> <C>
Revenue from:
Sales..................................................... $ 1,675,090 $ 1,675,090
Rentals and financing..................................... 1,717,738 $ (163,029) 1,554,709
Support services.......................................... 465,751 465,751
--------------- --------------- ---------------
Total revenue......................................... 3,858,579 (163,029) 3,695,550
--------------- --------------- ---------------
Costs and expenses:
Cost of sales............................................. 1,025,250 1,025,250
Cost of rentals and financing............................. 529,740 (95,115) 434,625
Selling, service and administrative....................... 1,340,276 1,340,276
Research and development.................................. 81,726 81,726
Interest, net............................................. 197,204 (40,701) 156,503
--------------- --------------- ---------------
Total costs and expenses............................. 3,174,196 (135,816) 3,038,380
--------------- --------------- ---------------
Income from continuing operations before income taxes....... 684,383 (27,213) 657,170
Provision for income taxes.................................. 214,970 (10,409) 204,561
--------------- --------------- ---------------
Income from continuing operations........................... $ 469,413 $ (16,804) $ 452,609
=============== =============== ===============
Basic earnings per share.................................... $ 1.57 $ (.06) $ 1.51
=============== ============== ===============
Diluted earnings per share.................................. $ 1.56 $ (.06) $ 1.50
=============== ============== ===============
Average common shares outstanding........................... 298,233,766 298,233,766
Average common and potential common shares outstanding...... 301,303,356 301,303,356
<FN>
(a) Adjustments represent results of operations from CPLC.
</FN>
</TABLE>
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Pitney Bowes Inc. - Form 8-K
Page 5
<TABLE>
PITNEY BOWES INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(Dollars in thousands, except share data)
<CAPTION>
Year Ended December 31, 1995
--------------------------------------------------
Adjustments
As Reported (a) Pro Forma
--------------- --------------- ---------------
<S> <C> <C> <C>
Revenue from:
Sales..................................................... $ 1,546,393 $ 1,546,393
Rentals and financing..................................... 1,575,094 $ (128,479) 1,446,615
Support services.......................................... 433,267 433,267
--------------- --------------- ---------------
Total revenue......................................... 3,554,754 (128,479) 3,426,275
--------------- --------------- ---------------
Costs and expenses:
Cost of sales............................................. 941,124 941,124
Cost of rentals and financing............................. 463,601 (77,345) 386,256
Selling, service and administrative....................... 1,230,671 1,230,671
Research and development.................................. 81,800 81,800
Interest, net............................................. 218,627 (29,674) 188,953
--------------- --------------- ---------------
Total costs and expenses............................. 2,935,823 (107,019) 2,828,804
--------------- --------------- ---------------
Income from continuing operations before income taxes....... 618,931 (21,460) 597,471
Provision for income taxes.................................. 211,222 (7,209) 204,013
--------------- --------------- ---------------
Income from continuing operations........................... $ 407,709 $ (14,251) $ 393,458
=============== =============== ===============
Basic earnings per share.................................... $ 1.35 $ (.05) $ 1.30
=============== ============== ===============
Diluted earnings per share.................................. $ 1.34 $ (.05) $ 1.29
=============== ============== ===============
Average common shares outstanding........................... 302,280,548 302,280,548
Average common and potential common shares outstanding...... 304,739,952 304,739,952
<FN>
(a) Adjustments represent results of operations from CPLC.
</FN>
</TABLE>
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Pitney Bowes Inc. - Form 8-K
Page 6
<TABLE>
PITNEY BOWES INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited)
(Dollars in thousands)
<CAPTION>
September 30, 1998
--------------------------------------------------
Adjustments
As Reported (a) Pro Forma
--------------- --------------- ---------------
<S> <C> <C> <C>
Assets
- - ------
Current assets:
Cash and cash equivalents............................. $ 144,974 $ 790,126 $ 935,100
Short-term investments............................... 1,930 1,930
Accounts receivable................................... 346,475 346,475
Finance receivables.............................. 1,435,795 1,435,795
Inventories .......................................... 235,568 235,568
Other current assets and prepayments.................. 173,458 173,458
Net assets of discontinued operations................. 776,941 (776,941) -
--------------- --------------- ---------------
Total current assets............................... 3,115,141 13,185 3,128,326
--------------- --------------- ---------------
Property, plant and equipment, net.......................... 470,110 470,110
Rental equipment and related inventories, net .............. 803,738 803,738
Property leased under capital leases, net .................. 3,909 3,909
Long-term finance receivables............................... 1,938,581 1,938,581
Investment in leveraged leases.............................. 817,144 817,144
Goodwill.................................................... 213,778 213,778
Other assets................................................ 869,944 869,944
--------------- --------------- ---------------
Total assets................................................ $ 8,232,345 $ 13,185 $ 8,245,530
=============== =============== ===============
Liabilities and stockholders' equity
- - -------------------------------------
Current liabilities:
Accounts payable and accrued liabilities.............. $ 842,511 $ 13,185 $ 855,696
Income taxes payable.................................. 165,414 165,414
Notes payable and current portion of
long-term obligations.............................. 1,844,077 1,844,077
Advance billings...................................... 362,801 362,801
--------------- --------------- ---------------
Total current liabilities.......................... 3,214,803 13,185 3,227,988
--------------- --------------- ---------------
Deferred taxes on income.................................... 929,199 929,199
Long-term debt ............................................. 1,710,533 1,710,533
Other noncurrent liabilities................................ 366,799 366,799
--------------- --------------- ---------------
Total liabilities.................................. 6,221,334 13,185 6,234,519
--------------- --------------- ---------------
Preferred stockholders' equity in a subsidiary company...... 300,000 300,000
Stockholders' equity:
Cumulative preferred stock............................ 34 34
Cumulative preference stock .......................... 2,076 2,076
Common stock.......................................... 323,338 323,338
Capital in excess of par value........................ 18,198 18,198
Retained earnings..................................... 2,971,883 2,971,883
Accumulated other comprehensive income................ (90,548) (90,548)
Treasury stock........................................ (1,513,970) (1,513,970)
--------------- --------------- ---------------
Total stockholders' equity......................... 1,711,011 - 1,711,011
--------------- --------------- ---------------
Total liabilities and stockholders' equity.................. $ 8,232,345 $ 13,185 $ 8,245,530
=============== =============== ===============
<FN>
(a) Adjustments represent the disposition of substantially all of CPLC's assets
and the related transaction costs. The proceeds are subject to post closing
adjustments pursuant to the terms of the purchase agreement with GECC
entered into on October 12, 1998.
</FN>
</TABLE>
<PAGE>
Pitney Bowes Inc. - Form 8-K
Page 7
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.
November 16, 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)
