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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
For the year ended December 31, 2000
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 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 ($1 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)
Indicate by check mark whether 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 ____
----
Indicate by check mark if 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 aggregate market value of voting stock (common stock and $2.12 preference
stock) held by non-affiliates of the Registrant as of March 16, 2001 is
$8,502,157,743.
Number of shares of common stock, $1 par value, outstanding as of March 16, 2001
is 247,562,695.
DOCUMENTS INCORPORATED BY REFERENCE:
1. Only the following portions of the Pitney Bowes Inc. 2000 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 44 to 65.
(b) Management's Discussion and Analysis of Financial Condition and
Results of Operations and Summary of Selected Financial Data on pages
33 to 43, excluding the information on page 42 relating to Dividend
Policy.
(c) Stock Exchanges and Stock Information, on page 66.
2. Pitney Bowes Inc. Notice of the 2001 Annual Meeting and Proxy Statement
dated March 23, 2001, pages 7 to 8, 11 to 15 and 20 and portions of pages
4, 5, 9, 10, 16, 19 and 21 are incorporated by reference into Part III of
this Form 10-K Annual Report.
PART I
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Item 1. Business
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Pitney Bowes Inc. and its subsidiaries (the company) operate in three reportable
segments: Global Mailing, Enterprise Solutions and Capital Services. The company
operates in the United States and outside the U.S. Financial information
concerning revenue, operating profit and identifiable assets by reportable
segment and geographic area appears on pages 61 to 63 of the Pitney Bowes Inc.
2000 Annual Report to Stockholders and is incorporated herein by reference.
Global Mailing. Global Mailing includes worldwide revenues from the rental of
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postage meters and the sale, rental and financing of mailing equipment,
including mail finishing and software-based mail creation equipment, software-
based shipping, transportation and logistics systems, and related supplies and
services. Products are sold, rented or financed by the company, while supplies
and services are sold. Some of the company's products are sold through dealers
outside the U.S.
Products include postage meters, mailing machines, address hygiene software,
manifest systems, letter and parcel scales, mail openers, mailroom furniture,
folders, paper handling, shipping equipment and software-based shipping and
logistics systems.
Enterprise Solutions. Enterprise Solutions includes Pitney Bowes Management
- --------------------
Services and Document Messaging Technologies. Pitney Bowes Management Services
includes revenues from facilities management contracts for advanced mailing,
reprographic, document management and other high-value services. Document
Messaging Technologies includes revenues from the sale, service and financing of
high speed, software-enabled production mail systems, sortation equipment,
incoming mail systems, electronic statement, billing and payment solutions, and
mailing software. Products are sold, rented or financed by the company, while
supplies and services are sold.
Facilities management services are provided by the company's Pitney Bowes
Management Services, Inc. subsidiary (P.B.M.S.). P.B.M.S. provides customers
with a variety of business support services to manage copy, reprographic and
mail centers, facsimile, electronic printing and imaging services, and records
management. P.B.M.S. is a major provider of 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.
The financial services operations provide lease financing for the company's
products (for both the Global Mailing and Enterprise Solutions segments) in the
U.S., Canada, the United Kingdom, Germany, France, Norway, Ireland, Australia,
Austria, Spain, Italy, Switzerland and Sweden. Consolidated financial services
operations financed 37 percent of consolidated sales in 2000, 37 percent in
1999, and 39 percent in 1998. Consolidated financial services operations
financed approximately 76 percent, 73 percent and 76 percent of leasable sales
in 2000, 1999, and 1998, respectively.
2
Capital Services. Capital Services provides large-ticket financing and fee-
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based programs covering a broad range of products and other financial services.
Products financed include both commercial and non-commercial aircraft, over-the-
road trucks and trailers, locomotives, railcars, rail and bus facilities, office
equipment and high-technology equipment such as data processing and
communications equipment. The finance operations have also participated, on a
select basis, in certain other types of financial transactions including: sales
of lease transactions, senior secured loans in connection with acquisitions,
leveraged buyout and recapitalization financings and certain project financings.
Discontinued Operations. On December 11, 2000, the company announced that its
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Board of Directors approved a formal plan to spin off the company's Office
Systems business to stockholders as an independent, publicly-traded company.
The transaction is expected to be completed by the end of the third quarter
2001. Operating results of Office Systems have been segregated and reported as
discontinued operations in the Consolidated Statements of Income. Prior year
results have been reclassified to conform to the current year presentation.
On January 14, 2000, the company sold its mortgage servicing business, Atlantic
Mortgage & Investment Corporation (AMIC), a wholly-owned subsidiary of the
company, to ABN AMRO North America. The company received approximately $484
million in cash at closing. Accordingly, operating results of AMIC have been
segregated and reported as discontinued operations in the Consolidated
Statements of Income. Prior year results have been reclassified to conform to
the current year presentation. In connection with the sale, the company recorded
a loss of approximately $27.6 million (net of taxes of $18.4 million) for the
year ended December 31, 1999. The transaction is subject to post-closing
adjustments.
As part of the company's strategy to reduce the capital committed to asset-based
financing, while increasing fee-based income, in 1998 the company sold its
broker-oriented small-ticket leasing business to General Electric Capital
Corporation (GECC), a subsidiary of General Electric Company. As part of the
sale, the operations, employees and substantially all the assets of Colonial
Pacific Leasing Corporation (CPLC) were transferred to GECC. 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. Accordingly, operating results of CPLC have been segregated and reported
as discontinued operations in the Consolidated Statements of Income. In
connection with this transaction, the company recorded a gain of approximately
$3.7 million (net of taxes of $2.0 million) for the year ended December 31,
1999. This gain resulted from the settlement of post-closing adjustments in 1999
related to the sale, offset by the cost of settlement with regard to a dispute
with GECC over certain assets that were included in the sale.
Support Services. The company maintains extensive field service organizations
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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
approximately 13 percent of revenue in 2000, and 12 percent in 1999 and 1998.
Marketing. The company's products and services are marketed through an
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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, outbound telemarketing, and the Internet.
The company sells to a variety of business, governmental, institutional and
other organizations. 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.
3
Competition. The company has historically been a leading supplier of certain
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products and services in its business segments, particularly postage meters and
mailing machines. However, all of its segments have strong competition from a
number of companies. In particular, the company is facing competition in many
countries for new placements from several postage meter and mailing machine
suppliers, and its mailing systems products face competition from products and
services offered as alternative means of message communications. P.B.M.S., a
major provider of business 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 service methods.
Expenditures on research and development totaled $120.5 million, $108.9 million,
and $100.8 million in 2000, 1999, and 1998, 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
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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.
Environmental Regulation. The company is subject to federal, state and local
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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 the company, and wastes from a number of industrial sources were
disposed there. The company does not concede liability for the condition of the
site, but is working with the EPA and other potentially responsible parties to
evaluate remediation options and negotiate allocation of past and future
remediation costs. Based on the facts presently known, we estimate the total
cost of our remediation effort to be approximately $5 million. This amount has
been recorded as a liability in the Consolidated Balance Sheet at December 31,
2000.
The administrative and court proceedings referred to above are in different
states. It is difficult to estimate with any certainty the total cost of
remediating, the timing or extent of remedial actions which may be required by
governmental authorities. However, 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.
4
Regulatory Matters. In 2000, the U.S. Postal Service (U.S.P.S.) issued a
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proposed schedule for the phaseout of manually reset electronic meters in the
U.S. as follows:
. As of February 1, 2000, new placements of manually reset electronic meters
are no longer permitted.
. Current users of manually reset electronic meters can continue to use these
meters for the term of their current rental and lease agreements. Leases or
rentals due to expire in the year 2000 can be extended to December 31,
2001.
In August 2000, the U.S.P.S. also issued a proposal to cease placements of non-
digital, or letterpress, meters as follows:
. New placements of non-digital meters with a "timeout" feature that enables
the meters to be automatically disabled, if not reset within a specified
time period, are no longer permitted after December 2003.
. New placements of non-digital meters without the "timeout" feature are no
longer permitted after June 2001.
The company has submitted comments to the U.S.P.S.'s proposed schedules
described above. Based on the proposed schedules, the company believes that the
phaseout of manually reset electronic meters will not cause a material adverse
financial impact on the company. The company is working with the U.S.P.S. to
meet the non-digital meter phaseout schedule and is currently evaluating the
potential financial impact on the company.
As a result of the company's aggressive efforts to meet the U.S.P.S's mechanical
meter migration phaseout schedule combined with the company's ongoing and
continuing investment in advanced postage evidencing technologies, mechanical
meters represented less than 1% of the company's installed U.S. meter base at
December 31, 2000 and 1999. The company continues to work in close cooperation
with the U.S.P.S., to convert those mechanical meter customers who have not
migrated to digital or electronic meters.
In May 1995, the U.S.P.S. publicly announced its concept of its Information
Based Indicia Program (IBIP) for future postage evidencing devices. As initially
stated by the U.S.P.S., the purpose of the program was to develop a new standard
for future digital postage evidencing devices which would significantly enhance
postal revenue security and support expanded U.S.P.S. value-added services to
mailers. The program would consist of the development of four separate
specifications:
. the Indicium specification - the technical specifications for the indicium
to be printed
. a Postal Security Device specification - the technical specification for
the device that would contain the accounting and security features of the
system
. a Host specification
. a Vendor Infrastructure specification
During the period from May 1995 through December 31, 2000, the company has
submitted extensive comments to a series of proposed IBIP specifications issued
by the U.S.P.S. In March 2000, the U.S.P.S. issued the latest set of proposed
specifications, entitled "Performance Criteria for Information-Based Indicia and
Security Architecture for Open IBI Postage Evidencing Systems" (the IBI
Performance Criteria). The company has submitted comments to the IBI Performance
Criteria. In September and October 2000, the U.S.P.S. issued further proposed
regulations regarding postage evidencing systems using Information Based
Indicia, titled "Refunds and Exchanges" and "Production, Distribution and Use of
Postal Security Devices and Information-Based Indicia." The company has
submitted comments regarding those proposed regulations.
In March 2000, the company received approval from the U.S.P.S. for the
commercial launch of the Internet version of a product which satisfies the
proposed IBI Performance Criteria, ClickStamp(TM) Online.
In June 1999, the company was served with a Civil Investigative Demand (CID)
from the Justice Department's Antitrust Division. A CID is a tool used by the
Antitrust Division for gathering information and documents. The company believes
that the Justice Department may be reviewing the company's efforts to protect
its intellectual property rights. The company believes it has complied fully
with the antitrust laws and is cooperating fully with the department's
investigation.
5
Employee Relations. At December 31, 2000, 23,335 persons were employed by the
- ------------------
company in the U.S. and 5,207 outside the U.S. Employee relations are
considered to be satisfactory. The 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 operations.
Global Mailing. Global Mailing products are manufactured in a number of plants
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principally in Connecticut, as well as in Harlow, England. Most of these
facilities are owned by the company. At December 31, 2000, there were 134
sales, support services, and finance offices, substantially all of which are
leased, located throughout the U.S. and in a number of other countries.
Enterprise Solutions. The company's Document Messaging Technologies (DMT)
- ---------------------
business is headquartered in Danbury, Connecticut. DMT leases 5 facilities
located throughout the U.S. The company's management services subsidiary is
headquartered in Stamford, Connecticut and leases 36 facilities located
throughout the U.S., and a facility in Toronto, Ontario, Canada, and London,
England.
Executive and administrative offices of the financing operations (for both the
Global Mailing and Enterprise Solutions segments) within the U.S. are located in
Shelton, Connecticut. Offices of the financing operations outside the U.S. are
maintained in Mississauga, Ontario, Canada; London, England; Heppenheim,
Germany; Paris, France; Oslo, Norway; Dublin, Ireland; French's Forest,
Australia; Vienna, Austria; Effretikon, Switzerland; Milan, Italy; Barcelona,
Spain; and Stockholm, Sweden.
Capital Services. Pitney Bowes Credit Corporation (PBCC) leases an executive and
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administrative office in Shelton, Connecticut, which is owned by Pitney Bowes
Inc. 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 plaintiff or 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.
6
Executive Officers of the Registrant
- ------------------------------------
Executive
Officer
Name Age Title Since
- ----- --- ----- -----------
Michael J. Critelli 52 Chairman and Chief Executive Officer 1988
Marc C. Breslawsky 58 President and Chief Operating Officer 1985
Brian Baxendale 58 Executive Vice President and 2000
President, Pitney Bowes Document
Messaging Technologies
Gregory E. Buoncontri 53 Vice President and Chief Information 2000
Officer
Amy C. Corn 47 Vice President and Corporate Secretary 1996
Meredith B. Fischer 48 Vice President, Corporate Marketing 1996
and Chief Communications Officer
Karen M. Garrison 52 Executive Vice President and President, 1999
Pitney Bowes Business Services
Suzanne N. Grey 50 Vice President, Strategy Planning 1999
and New Business Development
Arlen F. Henock 44 Vice President - Finance 1996
Luis A. Jimenez 56 Vice President, Global Growth and 1999
Futures Strategy
Matthew S. Kissner 46 Executive Vice President and Group 1997
President, Pitney Bowes Small Business
and Financial Services
Murray D. Martin 53 Executive Vice President and Group 1998
President, Global Mailing Systems
John N. D. Moody 56 Executive Vice President - Office 1997
of the Chairman
Sara E. Moss 54 Vice President and General Counsel 1996
Bruce P. Nolop 50 Executive Vice President and 2000
Chief Financial Officer
Fred M. Purdue 54 Vice President and General Manager, 1999
Business Reengineering
Murray L. Reichenstein 63 Vice President, E-Business and Chief 1996
Development Officer
Kathleen E. Synnott 47 Vice President and General Manager, 1999
Customer Relationship Management
Johnna G. Torsone 50 Vice President and Chief 1993
Human Resources Officer
Joseph E. Wall 49 Vice President and Chief Technology 1996
Officer
7
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 G.E. Buoncontri, L.A. Jimenez, S.E.
Moss, B.P. Nolop, M.L. Reichenstein and J.E. Wall.
Mr. Buoncontri was formerly the Vice President, Information Technology and Chief
Information Officer of Novartis Pharmaceuticals Corp. (merger of Sandoz and Ciba
Geigy). Prior to the merger, he also served as the Vice President, Information
Systems and Chief Information Officer for Sandoz Pharmaceuticals Company. Mr.
Buoncontri also served as Vice President, Information Management Services and
Chief Information Officer of Asea Brown Boveri, Inc.
Mr. Jimenez joined the company from Arthur D. Little, an international
management consulting company, with over 25 years of experience. Mr. Jimenez was
appointed worldwide practice leader for postal organizations in 1990, Corporate
Vice President in 1991, and served most recently on the firm's global board for
telecommunications and media and as Manager of the Latin American practice.
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. Nolop joined the company from Wasserstein Perella & Co., an investment bank
and one of Pitney Bowes' financial advisors, where he had served as managing
director since 1993. Prior to joining Wasserstein Perella & Co., Mr. Nolop held
senior positions with Goldman Sachs & Co., Kimberly-Clark Corporation and Morgan
Stanley & Co.
Mr. Reichenstein, who was previously Vice President and Chief Financial Officer
of Pitney Bowes Inc. since 1996, joined the company with over 31 years of
experience with Ford Motor Company. During his time with Ford, Mr. Reichenstein
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 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.
8
PART II
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Item 5. Market for the Registrant's Common Stock and Related Stockholders'
------------------------------------------------------------------
Matters
- -------
The sections entitled "Stock Exchanges" and "Stock Information" on page 66 of
the Pitney Bowes Inc. 2000 Annual Report to Stockholders are incorporated herein
by reference. At December 31, 2000, the company had 32,231 common stockholders
of record.
Item 6. Selected Financial Data
-----------------------
The section entitled "Summary of Selected Financial Data" on page 43 of the
Pitney Bowes Inc. 2000 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 Financial
Condition and Results of Operations" on pages 33 to 42 of the Pitney Bowes Inc.
2000 Annual Report to Stockholders is incorporated herein by reference, except
for the section on page 42 relating to "Dividend Policy".
The section under "Legal, Environmental and Regulatory Matters" titled
"Regulation" on pages 40 and 41 of the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" 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 wants to caution readers that any forward-looking statements with
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 (those which talk about the company's or
management's current expectations as to the future and include, but are not
limited to, statements about possible restructuring charges and future guidance)
in this Form 10-K, other reports or press releases or made by the company's
management involve risks and uncertainties which may change based on various
important factors. Words such as "estimate", "project", "plan", "believe",
"expect", "anticipate", "intend", and similar expressions may identify such
forward-looking statements. 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
. mailers' utilization of alternative means of communication or competitors'
products
. our success at managing customer credit risk
. changes in interest rates
. foreign currency fluctuations
. terms and timing of the spin-off of Office Systems
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
----------------------------------------------------------
The section entitled "Market Risk" on page 40 of the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" of the Pitney
Bowes Inc. 2000 Annual Report to Stockholders is incorporated herein by
reference.
Item 8. Financial Statements and Supplementary Data
-------------------------------------------
The financial statements, together with the report thereon of
PricewaterhouseCoopers LLP dated January 22, 2001, appearing on pages 44 to 65
of the Pitney Bowes Inc. 2000 Annual Report to Stockholders are incorporated
herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
---------------------------------------------------------------
Financial Disclosure
--------------------
None.
9
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 7 of this Form 10-K), the
information called for by this Item is incorporated herein by reference to the
sections entitled "Election of Directors", "How much stock is owned by
directors, nominees and executive officers?" and "Security Ownership" on pages 7
to 9 and 4 to 5 of the Pitney Bowes Inc. Notice of the 2001 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 10 to 16, and 19 to 21 of the Pitney Bowes Inc. Notice of the
2001 Annual Meeting and Proxy Statement are incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The section entitled "How much stock is owned by directors, nominees and
executive officers?" and "Security Ownership" on pages 4 to 5 of the Pitney
Bowes Inc. Notice of the 2001 Annual Meeting and Proxy Statement is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
None.
10
PART IV
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Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------
(a) 1. Financial statements - see Item 8 on page 9 and "Index to Financial
Schedules" on page 18.
2. Financial statement schedules - see "Index to Financial Schedules"
on page 18.
3. Exhibits (numbered in accordance with Item 601 of Regulation S-K).
Reg. S-K
Exhibits Description Status or Incorporation by Reference
- -------- ------------------------- ----------------------------------------------
(3)(a) Restated Certificate of Incorporated by reference to Exhibit (3a) to
Incorporation, as amended Form 10-K as filed with the Commission on March
30, 1993. (Commission file number 1-3579)
(a.1) Certificate of Amendment to the Incorporated by reference to Exhibit (a.1) to
Restated Certificate of Form 10-K as filed with the Commission on March
Incorporation (as amended May 27, 1998. (Commission file number 1-3579)
29, 1996)
(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)
(c) By-laws, as amended Incorporated by reference to Exhibit (3)(ii) to
Form 10-Q as filed with the Commission on
November 16, 1998. (Commission file number
1-3579)
(4)(a) Form of Indenture dated as of Incorporated by reference to Exhibit (4a) to
November 15, 1987 between the Form 10-K as filed with the Commission on March
company and Chemical Bank, as 24, 1988. (Commission file number 1-3579)
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 Supplemental Incorporated by reference to Exhibit (1) to
Indenture dated as of June 1, Form 8-K as filed with the Commission on June
1989 between the company and 16, 1989. (Commission file number 1-3579)
Chemical Bank, as Trustee
(d) Form of Indenture dated as of Incorporated by reference to Exhibit (4.1) to
April 15, 1990 between the Registration Statement on Form S-3 (No.
company and Chemical Bank, as 33-33948) as filed with the Commission on March
successor to Manufacturers 28, 1990.
Hanover Trust Company, as Trustee
(e) Forms of Debt Securities Incorporated by reference to Exhibit (4) to
Form 10-Q as filed with the Commission on May
14, 1990. (Commission file number 1-3579)
11
(f) Form of Indenture dated as of Incorporated by reference to Exhibit (4a) to
May 1, 1985 between Pitney Bowes Registration Statement on Form S-3 (No.
Credit Corporation and Bankers 2-97411) as filed with the Commission on May 1,
Trust Company, as Trustee 1985.
(g) Letter Agreement between Pitney Incorporated by reference to Exhibit (4b) to
Bowes Inc. and Bankers Trust Registration Statement on Form S-3 (No.
Company, as Trustee 2-97411) as filed with the Commission on May 1,
1985.
(h) Form of First Supplemental Incorporated by reference to Exhibit (4b) to
Indenture dated as of December Registration Statement on Form S-3 (No.
1, 1986 between Pitney Bowes 33-10766) as filed with the Commission on
Credit Corporation and Bankers December 12, 1986.
Trust Company, as Trustee
(i) Form of Second Supplemental Incorporated by reference to Exhibit (4c) to
Indenture dated as of February Registration Statement on Form S-3 (No.
15, 1989 between Pitney Bowes 33-27244) as filed with the Commission on
Credit Corporation and Bankers February 24, 1989.
Trust Company, as Trustee
(j) Form of Third Supplemental Incorporated by reference to Exhibit (1) to
Indenture dated as of May 1, Form 8-K as filed with the Commission on May
1989 between Pitney Bowes Credit 16, 1989. (Commission file number 1-3579)
Corporation and Bankers Trust
Company, as Trustee
(k) Indenture dated as of November Incorporated by reference to Exhibit (4a) to
1, 1995 between the company and Amendment No. 1 to Registration Statement on
Chemical Bank, as Trustee Form S-3 (No. 33-62485) as filed with the
Commission on November 2, 1995.
(l) Preference Share Purchase Rights Incorporated by reference to Exhibit (4) to
Agreement dated December 11, Form 8-K as filed with the Commission on March
1995 between the company and 13, 1996. (Commission file number 1-3579)
Chemical Mellon Shareholder
Services, LLC., as Rights
Agent, as amended
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.
12
Executive Compensation Plans:
- ----------------------------
(10) (a) Retirement Plan for Directors Incorporated by reference to Exhibit (10a) to
of Pitney Bowes Inc. Form 10-K as filed with the Commission on March
30, 1993. (Commission file number 1-3579)
(b) Pitney Bowes Inc. Directors' Incorporated by reference to Exhibit (i) to
Stock Plan (as amended and Form 10-K as filed with the Commission on March
restated 1997) 31, 1997. (Commission file number 1-3579)
(b.1) Pitney Bowes Inc. Directors' Incorporated by reference to Exhibit (i) to Form
Stock Plan (as amended and 10-K as filed with the Commission on March 30,
restated 1999) 2000. (Commission file number 1-3579)
(c) Pitney Bowes 1991 Stock Plan Incorporated by reference to Exhibit (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 Incorporated by reference to Exhibit (ii) to
Bowes 1991 Stock Plan Form 10-K as filed with the Commission on March
31, 1997. (Commission file 1-3579)
(c.2) Second Amendment to Pitney Incorporated by reference to Exhibit (i) to
Bowes 1991 Stock Plan Form 10-Q as filed with the Commission on
November 13, 1997. (Commission file number
1-3579)
(c.3) Pitney Bowes 1991 Stock Plan (as Incorporated by reference to Exhibit (10) to
amended and restated) Form 10-Q as filed with the Commission on May
14, 1998. (Commission file number 1-3579)
(c.4) Pitney Bowes 1998 Stock Plan (as Incorporated by reference to Exhibit (ii) to
amended and restated ) Form 10-K as filed with the Commission on March
30, 2000. (Commission file number 1-3579)
(d) Pitney Bowes Inc. Key Employees' Incorporated by reference to Exhibit (10c) to
Incentive Plan (as amended and Form 10-K as filed with the Commission on March
restated) 25, 1992. (Commission file number 1-3579)
(d.1) First Amendment to Pitney Incorporated by reference to Exhibit (iii) to
Bowes Inc. Key Employees' Form 10-K as filed with the Commission on March
Incentive Plan (as amended and 31, 1997. (Commission file number 1-3579)
restated June 10, 1991)
(d.2) Second Amendment to Pitney Bowes Exhibit (i)
Inc. Key Employees' Incentive
Plan (as amended and restated)
(e) 1979 Pitney Bowes Stock Option Incorporated by reference to Exhibit (10d) to
Plan (as amended and restated) Form 10-K as filed with the Commission on March
25, 1992. (Commission file number 1-3579)
13
(f) Pitney Bowes Severance Plan, as Incorporated by reference to Exhibit (10) to
amended, dated December 12, 1988 Form 10-K as filed with the Commission on March
23, 1989. (Commission file number 1-3579)
(g) Pitney Bowes Executive Severance Incorporated by reference to Exhibit (10h) to
Policy, adopted December 11, Form 10-K as filed with the Commission on April
1995 1, 1996. (Commission file number 1-3579)
(h) Pitney Bowes Inc. Deferred Incorporated by reference to Exhibit (i) to
Incentive Savings Plan for the Form 10-Q as filed with the Commission on May
Board of Directors 15, 1997. (Commission file number 1-3579)
(h.1) Pitney Bowes Inc. Deferred Incorporated by reference to Exhibit (iii) to
Incentive Savings Plan for the Form 10-K as filed with the Commission on March
Board of Directors (as amended 30, 2000. (Commission file number 1-3579)
and restated 1999)
(i) Pitney Bowes Inc. Deferred Incorporated by reference to Exhibit (v) to
Incentive Savings Plan Form 10-K as filed with the Commission on March
31, 1997. (Commission file number 1-3579)
(j) Pitney Bowes U.K. Stock Option Incorporated by reference to Exhibit (iv) to
Plan (as amended and restated Form 10-K as filed with the Commission on March
1999) 30, 2000. (Commission file number 1-3579)
(k) Pitney Bowes Letter of Agreement Exhibit (vi)
with Marc C. Breslawsky dated
October 27, 2000
(l) Pitney Bowes Separation Exhibit (vii)
Agreement with Marc C.
Breslawsky dated October 27, 2000
(m) Pitney Bowes Separation Exhibit (viii)
Agreement with Marc C.
Breslawsky dated October 27, 2000
(12) Computation of ratio of earnings Exhibit (ii)
to fixed charges
(13) Portions of annual report to Exhibit (iii)
security holders
(21) Subsidiaries of the registrant Exhibit (iv)
(23) Consent of experts and counsel Exhibit (v)
14
(b) Reports on Form 8-K
On December 11, 2000, the company filed a current report on Form
8-K pursuant to Item 5 thereof, reporting the Press Release dated
December 11, 2000, regarding its announcement to spin off the
company's Office System business to stockholders.
On October 19, 2000, the company filed a current report on
Form 8-K pursuant to Item 5 thereof, reporting the Press Release
dated October 17, 2000, regarding its financial results for the
period ended September 30, 2000.
On October 5, 2000, the company filed a current report on Form
8-K pursuant to Item 5 thereof, reporting the Press Release dated
October 4, 2000 for the revised financial outlook for the periods
ended September 30, 2000 and December 31, 2000.
15
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 26, 2001
--------------
16
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 26, 2001
- ------------------------- --------------
Michael J. Critelli Executive Officer - Director
/s/ Marc C. Breslawsky President and Chief March 26, 2001
- ------------------------- --------------
Marc C. Breslawsky Operating Officer - Director
/s/ Bruce P. Nolop Executive Vice President and March 26, 2001
- ------------------------- --------------
Bruce P. Nolop Chief Financial Officer
(principal financial officer)
/s/ Arlen F. Henock Vice President - Finance March 26, 2001
- ------------------------- --------------
Arlen F. Henock (principal accounting
officer)
/s/ Linda G. Alvarado Director March 26, 2001
- ------------------------- --------------
Linda G. Alvarado
/s/ William E. Butler Director March 26, 2001
- ------------------------- --------------
William E. Butler
/s/ Colin G. Campbell Director March 26, 2001
- ------------------------- --------------
Colin G. Campbell
/s/ Jessica P. Einhorn Director March 26, 2001
- ------------------------- --------------
Jessica P. Einhorn
/s/ Ernie Green Director March 26, 2001
- ------------------------- --------------
Ernie Green
/s/ Herbert L. Henkel Director March 26, 2001
- ------------------------- --------------
Herbert L. Henkel
/s/ James H. Keyes Director March 26, 2001
- ------------------------- --------------
James H. Keyes
/s/ John S. McFarlane Director March 26, 2001
- ------------------------- --------------
John S. McFarlane
/s/ Michael I. Roth Director March 26, 2001
- ------------------------- --------------
Michael I. Roth
/s/ Phyllis S. Sewell Director March 26, 2001
- ------------------------- --------------
Phyllis S. Sewell
17
INDEX TO FINANCIAL SCHEDULES
----------------------------
The financial schedules should be read in conjunction with the financial
statements in the Pitney Bowes Inc. 2000 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 19
Financial statement schedule for the years 1998 - 2000:
Valuation and qualifying accounts and
reserves (Schedule II) 20
18
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 22, 2001 appearing on page 65 of the Pitney Bowes Inc. 2000 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 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.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Stamford, Connecticut
January 22, 2001
19
PITNEY BOWES INC.
SCHEDULE II - VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1998 TO 2000
(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
- -------------------------------
2000 $ 28,716 $ 9,337 $11,585 (2) $ 26,468
1999 $ 24,665 $ 8,668 $ 4,617 (2) $ 28,716
1998 $ 21,129 $ 9,872 $ 6,336 (2) $ 24,665
Allowance for credit losses on finance receivables
- --------------------------------------------------
2000 $104,721 $58,421 $65,791 (2) $ 97,351
1999 $130,775 $67,257 $93,311 (2) (3) $104,721
1998 $132,308 $73,142 $74,675 (2) (3) $130,775
Valuation allowance for deferred tax asset (1)
- ------------------------------------------
2000 $ 35,443 $ 372 $10,866 $ 24,949
1999 $ 39,872 $ 586 $ 5,015 $ 35,443
1998 $ 41,301 $ 2,189 $ 3,618 $ 39,872
(1) Included in balance sheet as a liability.
(2) Principally uncollectible accounts written off.
(3) Amounts include the write-off of finance receivables retained in connection
with the disposal of our small-ticket external leasing business against
previously established allowance for credit losses recorded at the time of
disposal of this business in 1998.
20