UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

September 12, 2016
Date of Report (Date of earliest event reported)


Pitney Bowes Inc.
(Exact name of registrant as specified in its charter)

Delaware	1-3579	06-0495050
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(I.R.S. Employer Identification No.)

3001 Summer Street
Stamford, Connecticut 06926-0700
(Address of principal executive offices)

(203) 356-5000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

ITEM 7.01. REGULATION FD DISCLOSURE

In connection with fixed-income investor telephone conferences, Pitney Bowes Inc. (the “Company”) is announcing that it intends to cause its subsidiary, Pitney Bowes International Holdings, Inc. (“PBIH”), to redeem all 300,000 outstanding shares of its perpetual voting preferred stock, having an aggregate stated value and liquidation preference of $300,000,000. These shares entitle their holders to cumulative dividends when, as and if declared by PBIH’s board of directors out of legally available funds, at an annual rate of 6.125% of the shares’ stated value through October 29, 2016 and at an annual rate of 9.1875% of the shares’ stated value from October 30, 2016 through April 29, 2017 (or, if earlier, through the business day prior to the date of redemption), subject to further increases if the shares remain outstanding after such time or a covenant default occurs. The shares become redeemable at PBIH’s option on October 30, 2016. PBIH is expected to announce the date by which it intends to redeem such shares at least 30 days in advance. The Company expects to fund the redemption with the proceeds of an issuance of dollar-denominated, intermediate maturity, registered senior unsecured notes, subject to market conditions, together with cash on hand (if applicable).

 

In addition, the Company hereby provides supplemental information regarding EBIT, EBIT margin, EBITDA, EBITDA margin, free cash flow and revenue excluding divested businesses and currency effects. A copy of this information is furnished as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.

 

In accordance with General Instruction B.2. of this Current Report on Form 8-K, the information presented herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

 

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

Exhibit Number	Description of Exhibit
99.1	Supplemental information provided on September 12, 2016.

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: September 12, 2016

Pitney Bowes Inc.     By: /s/ Debbie D. Salce Name: Debbie D. Salce Title: Vice President and Treasurer

 

Exhibit 99.1

Reconciliation of Reported Cash Flow from Operations to Free Cash Flow
($ millions)
		2012				2013				2014				2015				2016 H1 TTM
Cash Flow from Operating Activities			$660				$625				$656				$515				$469
Capital expenditures			(177	)			(138	)			(181	)			(166	)			(149	)
Restructuring payments			75				60				56				62				65
(Receipts) payments related to investment divestiture			-				-				(6	)			20				(6	)
Pension plan contribution			95				-				-				-				36
Reserve account deposits			2				(20	)			(16	)			(24	)			(10	)
Acquisition and disposition related expenses			-				-				-				10				-
Tax and other payments on sale of businesses and leveraged lease assets			114				75				-				21				21
Cash transactions fees related to acquisitions and dispositions			-				-				-				18				7
Extinguishment of debt			-				33				62				-				-
Free Cash Flow			$769				$635				$571				$456				$433

Reconciliation of reported revenue to revenue excluding divested businesses and currency
($ millions)
		2015																				2014
		SMB Solutions				Enterprise Business				Digital Commerce Solutions				Other				Total				SMB Solutions				Enterprise Business				Digital Commerce Solutions				Other				Total
Revenue, as reported		$	1,880			$	895			$	748			$	55			$	3,578			$	2,064			$	919			$	710			$	128			$	3,822
Exclude revenue from divested businesses and impact of currency			66				6				26				-				98				(41	)			(20	)			(1	)			-				(62	)
Revenue, excluding divested businesses and currency		$	1,946			$	901			$	774			$	55			$	3,676			$	2,023			$	899			$	709			$	128			$	3,760
Y/Y revenue change ex divested businesses and currency			-4	%			0	%			9	%			N/M				-2	%

Small & Medium Business Solutions - reconciliation of reported revenue to revenue excluding divested businesses and currency
($ millions)
		2013																				2014
		Q1				Q2				Q3				Q4				Total				Q1				Q2				Q3				Q4				Total
Revenue, as reported			$542				$542				$523				$551				$2,158				$534				$524				$496				$510				$2,064
Exclude revenue from divested businesses and impact of currency			(13	)			(13	)			(12	)			(16	)			(54	)			(12	)			(20	)			(8	)			7				(33	)
Revenue, excluding divested businesses and currency			$529				$529				$511				$535				$2,104				$522				$504				$488				$517				$2,031
Y/Y revenue change ex divested businesses and currency			-4.9	%			-3.3	%			-3.7	%			-2.4	%			-3.6	%			-1.1	%			-4.4	%			-4.3	%			-3.2	%			-3.2	%
		2015																				2016
		Q1				Q2				Q3				Q4				Total				Q1				Q2
Revenue, as reported			$478				$467				$458				$477				$1,880				$453				$428
Exclude revenue from divested businesses and impact of currency			17				19				16				14				66				6				2
Revenue, excluding divested businesses and currency			$495				$486				$474				$491				$1,946				$459				$430
Y/Y revenue change ex divested businesses and currency			-5.0	%			-4.3	%			-3.1	%			-2.8	%			-3.8	%			-3.0	%			-7.1	%

Small & Medium Business Solutions - EBITDA and EBITDA margin
($ millions)
		2013															2014
		Q1		Q2			Q3			Q4			Total				Q1		Q2			Q3			Q4			Total
Segment EBITDA (1)		$193			$205			$200			$225			$823			$211			$211			$198			$210			$830
Less: segment depreciation and amortization		27			27			26			31			111			26			28			22			23			99
Segment EBIT		$166			$178			$174			$194			$712			$185			$183			$176			$187			$731
Segment EBITDA margin (2)		35.6	%		37.8	%		38.2	%		40.8	%		38.1	%		39.5	%		40.3	%		39.9	%		41.2	%		40.2	%
		2015															2016
		Q1		Q2			Q3			Q4			Total				Q1		Q2
Segment EBITDA (1)		$197			$196			$191			$195			$779			$187			$175
Less: segment depreciation and amortization		22			22			21			16			81			19			20
Segment EBIT		$175			$174			$170			$179			$698			$168			$155
Segment EBITDA margin (2)		41.2	%		42.0	%		41.7	%		40.9	%		41.4	%		41.3	%		40.9	%

 

(1) EBITDA is a non-GAAP measure. See reconciliation of SMB Solutions EBITDA to total EBITDA and net income.

(2) Segment EBITDA margin is defined as Segment EBITDA divided by segment revenue, as reported.

Enterprise Business Solutions - reconciliation of reported revenue to revenue excluding divested businesses and currency
($ millions)
		2013									2014
		Production Mail			Presort			Total			Production Mail			Presort			Total
Revenue, as reported		$512			$430			$942			$462			$457			$919
Exclude revenue from divested businesses and impact of currency		(23	)		-			(23	)		(17	)		-			(17	)
Revenue, excluding divested businesses and currency		$489			$430			$919			$445			$457			$902
Y/Y revenue change ex divested businesses and currency								3.3	%								-1.7	%
		2015									2016 H1
		Production Mail			Presort			Total			Production Mail			Presort			Total
Revenue, as reported		$421			$474			$895			$183			$243			$426
Exclude revenue from divested businesses and impact of currency		6			-			6			1			-			1
Revenue, excluding divested businesses and currency		$427			$474			$901			$184			$243			$427
Y/Y revenue change ex divested businesses and currency								0.2	%								0.2	%

Enterprise Business Solutions - EBITDA and EBITDA margin
($ millions)
		2013									2014
		Production Mail			Presort			Total			Production Mail			Presort			Total
Segment EBITDA (1)		$71			$113			$184			$55			$127			$182
Less: segment depreciation and amortization		16			30			46			7			29			36
Segment EBIT		$55			$83			$138			$48			$98			$146
Segment EBITDA margin (2)								19.5	%								19.8	%
		2015									2016 H1
		Production Mail			Presort			Total			Production Mail			Presort			Total
Segment EBITDA (1)		$52			$132			$184			$22			$64			$86
Less: segment depreciation and amortization		4			27			31			2			14			16
Segment EBIT		$48			$105			$153			$20			$50			$70
Segment EBITDA margin (2)								20.6	%								20.2	%

 

(1) EBITDA is a non-GAAP measure. See reconciliation of Enterprise Business Solutions EBITDA to total EBITDA and net income.

(2) Segment EBITDA margin is defined as Segment EBITDA divided by segment revenue, as reported.

Software Solutions - reconciliation of reported revenue to revenue excluding currency and EBITDA and EBITDA margin
($ millions)
		Revenue, as reported				Unfavorable (favorable) impact on revenue due to currency				Revenue, excluding currency				Revenue, excluding currency - TTM				EBITDA (1)				EBITDA - TTM				EBITDA margin (2)
2Q12			$107				$3				$110								$13
3Q12			$96				$1				$97								$9
4Q12			$114				($1	)			$113								$25
1Q13			$88				$1				$89				$409				$11				$58				14	%
2Q13			$100				$1				$101				$400				$21				$66				17	%
3Q13			$95				$2				$97				$400				$14				$71				18	%
4Q13			$112				$1				$113				$400				$18				$64				16	%
1Q14			$91				$1				$92				$403				$5				$58				15	%
2Q14			$109				($1	)			$108				$410				$13				$50				12	%
3Q14			$112				($1	)			$111				$424				$29				$65				15	%
4Q14			$117				$2				$119				$430				$25				$72				17	%
1Q15			$86				$6				$92				$430				$9				$76				18	%
2Q15			$99				$6				$105				$427				$20				$83				20	%
3Q15			$98				$7				$105				$421				$20				$74				19	%
4Q15			$103				$5				$108				$410				$18				$67				17	%
Q116			$78				$2				$80				$398				$1				$59				16	%
Q216			$90				$2				$92				$385				$14				$53				14	%

 

(1) EBITDA is a non-GAAP measure. See reconciliation of EBITDA to net income.

(2) EBITDA margin is defined as EBITDA divided by revenue, as reported for TTM.

Global Ecommerce - reconciliation of reported revenue to revenue excluding currency
($ millions)
		2013			2014			2015			2016 H1
Revenue, as reported		$170			$282			$362			$204
Exclude impact of currency		-			-			3			1
Revenue, excluding currency		$170			$282			$365			$205
Global Ecommerce - EBITDA and EBITDA margin
		2013			2014			2015			2016 H1
Segment EBITDA (1)		$5			$25			$40			$20
Less: segment depreciation and amortization		4			8			21			16
Segment EBIT		$1			$17			$19			$4
Segment EBITDA margin (2)		2.9	%		8.9	%		11.0	%		9.8	%

 

(1) EBITDA is a non-GAAP measure. See reconciliation of EBITDA to net income.

(2) Segment EBITDA margin is defined as Segment EBITDA divided by segment revenue, as reported.

2012 - 2014 Reconciliation of Segment EBITDA to Net Income
($ millions)
		2012			2013											2014
		Total			Small & Medium Business Solutions		Enterprise Business Solutions		Digital Commerce Solutions		Other		Total			Small & Medium Business Solutions		Enterprise Business Solutions		Digital Commerce Solutions		Other		Total
Revenue, as reported		$3,824											$3,791											$3,822
Segment EBITDA		$1,132			$823		$184		$69		$10		$1,086			$830		$182		$97		$24		$1,133
Less: segment depreciation and amortization		201			111		46		20		4		181			99		36		29		5		169
Segment EBIT		931			$712		$138		$49		$6		905			$731		$146		$68		$19		964
Reconciling items:
Interest, net		(185	)										(187	)										(169	)
Unallocated corporate expenses		(216	)										(217	)										(233	)
Restructuring charges and asset impairments, net		(17	)										(84	)										(85	)
Acquisition / disposition related expenses		-											-											-
Other income (expense), net		(1	)										(33	)										(46	)
Income from continuing operations		512											384											431
Provision for income taxes		(114	)										(78	)										(113	)
Income (loss) from discontinued operations		66											(145	)										34
Net income		$464											$161											$352
Segment EBITDA margin		30	%										29	%										30	%

2015 and 2016 TTM Reconciliation of Segment EBITDA to Net Income
($ millions)
		2015														2016 TTM
		Small & Medium Business Solutions			Enterprise Business Solutions			Digital Commerce Solutions			Other		Total			Total
Revenue, as reported		$1,880			$895			$748			$55		$3,578			$3,487
Segment EBITDA		$779			$184			$107			$13		$1,083			$1,031
Less: segment depreciation and amortization		81			31			39			3		154			158
Segment EBIT		$698			$153			$68			$10		929			873
Reconciling items:
Interest, net													(159	)		(146	)
Unallocated corporate expenses													(213	)		(217	)
Restructuring charges and asset impairments, net													(26	)		(45	)
Acquisition / disposition related expenses													(15	)		(8	)
Other income (expense), net													95			2
Income from continuing operations													611			459
Provision for income taxes													(190	)		(157	)
Income (loss) from discontinued operations													5			4
Net income													$426			$306
Segment EBITDA margin		n/a			n/a			n/a			n/a		30	%		30	%
Segment EBIT margin		37	%		17	%		9	%		n/a		n/a			n/a