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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, 1998
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 12, 1999 is
$17,320,985,156.
Number of shares of common stock, $1 par value, outstanding as of March 12, 1999
is 269,561,366.
DOCUMENTS INCORPORATED BY REFERENCE:
1. Only the following portions of the Pitney Bowes Inc. 1998 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 36 to 58.
(b) Management's Discussion and Analysis of Financial Condition and Results
of Operations and Summary of Selected Financial Data on pages 25 to 35,
excluding the information on page 34 relating to Dividend Policy.
(c) Stock Exchanges and Stock Information, on page 59.
2. Pitney Bowes Inc. Notice of the 1999 Annual Meeting and Proxy Statement
dated April 1, 1999, pages 4 to 7, 10 to 13 and 18 and portions of pages 3,
9, 14 and 17 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 in four reportable
segments: Mailing and Integrated Logistics, Office Solutions, Mortgage Servicing
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 54 to 56 of
the Pitney Bowes Inc. 1998 Annual Report to Stockholders and is incorporated
herein by reference.
Mailing and Integrated Logistics. Mailing and Integrated Logistics includes
- --------------------------------
revenues from the sale and financing of mailing equipment, related supplies and
services, and the rental of postage meters. 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, and paper handling and shipping equipment.
Office Solutions. Office Solutions includes revenues from the sale, financing,
- ----------------
rental and service of reprographic and facsimile equipment including related
supplies, and facilities management services which provides reprographic
business support, and other processing functions. 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 Mailing and Integrated Logistics and Office Solutions
segments) in the U.S., Canada, the United Kingdom, Germany, France, Norway,
Ireland, Australia, Austria, Switzerland and Sweden. Consolidated financial
services operations financed 38 percent of consolidated sales from continuing
operations in 1998, 36 percent in 1997, and 39 percent in 1996. Consolidated
financial services operations financed approximately 77 percent of leasable
sales in 1998, 1997 and 1996.
2
Mortgage Servicing. Mortgage Servicing provides billing, collecting and
- ------------------
processing services for major investors in residential first mortgages. Mortgage
Servicing is provided by Atlantic Mortgage & Investment Corporation (A.M.I.C.),
a wholly-owned subsidiary of Pitney Bowes Credit Corporation.
Capital Services. Capital Services provides large-ticket financing and fee-
- ----------------
based 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, locomotives, railcars, rail and bus facilities 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.
As part of the company's strategy to reduce the capital committed to asset-based
financing, while increasing fee-based income, the company sold its broker-
oriented small-ticket leasing business to General Electric Capital Corporation
(GECC), a subsidiary of General Electric Company on October 30, 1998. 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 $790 million at closing, which approximates the book value of the net
assets sold or otherwise disposed of and related transaction costs. The
transaction is subject to post-closing adjustments. Operating results of CPLC
have been reported separately as discontinued operations in the Consolidated
Statements of Income.
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
approximately 12 percent of revenue in 1998, 1997 and 1996.
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. 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
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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 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
3
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 $100.8 million, $89.5 million,
and $81.7 million in 1998, 1997 and 1996, 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 the company, 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
for the soil remediation program.
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 financial 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.
4
Regulatory Matters. In May 1996, the U.S.P.S. issued a proposed schedule for
- ------------------
the phaseout of mechanical meters in the U.S. Between May 1996 and March 1997,
the company worked with the U.S.P.S. to negotiate a revised mechanical meter
migration schedule. The final schedule agreed to with the U.S.P.S. is as
follows:
. As of June 1, 1996, new placements of mechanical meters would no longer be
permitted; replacements of mechanical meters previously licensed to customers
would be permitted prior to the applicable suspension date for that category
of mechanical meter.
. As of March 1, 1997, use of mechanical meters by persons or firms who process
mail for a fee would be suspended and would have to be removed from service.
. As of December 31, 1998, use of mechanical meters that interface with mail
machines or processors ("systems meters") would be suspended and would have
to be removed from service.
. As of March 1, 1999, use of all other mechanical meters ("stand-alone
meters") would be suspended and have to be removed from service.
As a result of the company's aggressive efforts to meet the U.S.P.S. mechanical
meter migration schedule combined with the company's ongoing and continuing
investment in advanced postage evidencing technologies, mechanical meters
represent less than 10% of the company's installed U.S. meter base at December
31, 1998, compared with 25% at December 31, 1997. At December 31, 1998, over
90% of the company's installed U.S. meter base was electronic or digital,
compared to 75% at December 31, 1997. 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 by the applicable U.S.P.S.
deadline.
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 significantly
enhanced postal revenue security and supported 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
5
In July 1996, the U.S.P.S. published for public comment draft specifications for
the Indicium, Postal Security Device and Host specifications. The company
submitted extensive comments to these four specifications. In March 1997, the
U.S.P.S. published for public comment the Vendor Infrastructure specification.
In August 1998, the U.S.P.S. published for public comment a consolidated and
revised set of IBIP specifications entitled "Performance Criteria for
Information Based Indicia and Security Architecture for IBI Postage Metering
Systems" (the IBI Performance Criteria). The IBI Performance Criteria
consolidated the four aforementioned IBIP specifications and incorporated many
of the comments previously submitted by the company. The company submitted
comments to the IBI Performance Criteria on November 30, 1998.
As of December 31, 1998, the company is in the process of finalizing the
development of a PC product which satisfies the proposed IBI Performance
Criteria. This product is currently undergoing beta testing and is expected to
be ready for market upon final approval from the U.S.P.S.
Employee Relations. At December 31, 1998, 26,792 persons were employed by the
- ------------------
company in the U.S. and 4,507 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.
Mailing and Integrated Logistics. Mailing and Integrated Logistics 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. At
December 31, 1998, there were 135 sales, support services, and finance offices,
substantially all of which are leased, located throughout the U.S. and in a
number of other countries.
Office Solutions. The company's copier and facsimile systems businesses are
- -----------------
both headquartered in Trumbull, Connecticut. The company's facilities management
subsidiary is headquartered in Stamford, Connecticut and leases 29 facilities
located throughout the U.S., as well as in Toronto, Ontario, Canada, and London,
England.
Executive and administrative offices of the financing operations (for both the
Mailing and Integrated Logistics and Office 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; and
Stockholm, Sweden.
Mortgage Servicing. The Atlantic Mortgage and Investment Corporation operates
- -------------------
in Jacksonville, Florida.
Capital Services. Pitney Bowes Credit Corporation leases an executive and
- ----------------
administrative office in Shelton, Connecticut, which is owned by Pitney Bowes
Inc. There are ten leased regional and district sales offices located throughout
the U.S.
6
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.
7
Executive Officers of the Registrant
- -------------------------------------------------------------------------------
Executive
Officer
Name Age Title Since
- ------------------------------------ --- ------------------------------------ -------
Michael J. Critelli 50 Chairman and Chief 1988
Executive Officer
Marc C. Breslawsky 56 President and Chief 1985
Operating Officer
Amy C. Corn 45 Corporate Secretary and Senior 1996
Associate General Counsel
Meredith B. Fischer 46 Vice President, Corporate Marketing 1996
and Chief Communications Officer
Arlen F. Henock 42 Vice President - Controller and 1996
Chief Tax Counsel
Matthew S. Kissner 44 President, Pitney Bowes 1997
Financial Services
Murray D. Martin 51 President, Pitney Bowes 1998
International
John N. D. Moody 54 President, U.S. Mailing Systems 1997
Sara E. Moss 52 Vice President and General Counsel 1996
Raymond S. Perry 60 Vice President and Chief Information 1998
Officer
Murray L. Reichenstein 61 Vice President and Chief 1996
Financial Officer
Douglas A. Riggs 54 Vice President and Chief Corporate 1988
Affairs Officer
Dennis M. Roney 56 President, Pitney Bowes 1998
Office Systems
Johnna G. Torsone 48 Vice President and Chief 1993
Personnel Officer
Joseph E. Wall 47 Vice President and Chief Technology 1996
Officer
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 M.S. Kissner, S.E. Moss, R.S. Perry,
M.L. Reichenstein and J.E. Wall.
8
Mr. Kissner, who was President, Pitney Bowes Credit Corporation since 1995,
joined the company from Bankers Trust Company where he had been Managing
Director since 1993. Mr. Kissner assumed his duties as President, Pitney Bowes
Financial Services effective June, 1997.
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. Perry joined the company from The University of Michigan Business School. He
was previously with Avon Products where he held the position of Vice President
and Chief Information Officer. Mr. Perry was with Avon since 1986, and prior to
that worked for Burroughs Corporation as Vice President, Management Systems and
Services. Mr. Perry has also held positions as Head of Information Systems
Auditing and Head of Information Systems for U.S. operations of Xerox
Corporation. Mr. Perry has been a visiting professor, Computer and Information
Systems since 1995, as well as a founding member and Director of the Information
Systems Executive Forum at the University of Michigan Business School.
Mr. Reichenstein 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.
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 59 of
the Pitney Bowes Inc. 1998 Annual Report to Stockholders are incorporated herein
by reference. At December 31, 1998, the company had 32,210 common stockholders
of record.
Item 6. Selected Financial Data
-----------------------
The section entitled "Summary of Selected Financial Data" on page 35 of the
Pitney Bowes Inc. 1998 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" on pages 25 to 34 of
the Pitney Bowes Inc. 1998 Annual Report to Stockholders is incorporated herein
by reference, except for the section on page 34 relating to "Dividend Policy".
The section under "Legal, Environmental and Regulatory Matters" titled
"Regulation" on page 33 of the "Management's Discussion and Analysis"
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.
9
The company wants to caution 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 competitors'
products
. the company's success at managing customer credit risk
. changes in interest rates
. the impact of the Year 2000 issue, including the effects of third parties'
inabilities to address the Year 2000 problem as well as the company's own
readiness
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
-----------------------------------------------------------
The section entitled "Market Risk" on pages 31 and 32 of the "Management's
Discussion and Analysis" 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 21, 1999, appearing on pages 36 to 58
of the Pitney Bowes Inc. 1998 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" , "How much stock is owned by
directors, nominees and executive officers?" and "Security Ownership" on pages 6
to 7 and 3 to 4 of the Pitney Bowes Inc. Notice of the 1999 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 9 to 14, and 17 to 18 of the Pitney Bowes Inc. Notice of the
1999 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 3 to 4 of the Pitney
Bowes Inc. Notice of the 1999 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 10 and "Index to Financial
Schedules" on page 17.
2. Financial statement schedules - see "Index to Financial Schedules"
on page 17.
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 of Incorporated by reference to Exhibit (3a) to Form 10-K as filed
Incorporation, as amended with the Commission on March 30, 1993. (Commission file number
1-3579)
(a.1) Certificate of Amendment to the Restated Incorporated by reference to Exhibit (a.1) to Form 10-K as filed
Certificate of Incorporation (as amended with the Commission on March 27, 1998. (Commission file number
May 29, 1996) 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)
(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 November 15, Incorporated by reference to Exhibit (4a) to Form 10-K as filed
1987 between the company and Chemical Bank, with the Commission on March 24, 1988. (Commission file number
as Trustee 1-3579)
(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 Indenture dated as Incorporated by reference to Exhibit (1) to Form 8-K as filed with
of June 1, 1989 between the company and the Commission on June 16, 1989. (Commission file number 1-3579)
Chemical Bank, as Trustee
(d) Form of Indenture dated as of April 15, 1990 Incorporated by reference to Exhibit (4.1) to Registration
between the company and Chemical Bank, as Statement on Form S-3 (No. 33-33948) as filed with the Commission
successor to Manufacturers Hanover Trust on March 28, 1990.
Company, as Trustee
11
Reg. S-K Status or Incorporation
Exhibits Description by Reference
- -------- --------------------------------------------- ---------------------------------------------------------------
(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)
(f) Form of Indenture dated as of May 1, 1985 Incorporated by reference to Exhibit (4a) to Registration
between Pitney Bowes Credit Corporation and Statement on Form S-3 (No. 2-97411) as filed with the Commission
Bankers Trust Company, as Trustee on May 1, 1985.
(g) Letter Agreement between Pitney Bowes Inc. Incorporated by reference to Exhibit (4b) to Registration
and Bankers Trust Company, as Trustee Statement on Form S-3 (No. 2-97411) as filed with the Commission
on May 1, 1985.
(h) Form of First Supplemental Indenture dated as Incorporated by reference to Exhibit (4b) to Registration
of December 1, 1986 between Pitney Bowes Statement on Form S-3 (No. 33-10766) as filed with the Commission
Credit Corporation and Bankers Trust on December 12, 1986.
Company, as Trustee
(i) Form of Second Supplemental Indenture dated Incorporated by reference to Exhibit (4c) to Registration
as of February 15, 1989 between Pitney Bowes Statement on Form S-3 (No. 33-27244) as filed with the Commission
Credit Corporation and Bankers Trust Company, on February 24, 1989.
as Trustee
(j) Form of Third Supplemental Indenture dated as Incorporated by reference to Exhibit (1) to Form 8-K as filed with
of May 1, 1989 between Pitney Bowes Credit the Commission on May 16, 1989. (Commission file number 1-3579)
Corporation and Bankers Trust Company, as
Trustee
(k) Indenture dated as of November 1, 1995 Incorporated by reference to Exhibit (4a) to Amendment No. 1 to
between the company and Chemical Bank, as Registration Statement on Form S-3 (No. 33-62485) as filed with
Trustee the Commission on November 2, 1995.
(l) Preference Share Purchase Rights Agreement Incorporated by reference to Exhibit (4) to Form 8-K as filed with
dated December 11, 1995 between the company the Commission on March 13, 1996. (Commission file number 1-3579)
and Chemical Mellon Shareholder Services,
LLC., as Rights Agent, as amended
12
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 Directors of Pitney Incorporated by reference to Exhibit (10a) to Form 10-K as filed
Bowes Inc. with the Commission on March 30, 1993. (Commission file number
1-3579)
(b) Pitney Bowes Inc. Directors' Stock Plan Incorporated by reference to Exhibit (i) to Form 10-K as filed
(as amended and restated 1997) with the Commission on March 31, 1997. (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 Bowes 1991 Stock Incorporated by reference to Exhibit (ii) to Form 10-K as filed
Plan with the Commission on March 31, 1997. (Commission file 1-3579)
(c.2) Second Amendment to Pitney Bowes 1991 Stock Incorporated by reference to Exhibit (i) to Form 10-Q as filed
Plan 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 Form 10-Q as filed
amended and restated) with the Commission on May 14, 1998. (Commission file number
1-3579)
(d) Pitney Bowes Inc. Key Employees' Incentive Incorporated by reference to Exhibit (10c) to Form 10-K as filed
Plan (as amended and restated) with the Commission on March 25, 1992. (Commission file number
1-3579)
(d.1) First Amendment to Pitney Bowes Inc. Key Incorporated by reference to Exhibit (iii) to Form 10-K as filed
Employees' Incentive Plan (as amended and with the Commission on March 31, 1997. (Commission file number
restated June 10, 1991) 1-3579)
(e) 1979 Pitney Bowes Stock Option Plan (as Incorporated by reference to Exhibit (10d) to Form 10-K as filed
amended and restated) with the Commission on March 25, 1992. (Commission file number
1-3579)
13
(f) Pitney Bowes Severance Plan, as amended, Incorporated by reference to Exhibit (10) to Form 10-K as filed
dated December 12, 1988 with the Commission on March 23, 1989. (Commission file number
1-3579)
(g) Pitney Bowes Executive Severance Policy, Incorporated by reference to Exhibit (10h) to Form 10-K as filed
adopted December 11, 1995 with the Commission on April 1, 1996. (Commission file number
1-3579)
(h) Pitney Bowes Inc. Deferred Incentive Sav- Incorporated by reference to Exhibit (i) to Form 10-Q as filed
ings Plan for the Board of Directors with the Commission on May 15, 1997. (Commission file number
1-3579)
(i) Pitney Bowes Inc. Deferred Incentive Incorporated by reference to Exhibit (v) to Form 10-K as filed
Savings Plan with the Commission on March 31, 1997. (Commission file number
1-3579)
(12) Computation of ratio of earnings to fixed Exhibit (i)
charges
(13) Portions of annual report to security Exhibit (ii)
holders
(21) Subsidiaries of the registrant Exhibit (iii)
(23) Consent of experts and counsel Exhibit (iv)
(27) Financial Data Schedule Exhibit (v)
(b) On February 26, 1999, the company filed a current report on
Form 8-K pursuant to Item 5 thereof, reporting the Press
Release dated January 28, 1999 and selected segment data.
On November 19, 1998, the company and PBCC filed a current
report on Form 8-K pursuant to Item 7 thereof, reporting the
content of the Stock Purchase Agreement for the operations
of CPLC.
On November 16, 1998, the company and PBCC filed a current
report on Form 8-K pursuant to Items 2 and 7 thereof,
reporting the sale of the operations of CPLC on October 30,
1998.
On October 19, 1998, PBCC filed a current report on Form 8-K
relating to the definitive agreement entered into with
General Electric Capital Corporation (GECC), a subsidiary of
General Electric Company, to sell its broker-oriented
external financing business, Colonial Pacific Leasing
Corporation (CPLC). In this transaction, the operations,
employees and substantially all assets related to CPLC will
be transferred to GECC.
14
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 30, 1999
----------------
15
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 30, 1999
- ---------------------------- Executive Officer - Director --------------
Michael J. Critelli
/s/ Marc C. Breslawsky President and Chief March 30, 1999
- ---------------------------- Operating Officer - Director --------------
Marc C. Breslawsky
/s/ Murray L. Reichenstein Vice President and Chief March 30, 1999
- ---------------------------- Financial Officer (principal --------------
Murray L. Reichenstein financial officer)
/s/ Arlen F. Henock Vice President - Controller March 30, 1999
- ---------------------------- and Chief Tax Counsel --------------
Arlen F. Henock (principal accounting
officer)
/s/ Linda G. Alvarado Director March 30, 1999
- ---------------------------- --------------
Linda G. Alvarado
/s/ William E. Butler Director March 30, 1999
- ---------------------------- --------------
William E. Butler
/s/ Colin G. Campbell Director March 30, 1999
- ---------------------------- --------------
Colin G. Campbell
/s/ Ernie Green Director March 30, 1999
- ---------------------------- --------------
Ernie Green
/s/ Charles E. Hugel Director March 30, 1999
- ---------------------------- --------------
Charles E. Hugel
/s/ James H. Keyes Director March 30, 1999
- ---------------------------- --------------
James H. Keyes
/s/ Michael I. Roth Director March 30, 1999
- ---------------------------- --------------
Michael I. Roth
/s/ Phyllis S. Sewell Director March 30, 1999
- ---------------------------- --------------
Phyllis S. Sewell
16
INDEX TO FINANCIAL SCHEDULES
----------------------------
The financial schedules should be read in conjunction with the financial
statements in the Pitney Bowes Inc. 1998 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 18
Financial statement schedule for the years 1996 - 1998:
Valuation and qualifying accounts and
reserves (Schedule II) 19
17
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 21, 1999 appearing on page 58 of the Pitney Bowes Inc. 1998
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.
PricewaterhouseCoopers LLP
Stamford, Connecticut
January 21, 1999
18
PITNEY BOWES INC.
SCHEDULE II - VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1996 TO 1998
(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
- -------------------------------
1998 $21,129 $9,872 $6,336 (1) $24,665
1997 $16,160 $9,269 $4,300 (1) $21,129
1996 $13,050 $9,894 $6,784 (1) $16,160
Allowance for credit losses on finance receivables
- --------------------------------------------------
1998 $132,308 $73,142 $74,675 (1) $130,775
1997 $113,737 $85,628 $67,057 (1) $132,308
1996 $113,506 $74,785 $74,554 (1) $113,737
Valuation allowance for mortgage servicing rights impairment
- ------------------------------------------------------------
1998 $ -- $12,102 $ 1,875 $ 10,227
1997 $ -- $ -- $ -- $ --
1996 $ -- $ -- $ -- $ --
Valuation allowance for deferred tax asset (2)
- ------------------------------------------
1998 $41,301 $22,221 $2,565 $60,957
1997 $46,601 $ 1,233 $6,533 $41,301
1996 $48,693 $ 3,066 $5,158 $46,601
(1) Principally uncollectible accounts written off.
(2) Included in balance sheet as a liability.
19