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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the year ended December 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 1-3579
PITNEY BOWES INC.
State of Incorporation IRS Employer Identification No.
Delaware 06-0495050
World Headquarters
Stamford, Connecticut 06926-0700
Telephone Number: (203) 356-5000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock ($2 par value) New York Stock Exchange
$2.12 Convertible Cumulative New York Stock Exchange
Preference Stock (no par value)
Preference Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
4% Convertible Cumulative Preferred Stock ($50 par value)
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
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
The aggregate market value of voting stock (common stock and $2.12
preference stock) held by non-affiliates of the Registrant as of March 14,
1997 is $9,078,238,584.
Number of shares of common stock, $2 par value, outstanding as of March 14,
1997 is 147,050,608.
DOCUMENTS INCORPORATED BY REFERENCE:
1. Only the following portions of the Pitney Bowes Inc. 1996 Annual
Report to Stockholders are incorporated by reference into Parts I, II
and IV of this Form 10-K Annual Report.
(a) Financial Statements, pages 26 to 46.
(b) Management's Discussion and Analysis of Results of Operations
and Financial Condition and Summary of Selected Financial Data
on pages 17 to 25 excluding the information on page 24 relating
to Dividend Policy.
(c) Stock Information and Stock Exchanges, on page 47.
2. Pitney Bowes Inc. Notice of the 1997 Annual Meeting and Proxy
Statement dated April 3, 1997 pages 3, 4, 7, 8, 9, 11-14, 20 and
portions of pages 2, 5, 6, 15 and 19 are incorporated by reference
into Part III of this Form 10-K Annual Report.
PART I
Item 1. Business
Pitney Bowes Inc. and its subsidiaries (the company) operate within three
industry segments: business equipment, business services, and commercial
and industrial financing. The company operates in two geographic areas:
the United States and outside the U.S. Financial information concerning
revenue, operating profit and identifiable assets by industry segment and
geographic area appears on pages 43 and 44 of the Pitney Bowes Inc. 1996
Annual Report to Stockholders and is incorporated herein by reference.
Business Equipment. Business equipment consists of four products, supplies
and service classes: mailing systems, copying systems, facsimile systems
and related financing. These products and services are sold, rented or
leased by the company while supplies and services are sold. Some of the
company's products are sold through dealers outside the U.S.
Mailing systems include postage meters, mailing machines, address hygiene
software, manifest systems, letter and parcel scales, mail openers,
mailroom furniture, folders, and paper handling and shipping equipment.
Copying systems include a wide range of copying systems and supplies.
Facsimile systems include a wide range of facsimile systems and supplies.
The financial services operations provide lease financing for the company's
products in the U.S., Canada, the United Kingdom, Germany, France, certain
other European countries and Australia.
The company sold its Dictaphone Corporation (Dictaphone) and Monarch
Marking Systems, Inc. (Monarch) subsidiaries in 1995. Dictaphone and
Monarch have been classified in the Consolidated Statement of Income as
discontinued operations; revenue and income from continuing operations
exclude the results of Dictaphone and Monarch for all periods presented.
(See Note 12, Discontinued operations, of the Notes to the Consolidated
Financial Statements in the Pitney Bowes Inc. 1996 Annual Report to
Stockholders).
Business Services. Business services consists of facilities management and
mortgage servicing.
Facilities management services are provided by the company's Pitney Bowes
Management Services, Inc. subsidiary (P.B.M.S.). P.B.M.S. is a leader in
providing on-and off-site services which help customers manage the
creation, processing, storage, retrieval, distribution and tracking of
documents and messages in both paper and digital form. P.B.M.S. provides
customers with a variety of business support services to manage mail, copy
and repographic centers, facsimile, electronic printing and imaging
services, and records management.
Mortgage servicing is provided by Atlantic Mortgage & Investment
Corporation (A.M.I.C.) a wholly-owned subsidiary of Pitney Bowes Credit
Corporation. A.M.I.C. provides billing, collecting and processing services
for major investors in residential first mortgages for a fee.
Commercial and Industrial Financing. The commercial and industrial
financing segment provides large ticket financing programs, covering a
broad range of products, and other financial services to the commercial and
industrial markets in the U.S. Products financed include both commercial
and non-commercial aircraft, over-the-road trucks and trailers, railcars
and locomotives and high-technology equipment such as data processing and
communications equipment as well as commercial real estate properties. The
finance operations have also participated, on a select basis, in certain
other types of financial transactions including: sale of certain lease
transactions, senior secured loans in connection with acquisitions,
leveraged buyout and recapitalization financings, residual value insurance
and certain project financings. The company also finances a broad range
of other commercial and industrial products to small and medium-sized
businesses throughout the United States, marketing exclusively through a
nationwide network of brokers and independent lessors.
Consolidated financial services operations financed 39 percent of
consolidated sales from continuing operations in 1996 and 1995, and 41
percent in 1994. The lower percentage of sales financed compared to 1994,
is a direct result of the increasing significance of the facilities
management business to the company's revenue. The facilities management
business does not utilize traditional financing services used by the other
businesses within the company.
Financial services' (which includes commercial and industrial, and internal
financing) borrowing strategy is to use a balanced mix of debt maturities,
variable- and fixed-rate debt and interest rate swap agreements to control
its sensitivity to interest rate volatility. The company utilizes interest
rate swap agreements when it considers the economic benefits to be
favorable. Swap agreements have been principally utilized to fix interest
rates on commercial paper and/or obtain a lower cost on debt than would
otherwise be available absent the swap. The financial services businesses
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. While the company's funding strategy may reduce
sensitivity to interest rate changes over the long-term, effective interest
costs have been and will continue to be impacted by interest rate changes.
The company periodically adjusts prices on its new leasing and financing
transactions to reflect changes in interest rates; however, the impact of
these rate changes on revenue is usually less immediate than the impact on
borrowing costs.
Nonrecurring Items, Net. Through December 31, 1996, the company
successfully implemented the plan adopted in the third quarter of 1994,
which was designed to address the impact of technology on workforce
requirements and to further refine its strategic focus on core businesses.
The plan resulted in a $93.2 million charge against earnings in 1994. The
details of this plan are discussed in Note 13 to the Consolidated Financial
Statements. The company made severance and benefit payments of
approximately $65 million, the majority of which were paid in 1995 to
employees separated under the strategic focus initiatives.
Completion of the actions contemplated under the strategic initiatives cost
the company approximately $5 million in excess of that initially provided in
1994. This excess was recorded in selling, service and administrative expense
in 1995. Also, the company has written down assets and incurred certain other
exit costs, as planned, by approximately $19 million and $3 million,
respectively, the majority of which occurred in 1994. As of December 31,
1996, the company has successfully completed its plan.
Support Services. The company maintains extensive field service
organizations in the U.S. and certain other countries to provide support
services to customers who have rented, leased or purchased equipment. Such
support services, provided primarily on the basis of annual maintenance
contracts, accounted for 12 percent of revenue in 1996 and 1995, and 13
percent in 1994.
Marketing. The company's products and services are marketed through an
extensive network of offices in the U.S. and through a number of
subsidiaries and independent distributors and dealers in many countries
throughout the world as well as through direct marketing and outbound
telemarketing. The company sells to a variety of business, governmental,
institutional and other organizations (See Regulatory Matters below). It
has a broad base of customers, and is not dependent upon any one customer
or type of customer for a significant part of its business. The company
does not have significant backlog or seasonality relating to its
businesses.
Operations Outside the United States. The company's manufacturing
operations outside the U.S. are in the United Kingdom.
Competition. The company has historically been a leading supplier of
certain products and services in its business segments, particularly
postage meters and mailing machines. However, all segments have strong
competition from a number of companies. In particular, it is facing
competition in many countries for new placements from several postage meter
and mailing machine suppliers, and its mailing systems products face some
competition from products and services offered as alternative means of
message communications. P.B.M.S., a market leader in providing mail and
related support services to the corporate, financial services, and
professional services markets, competes against national, regional and
local firms specializing in facilities management. The company believes
that its long experience and reputation for product quality, and its sales
and support service organizations are important factors in influencing
customer choices with respect to its products and services.
The financing business is highly competitive with aggressive rate
competition. Leasing companies, commercial finance companies, commercial
banks and other financial institutions compete, in varying degrees, in the
several markets in which the finance operations do business and range from
very large, diversified financial institutions to many small, specialized
firms. In view of the market fragmentation and absence of any dominant
competitors which result from such competition, it is not possible to
provide a meaningful description of the finance operations' competitive
position in these markets.
Research and Development/Patents. The company has research and development
programs that are directed towards developing new products and improving
the economy and efficiency of its operations, including its production and
service methods. Expenditures on research and development totaled $81.7
million, $81.8 million and $78.6 million in 1996, 1995 and 1994,
respectively.
As a result of its research and development efforts, the company has been
awarded a number of patents with respect to several of its existing and
planned products. However, the company believes its businesses are not
materially dependent on any one patent or any group of related patents.
The company also believes its businesses are not materially dependent on
any one license or any group of related licenses.
Material Supplies. The company believes it has adequate sources for most
parts and materials for the products it manufactures. However, products
manufactured by the company rely to an increasing extent on microelectronic
components, and temporary shortages of these components have occurred from
time to time due to the demands by many users of such components.
The company purchases copiers, facsimile equipment and scales, primarily
from Japanese suppliers. The company believes that it has adequate sources
available to it for the foreseeable future for such products.
Environmental Regulation. The company is subject to federal, state and
local laws and regulations relating to the environment and is currently
named as a member of various groups of potentially responsible parties in
administrative or court proceedings. As we previously announced, in 1996
the Environmental Protection Agency (EPA) issued an administrative order
directing the company to be part of a soil cleanup program at the Sarney
Farm site in Amenia, New York. The site was operated as a landfill between
the years 1968 and 1970 by parties unrelated to Pitney Bowes, and wastes
from a number of industrial sources were disposed of there. The company
does not concede liability for the condition of the site, but is working
with the EPA to identify, and then seek reimbursement from, other
potentially responsible parties. The company estimates the total cost of
our remediation effort to be in the range of $3 million to $5 million over
the next 18 months.
The administrative and court proceedings referred to above are in different
states. It is impossible to estimate with any certainty the total cost of
remediating, the timing or extent of remedial actions which may be required
by governmental authorities, or the amount of liability, if any. If and
when it is possible to make a reasonable estimate of the liability in any
of these matters, a provision will be made as appropriate. Based on the
facts presently known, the company believes that the outcome of any current
proceeding will not have a material adverse effect on its financial
condition or results of operations.
Regulatory Matters. In June 1995, the United States Postal Service
(U.S.P.S.) issued final regulations on the manufacture, distribution and
use of postage meters. The regulations cover four general categories:
meter security, administrative controls, Computerized Meter Resetting
Systems (C.M.R.S.) and other issues.
In general, the regulations put reporting and performance obligations on
meter manufacturers, outline potential administrative sanctions for failure
to meet these obligations and require changes in the fund management system
of C.M.R.S. (such as the company's Postage by Phone (R) System) to give the
U.S.P.S. more direct control over meter licensee deposits.
The company is working with the U.S.P.S. to ensure that these regulations
provide mailing customers and the U.S.P.S. with the intended benefits, and
that the company also benefits. The company has begun to implement these
changes, including modifying our Postage by Phone (R) system so that
customers deposit prepayments of postage into a U.S.P.S. account rather
than a trust account. Resetting meters through Postage by Phone (R) still
requires the customer to request an authorization and a reset code from the
company, a service for which it charges a fee. The company continues to
believe that the financial impact of implementing these regulations will
not be material to the company.
In May 1996, the U.S.P.S. issued a proposed schedule for the phase out of
mechanical meters in the United States marketplace. The schedule proposed
that:
- - as of June 1, 1996, placements of mechanical meters will be available
only as replacements for existing licensed mechanical meters
- - as of March 1, 1997, mechanical meters may not be used by persons or
firms who process mail for a fee
- - as of December 31, 1997, mechanical meters that interface with mail
machines or processors will no longer be approved
- - as of March 1, 1999, all other mechanical meters (stand-alone meters)
will no longer be approved.
The company has voluntarily halted new placements of mechanical meters in
the United States as of June 1, 1996. The company also has been actively
and voluntarily pursuing removal from the market by March 1997, of
mechanical meters used by persons or firms who process mail for a fee as
set forth in the U.S.P.S. proposed schedule for that segment of meter
users. Further, the company agreed, in March 1997, to use its best efforts
to remove from the market mechanical systems meters (meters that interface
with mail machines or processors), by a revised target date of December 31,
1998, in lieu of the December 31, 1997 date specified in the U.S.P.S.
proposed schedule.
The company continues to work with the U.S.P.S. to reach agreement on all
aspects of a mechanical meter migration schedule that reflects the
interests of its customers while minimizing any negative impact on the
company. The company's constant focus on bringing new technologies into
the mailing market has already resulted in a significant shift in the
makeup of the company's meter base. In the last 10 years, 1986 to 1996,
the percentage of electronic meters in the company's U.S. installed base
has risen from 6% to nearly 60%. Until a mechanical meter migration plan
is finalized, the financial impact, if any, on the company cannot be
determined with certainty. However, based on the proposed schedule and
agreements reached to date the company believes that the plan will not
cause a material adverse financial impact on the company.
The May 1996 U.S.P.S. proposed document also discusses a change in metering
technology that would include use of a digital, information-based indicia
standard. This standard has not yet been developed, although initial
specifications were proposed by the U.S.P.S. in July 1996. At some
undetermined date in the future, the U.S.P.S. believes that digital
metering will eventually replace electronic metering in the United States.
The company supports a digital product migration strategy, and the company
anticipates working with the U.S.P.S. to achieve a timely and effective
substitution plan. However, until the U.S.P.S. finalizes standards for a
digital information-based indicia program (and clarifies transition to the
new standard), the impact of this proposal, if any, on the company cannot
be determined. The company has taken the lead in deploying digital meters
in the marketplace, with over 100,000 digital printing meters already
placed into service during 1995 and 1996.
Employee Relations. At December 31, 1996, 24,054 persons were employed by
the company in the U.S. and 4,571 outside the U.S. Employee relations are
considered to be satisfactory. The great majority of employees are not
represented by any labor union. Management follows the policy of keeping
employees informed of its decisions, and encourages and implements employee
suggestions whenever practicable.
Item 2. Properties
The company's World Headquarters and certain other office and manufacturing
facilities are located in Stamford, Connecticut. Additional office
facilities are located in Shelton, Connecticut. The company maintains
research and development operations at a corporate engineering and
technology center in Shelton, Connecticut. A sales and service training
center is located near Atlanta, Georgia. The company believes that its
current manufacturing, administrative and sales office properties are
adequate for the needs of all of its business segments.
Business Equipment. Business equipment products are manufactured in a
number of plants principally in Connecticut, as well as in Harlow, England.
Most of these facilities are owned by the company. There are 153 sales,
support services, and finance offices, substantially all of which are
leased, located throughout the U.S. and in a number of other countries.
Executive and administrative offices of the financing operations within the
U.S. are located in Norwalk, Connecticut. Offices outside the U.S. are
maintained in London, England; Heppenheim, Germany; Paris, France;
Mississauga, Ontario, Canada; North Ryde, Australia; Oslo, Norway; and
Dublin, Ireland.
Business Services. The company's P.B.M.S. subsidiary is headquartered in
Stamford, Connecticut and leases facilities in 39 cities located throughout
the U.S. as well as leased facilities in Montreal, Quebec and Toronto,
Ontario, Canada; and London, England. The Atlantic Mortgage and Investment
Corporation operates in Jacksonville, Florida.
Commercial and Industrial Financing. Pitney Bowes Credit Corporation
leases executive and administrative offices in Norwalk, Connecticut and
Tualatin, Oregon. There are nine leased regional and district sales
offices located throughout the U.S.
Item 3. Legal Proceedings
In the course of normal business, the company is occasionally party to
lawsuits. These may involve litigation by or against the company relating
to, among other things:
- - contractual rights under vendor, insurance or other contracts
- - intellectual property or patent rights
- - equipment, service or payment disputes with customers
- - disputes with employees
The company is currently a defendant in a number of lawsuits, none of which
should have, in the opinion of management and legal counsel, a material
adverse effect on the company's financial position or results of
operations.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of the Registrant
Executive
Officer
Name Age Title Since
Michael J. Critelli 48 Chairman and Chief 1988
Executive Officer
Marc C. Breslawsky 54 President and Chief 1985
Operating Officer
Amy C. Corn 43 Corporate Secretary and Senior 1996
Associate General Counsel
Meredith B. Fischer 44 Vice President - Communications, 1996
Marketing and Future Strategy
Arlen F. Henock 40 Vice President - Controller and 1996
Chief Tax Counsel
John N. D. Moody 52 President - U.S. Mailing Systems 1997
Sara E. Moss 50 Vice President - General Counsel 1996
Murray L. Reichenstein 59 Vice President - Chief 1996
Financial Officer
Douglas A. Riggs 52 Vice President - Chief Corporate 1988
Affairs Officer
Carole F. St. Mark 54 President and Chief Executive Officer - 1985
Pitney Bowes Business Services
Johnna G. Torsone 46 Vice President - Personnel 1993
Joseph E. Wall 45 Vice President - Chief Technology Officer1996
There is no family relationship among the above officers, all of which have
served in various corporate, division or subsidiary positions with the
company for at least the past five years except S. E. Moss, M. L.
Reichenstein and J. E. Wall.
Ms. Moss joined the company from the New York law firm of Howard, Darby &
Levin, where she had been a Senior Partner since 1985. Before joining
Howard, Darby & Levin, Ms. Moss was an Assistant United States Attorney in
the Southern District of New York. Ms. Moss served as a law clerk for the
Honorable Constance Baker Motley, United States District Judge, Southern
District of New York.
Mr. Reichenstein joins the company with over 31 years of experience with
Ford Motor Company. During his time with Ford he held a variety of
positions of increasing responsibility in the U.S. and Europe, including
Director of Manufacturing Services, Vice President, Car Product Planning,
and Chief Financial Officer, Ford Europe; Vice President & Controller of
Ford Automotive Operations Worldwide; and Vice President & Controller of
Ford Motor Company.
Dr. Wall was most recently the Vice President - Technology of Emerson
Electric, which he joined in 1986 as Director of Research and Development
for its since-divested Rosemount Aerospace Division. Prior to joining
Emerson, Dr. Wall held positions of increasing responsibility at Honeywell,
including Section Chief and Senior Principal Research Engineer.
George B. Harvey, former Chairman and Chief Executive Officer, retired at
year end 1996 in accordance with the company's retirement age of 65.
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholders' Matters
The sections entitled "Stock Information" and "Stock Exchanges" on page 47
of the Pitney Bowes Inc. 1996 Annual Report to Stockholders are
incorporated herein by reference. At December 31, 1996, the company had
32,258 common stockholders of record.
Item 6. Selected Financial Data
The section entitled "Summary of Selected Financial Data" on page 25 of the
Pitney Bowes Inc. 1996 Annual Report to Stockholders is incorporated herein
by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The section entitled "Management's Discussion and Analysis of Results of
Operations and Financial Condition" on pages 17 to 24 of the Pitney Bowes
Inc. 1996 Annual Report to Stockholders is incorporated herein by
reference, except for the section on page 24 relating to "Dividend Policy".
The section under "Legal, Environmental and Regulatory Matters" titled
"Regulation" on page 23 of the "Management's Discussion and Analysis of
Results of Operations and Financial Condition" incorporated herein by
reference as mentioned above should be read in conjunction with the
discussion under "Regulatory Matters" in Part I, Item 1 on page 5 of this
Annual Report on Form 10-K.
The company cautions readers that any forward-looking statements (those
which talk about the company's or management's current expectations as to
the future) in this Form 10-K or made by company management involve risks
and uncertainties which may change based on various important factors.
Some of the factors which could cause future financial performance to
differ materially from the expectations as expressed in any forward-looking
statement made by or on behalf of the company include:
- - changes in postal regulations
- - timely development and acceptance of new products
- - success in gaining product approval in new markets where regulatory
approval is required
- - successful entry into new markets
- - mailer's utilization of alternative means of communication or
competitor's products
- - the company's success at managing customer credit risk
Item 8. Financial Statements and Supplementary Data
The financial statements, together with the report thereon of Price
Waterhouse LLP dated January 30, 1997, appearing on pages 26 to 46 of the
Pitney Bowes Inc. 1996 Annual Report to Stockholders are incorporated
herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Except for information regarding the company's executive officers (see
"Executive Officers of the Registrant" on page 8 of this form 10-K), the
information called for by this Item is incorporated herein by reference to
the sections entitled "Election of Directors" and "Security Ownership of
Directors and Executive Officers"
on pages 2 to 5 and 6 to 8 of the Pitney Bowes Inc.
Notice of the 1997 Annual Meeting and Proxy Statement.
Item 11. Executive Compensation
The sections entitled "Directors' Compensation", "Executive Officer
Compensation", "Severance and Change of Control Arrangements" and "Pension
Benefits" on pages 8, 9, 11 to 15, and 19 to 20 of the Pitney Bowes Inc.
Notice of the 1997 Annual Meeting and Proxy Statement are incorporated
herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The section entitled "Security Ownership of Directors and Executive
Officers" on pages 6 to 8 of the Pitney Bowes Inc. Notice of the 1997
Annual Meeting and Proxy Statement is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
None.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial statements - see Item 8 on page 10 and
"Index to Financial Schedules" on page 19.
2. Financial statement schedules - see "Index to
Financial Schedules" on page 19.
3. Exhibits (numbered in accordance with Item 601 of
Regulation S-K).
Reg. S-K Status or Incorporation
Exhibits Description by Reference
(3)(a) Restated Certificate Incorporated by reference to Exhibit
of Incorporation, as (3a) to Form 10-K as filed with the
amended Commission on March 30, 1993.
(Commission file number 1-3579)
(b) By-laws, as amended Incorporated by reference to Exhibit
(3b) to Form 10-K as filed with the
Commission on April 1, 1996.
(Commission file number 1-3579)
(4)(a) Form of Indenture Incorporated by reference to Exhibit
dated as of November (4a) to Form 10-K as filed with the
15, 1987 between the Commission on March 24, 1988.
company and Chemical (Commission file number 1-3579)
Bank, as Trustee
(b) Form of Debt Securities Incorporated by reference to Exhibit
(4b) to Form 10-K as filed with the
Commission on March 24, 1988.
(Commission file number 1-3579)
(c) Form of First Incorporated by reference to Exhibit
Supplemental Indenture (1) to Form 8-K as filed with the
dated as of June 1, Commission on June 16, 1989.
1989 between the (Commission file number 1-3579)
company and Chemical
Bank, as Trustee
(d) Form of Indenture Incorporated by reference to Exhibit
dated as of April 15, (4.1) to Registration Statement on Form
1990 between the S-3(No. 33-33948) as filed with the
company and Chemical Commission on March 28, 1990.
Bank, as successor to
Manufacturers Hanover
Trust Company, as
Trustee
(e) Forms of Debt Incorporated by reference to Exhibit
Securities (4) to Form 10-Q as filed with the
Commission on May 14, 1990. (Commission
file number 1-3579)
(f) Form of Indenture Incorporated by reference to Exhibit
dated as of May 1, (4a) to Registration Statement on Form
1985 between Pitney S-3(No. 2-97411) as filed with the
Bowes Credit Corporation Commission on May 1, 1985.
and Bankers Trust
Company, as Trustee
(g) Letter Agreement Incorporated by reference to Exhibit
between Pitney Bowes (4b) to Registration Statement on Form
Inc. and Bankers Trust S-3 (No. 2-97411) as filed with the
Company, as Trustee Commission on May 1, 1985.
(h) Form of First Incorporated by reference to Exhibit
Supplemental Indenture (4b) to Registration Statement on Form
dated as of December S-3 (No. 33-10766) as filed with the
1, 1986 between Pitney Commission on December 12, 1986.
Bowes Credit
Corporation and
Bankers Trust Company,
as Trustee
(i) Form of Second Incorporated by reference to Exhibit
Supplemental Indenture (4c) to Registration Statement on Form S-
dated as of February 3(No. 33-27244) as filed with the
15, 1989 between Commission on February 24, 1989.
Pitney Bowes Credit
Corporation and
Bankers Trust Company,
as Trustee
(j) Form of Third Incorporated by reference to Exhibit (1)
Supplemental Indenture to Form 8-K as filed with the Commission
dated as of May 1, on May 16, 1989. (Commission file number
1989 between Pitney 1-3579)
Bowes Credit
Corporation and
Bankers Trust Company,
as Trustee
(k) Indenture dated as of Incorporated by reference to Exhibit
November 1, 1995 (4a) to Amendment No. 1 to Registration
between the company Statement on Form S-3 (No. 33-62485) as
and Chemical Bank, as filed with the Commission on November 2,
Trustee 1995.
(l) Preference Share Incorporated by reference to Exhibit (4)
Purchase Rights to Form 8-K as filed with the Commission
Agreement dated on March 13, 1996. (Commission file
December 11, 1995 number 1-3579)
between the company
and Chemical Mellon
Shareholder Services,
LLC., as Rights Agent
The company has outstanding certain other long-term indebtedness.
Such long-term indebtedness does not exceed 10% of the total
assets of the company; therefore, copies of instruments defining
the rights of holders of such indebtedness are not included as
exhibits. The company agrees to furnish copies of such
instruments to the Securities and Exchange Commission upon
request.
Executive Compensation Plans:
(10) (a) Retirement Plan for Incorporated by reference to Exhibit
Directors of Pitney (10a) to Form 10-K as filed with the
Bowes Inc. Commission on March 30, 1993.
(Commission file number 1-3579)
(b) Pitney Bowes Inc. Exhibit (i)
Directors' Stock Plan.
(as amended and
restated 1997)
(c) Pitney Bowes 1991 Incorporated by reference to Exhibit
Stock Plan (10b) to Form 10-K as filed with the
Commission on March 25,1992 (Commission
file number 1-3579)
(c.1) First Amendment to
Pitney Bowes 1991 Exhibit (ii)
Stock Plan
(d) Pitney Bowes Inc. Key Incorporated by reference to Exhibit
Employees' Incentive (10c) to Form 10-K as filed with the
Plan (as amended and Commission on March 25,1992 (Commission
restated) file number 1-3579)
(d.1) First Amendment to Exhibit (iii)
Pitney Bowes Inc. Key
Employees Incentive
Plan (as Amended and
Restated: June 10,
1991)
(e) 1979 Pitney Bowes Incorporated by reference to Exhibit
Stock Option Plan (as (10d) to Form 10-K as filed with the
amended and restated) Commission on March 25, 1992.
(Commission file number 1-3579)
(f) Pitney Bowes Severance Incorporated by reference to Exhibit
Plan, as amended, (10) to Form 10-K as filed with the
dated December 12, Commission on March 23, 1989.
1988 (Commission file number 1-3579)
(g) Pitney Bowes Executive Incorporated by reference to Exhibit
Severance Policy, (10h) to Form 10-K as filed with the
adopted December 11, Commission on April 1, 1996.
1995. (Commission file number 1-3579)
(h) Pitney Bowes Inc. Exhibit (iv)
Deferred Incentive
Savings Plan for the
Board of Directors.
(i) Pitney Bowes Inc. Exhibit (v)
Deferred Incentive
Savings Plan
(11) Statement re Exhibit (vi)
computation of per
share earnings
(12) Computation of ratio Exhibit (vii)
of earnings to fixed
charges
(13) Portions of annual Exhibit (viii)
report to security
holders
(21) Subsidiaries of the Exhibit (ix)
registrant
(23) Consent of experts and Exhibit (x)
counsel
(27) Financial Data Schedule Exhibit (xi)
(b) No reports on Form 8-K were filed for the three months ended
December 31, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
By /s/ Michael J. Critelli
(Michael J. Critelli)
Chairman and Chief
Executive Officer
Date March 31, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Michael J. Critelli Chairman and Chief March 31, 1997
Michael J. Critelli Executive Officer - Director
/s/ Marc C. Breslawsky President and Chief March 31, 1997
Marc C. Breslawsky Operating Officer - Director
/s/ Murray L. Reichenstein Vice President - Chief March 31, 1997
Murray L. Reichenstein Financial Officer
/s/ Arlen F. Henock Vice President - Controller March 31, 1997
Arlen F. Henock and Chief Tax Counsel
(principal accounting
officer)
/s/ Linda G. Alvarado Director March 31, 1997
Linda G. Alvarado
/s/ William E. Butler Director March 31, 1997
William E. Butler
/s/ Colin G. Campbell Director March 31, 1997
Colin G. Campbell
Signature Title Date
/s/ Charles E. Hugel Director March 31, 1997
Charles E. Hugel
/s/ David T. Kimball Director March 31, 1997
David T. Kimball
/s/ Leroy D. Nunery Director March 31, 1997
Leroy D. Nunery
/s/ Michael I. Roth Director March 31, 1997
Michael I. Roth
/s/ Phyllis S. Sewell Director March 31, 1997
Phyllis S. Sewell
/s/ Arthur R. Taylor Director March 31, 1997
Arthur R. Taylor
INDEX TO FINANCIAL SCHEDULES
The financial schedules should be read in conjunction with the financial
statements in the Pitney Bowes Inc. 1996 Annual Report to Stockholders.
Schedules not included herein have been omitted because they are not
applicable or the required information is shown in the financial statements
or notes thereto. Also, separate financial statements of less than 100
percent owned companies, which are accounted for by the equity method, have
been omitted because they do not constitute significant subsidiaries.
Page
Pitney Bowes Inc.:
Report of independent accountants on financial
statement schedule 20
Financial statement schedule for the years 1994 - 1996:
Valuation and qualifying accounts and
reserves (Schedule II) 21
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of Pitney Bowes Inc.
Our audits of the consolidated financial statements referred to in our
report dated January 30, 1997 appearing on page 46 of the Pitney Bowes Inc.
1996 Annual Report to Stockholders (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-
K) also included an audit of the financial statement schedule listed by
reference in Item 14(a)2 of this Form 10-K. In our opinion, this financial
statement schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.
Price Waterhouse LLP
Stamford, Connecticut
January 30, 1997
PITNEY BOWES INC.
SCHEDULE II - VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1994 TO 1996
(Dollars in thousands)
Additions
Balance at charged to Balance
beginning of costs and at end
Description year expenses Deductions of year
Allowance for doubtful accounts
1996 $13,050 $ 9,894 $ 6,784(3) $ 16,160
1995 $16,909 $ 4,126(1) $ 7,985(2)(3) $ 13,050
1994 $16,691 $ 4,262 $ 4,044(3) $ 16,909
Allowance for credit losses on finance receivables
1996 $113,506 $74,785 $74,554(3) $113,737
1995 $113,091 $68,275 $67,860(3) $113,506
1994 $116,512 $64,933 $68,354(3) $113,091
Reserve for transition costs(4)
1996 $ 22,986 $ - $17,258(5) $ 5,728(6)
1995 $ 64,893 $ 5,145 $47,052(5) $ 22,986
1994 $ 344 $93,258 $28,709(5) $ 64,893
Valuation allowance for deferred tax asset(4)
1996 $48,693 $ 3,066 $ 5,158 $ 46,601
1995 $37,532 $12,076 $ 915 $ 48,693
1994 $25,975 $12,867 $ 1,310 $ 37,532
(1) Includes $382 of additions applicable to a business at acquisition.
(2) Includes $2,406 of deductions applicable to a business disposition.
(3) Principally uncollectible accounts written off.
(4) Included in balance sheet as a liability.
(5) Includes amounts for asset write downs and amounts paid as well as
reclassifications.
(6) Remaining amount represents $4 million and $2 million for separation
and benefit costs and other.