Pitney Bowes Announces Third Quarter 2013 Results

  Pitney Bowes Announces Third Quarter 2013 Results

Business Wire

STAMFORD, Conn. -- October 29, 2013

Pitney Bowes Inc. (NYSE:PBI) today reported financial results for the third
quarter 2013.

HIGHLIGHTS

Results for the quarter:

  *Revenue of $939 million, which is a decline of 1% versus the prior year

       *Digital Commerce Solutions revenue grew 9% on a reported basis and
         10% on a constant currency basis

  *Adjusted EPS from continuing operations of $0.49 per share
  *GAAP EPS from continuing operations of $0.38 per share; GAAP net loss of
    $0.03 per share
  *Free cash flow of $208 million for the quarter and $440 million
    year-to-date
  *GAAP cash from operations of $215 million for the quarter and $494 million
    year-to-date
  *Adjusted EBIT grew by 3.4% and EBIT margin improved by 0.8 % versus prior
    year
  *Established revised segment reporting
  *Company reaffirms revenue and cash flow guidance; updates GAAP EPS from
    continuing operations and Adjusted EPS guidance

Announcements:

  *Sale of North America Management Services business completed
  *Sale of Nordic furniture business completed
  *Company announced intent to redeem in November, $300 million of bonds
    scheduled to mature in 2014
  *Signed agreement to purchase joint-venture partner’s minority interest in
    Brazilian business
  *Signed agreement to sell World Headquarters building

“Our results reflect the aggressive actions we have taken, which are in line
with our long-term strategy to deliver greater value for shareholders and
clients,” said Marc Lautenbach, President and Chief Executive Officer. “We
experienced higher growth in our Digital Commerce Solutions segment and
continue to implement a phased roll-out of our new go-to-market model in North
America that will enhance the selling capabilities of our Mailing business. We
also exited a non-core furniture business in Norway, and will gain 100 percent
ownership in our Brazilian subsidiary operations. Improving margins across the
portfolio demonstrate our continued commitment to improving operational
efficiency. We continued to use a portion of the savings generated from our
reduced operating costs to invest in positioning our digital commerce
solutions for growth. We also recently announced an early debt retirement,
using the proceeds of the North America Management Services sale, to further
strengthen our balance sheet.”

THIRD QUARTER 2013 RESULTS

Revenue for the quarter, excluding discontinued operations of the Nordic
furniture business, was $939 million, which was a decline of 1% when compared
to the prior year. This was similar to second quarter results despite a very
strong second quarter comparison in Production Mail. Revenue for the quarter
grew 9% in the Digital Commerce Solutions segment, was slightly positive in
the Enterprise Business Solutions group and declined 4% in the Small and
Medium Business Solutions group.

Adjusted earnings per diluted share from continuing operations for the quarter
were $0.49 per share, which includes a $0.06 per share tax benefit primarily
associated with an affiliate reorganization.

Earnings per diluted share from continuing operations, on a Generally Accepted
Accounting Principles (GAAP) basis, were $0.38 per share, which includes a
non-cash asset impairment charge of $0.08 per share related to the signed
agreement to sell the Company’s headquarters building and a restructuring
charge of $0.03 per share. Including the net loss in discontinued operations
of $0.40 per share, primarily related to taxes on the sale of the North
America Management Services business, there was a net loss of $0.03 per share
on a GAAP basis.

                                                        
Earnings Per Diluted Share Reconciliation*    Q3 2013     Q3 2012
Adjusted EPS from continuing operations       $0.49      $0.44 
Restructuring and asset impairments           (0.11  )    -
GAAP EPS from continuing operations           $0.38      $0.44 
Loss from discontinued operations             (0.40  )    (0.06 )
GAAP EPS                                      ($0.03 )    $0.38 

* The sum of the earnings per share may not equal the totals above due to
rounding.

FREE CASH FLOW RESULTS

Free cash flow for the quarter was $208 million, while on a GAAP basis the
Company generated $215 million in cash from operations. Free cash flow on a
year-to-date basis was $440 million and the Company generated $494 million in
cash from operations on a GAAP basis. During the quarter, the Company used $38
million of cash for dividends and $14 million for restructuring payments.
Also, on October 2^nd, the Company announced its election to redeem in
November 2013, $300 million of bonds that were scheduled to mature in August
2014.

BUSINESS SEGMENT REPORTING

The Company revised its business segment reporting to reflect the clients
served in each market and the way it manages these segments for growth and
profitability. The reporting now includes: Small & Medium Business (SMB)
Solutions group; Enterprise Business Solutions group; and Digital Commerce
Solutions segment.

The Small and Medium Business (SMB) Solutions group offers mailing equipment,
financing, services and supplies for small and medium businesses to
efficiently create mail and evidence postage. This group includes the North
America Mailing and International Mailing segments. North America Mailing
includes the operations of U.S. and Canada Mailing. International Mailing
includes all other SMB operations around the world.

The Enterprise Business Solutions group provides mailing equipment and
services for large enterprise clients to process mail, including sortation
services to qualify large mail volumes for postal worksharing discounts. This
group includes the global Production Mail and Presort Services segments.

The Digital Commerce Solutions segment leverages digital and mobile channels
that make the Company’s clients’ customer-facing functions more effective.
This segment includes software, marketing services, Volly™ and ecommerce
solutions.

SMB Solutions Group

                                        
           3Q 2013         Y-O-Y Change    Change ex Currency
Revenue       $565 million       (4%)               (4%)
EBIT       $183 million    2%              
                                                    

Within the SMB Solutions Group:


North America Mailing
           3Q 2013         Y-O-Y Change    Change ex Currency
Revenue       $423 million       (6%)               (5%)
EBIT       $167 million    (1%)            
                                                    

During the quarter, North America Mailing equipment sales declined less than
1% versus the prior year, which was an improvement over prior quarter trends.
Recurring revenue streams declined at a lesser rate than the third quarter
last year, but at a slightly higher rate when compared to the second quarter
this year due to lower financing and investment income on postage loans and
deposits.

During the quarter, North America Mailing accelerated the implementation of a
new go-to-market model. This strategy is expected to enhance the client
experience and improve the sales process while reducing costs. EBIT margin
improved versus the prior year as a result of ongoing cost reduction
initiatives including the change in the go-to-market model.


International Mailing
           3Q 2013         Y-O-Y Change    Change ex Currency
Revenue       $142 million       1%                 1%
EBIT       $ 15 million    38%             
                                                    

International Mailing revenue benefited from growth in equipment sales,
supplies and support services in Europe, and increased meter placements in
India. Revenue in Europe grew 2 percent when compared to the prior year as the
end–markets in this region continued to experience stabilization in meter
population trends. EBIT margin improved versus the prior year as a result of
ongoing cost reduction initiatives.

Enterprise Solutions Group

                                        
           3Q 2013         Y-O-Y Change    Change ex Currency
Revenue       $222 million       0%                 1%
EBIT       $ 31 million    6%              
                                                    

Within the Enterprise Business Solutions Group:


Worldwide Production Mail
           3Q 2013         Y-O-Y Change    Change ex Currency
Revenue       $116 million       1%                 2%
EBIT       $ 11 million    5%              
                                                    

Production Mail revenue benefited from the installation of inserting equipment
in North America and a production printer installation in the Asia Pacific
region. Supplies revenue grew as a result of the increased base of production
print installations. Revenue growth was partially offset by lower support
services revenue. EBIT margin improved versus the prior year due to the growth
in revenue and gross margin.


Presort Services
           3Q 2013         Y-O-Y Change    Change ex Currency
Revenue       $105 million       (1%)               (1%)
EBIT       $ 20 million    6%              
                                                    

Presort Services revenue declined slightly compared to the prior year as a
result of lower direct mail volumes offsetting higher first class mail volume
related revenue. EBIT margin improved versus the prior year due to operating
expense reductions.

Digital Commerce Solutions

                                        
           3Q 2013         Y-O-Y Change    Change ex Currency
Revenue       $152 million       9%                 10%
EBIT       $ 10 million    243%            
                                                    

Digital Commerce Solutions benefited from a 5% increase in software revenue
and more than a 20% increase in business services revenue. The growth in
business services revenue was primarily driven by an increase in transactions
associated with the Company’s ecommerce solutions for cross-border package
delivery; however that revenue growth was partially offset by declines in
marketing services revenue. EBIT margin improved significantly due to a lower
cost structure, primarily in software solutions.

2013 GUIDANCE UPDATE

This guidance discusses future results which are inherently subject to
unforeseen risks and developments. As such, discussions about the business
outlook should be read in the context of an uncertain future, as well as the
risk factors identified in the safe harbor language at the end of this release
and as more fully outlined in the Company's 2012 Form 10-K Annual Report and
other reports filed with the Securities and Exchange Commission.

The Company is reaffirming its 2013 annual guidance as follows:

  *Revenue, excluding the impacts of currency, to be in the range of a 1
    percent decline to 2 percent growth when compared to 2012, and
  *Free cash flow to be in the range of $575 million to $675 million.

The Company is updating its 2013 annual earnings per share guidance to reflect
restructuring and asset impairment charges and tax benefits recorded in the
third quarter, as well as expected costs related to debt retirement in the
fourth quarter. The updated 2013 annual guidance follows:

  *Adjusted earnings per diluted share to be in the range of $1.68 to $1.83,
    which includes:

       *$0.06 per share tax benefit recorded in the quarter

  *GAAP earnings per diluted share from continuing operations to be in the
    range of $1.39 to $1.54, which includes:

       *$0.10 per share restructuring charges recorded to date;
       *$0.08 per share asset impairment charge related to the signed
         agreement to sell the Company’s headquarters building;
       *$0.08 per share charge for costs associated with the first quarter
         debt tender, and
       *$0.03 per share charge related to net costs associated with the
         planned early redemption of $300 million of debt in the fourth
         quarter.

This guidance excludes any additional restructuring actions that may occur as
the Company implements plans to further streamline its operations and reduce
costs.

Conference Call and Webcast

Management of Pitney Bowes will discuss the Company’s results in a broadcast
over the Internet today at 8:00 a.m. EDT. For more information on the Company
and instructions for listening to the earnings results, please visit the
Investor Relations page of the Company’s web site at www.pb.com.

The Company's financial results are reported in accordance with generally
accepted accounting principles (GAAP). The Company uses measures such as
adjusted earnings per share, adjusted income from continuing operations and
free cash flow to exclude the impact of special items like restructuring
charges, tax adjustments, and goodwill and asset write-downs, because, while
these are actual Company expenses, they can mask underlying trends associated
with our business. Such items are often inconsistent in amount and frequency
and as such, the adjustments allow an investor greater insight into the
current underlying operating trends of the business.

The use of free cash flow provides investors insight into the amount of cash
that management could have available for other discretionary uses. It adjusts
GAAP cash from operations for capital expenditures, as well as special items
like cash used for restructuring charges, unusual tax payments and
contributions to its pension funds. Management uses segment EBIT to measure
profitability and performance at the segment level. EBIT is determined by
deducting the related costs and expenses attributable to the segment. Segment
EBIT excludes interest, taxes, general corporate expenses not allocated to a
particular business segment, restructuring charges and goodwill and asset
impairments, which are recognized on a consolidated basis. In addition,
financial results are presented on a constant currency basis to exclude the
impact of changes in foreign currency exchange rates since the prior period
under comparison. Constant currency measures are intended to help investors
better understand the underlying operational performance of the business
excluding the impacts of shifts in currency exchange rates over the
intervening period.

Pitney Bowes has provided a quantitative reconciliation to GAAP in
supplemental schedules. This information may also be found at the Company's
web site www.pb.com/investorrelations.

This document contains “forward-looking statements” about our expected or
potential future business and financial performance. For us forward-looking
statements include, but are not limited to, statements about our future
revenue and earnings guidance and other statements about future events or
conditions. Forward-looking statements are not guarantees of future
performance and involve risks and uncertainties that could cause actual
results to differ materially from those projected. These risks and
uncertainties include, but are not limited to: mail volumes; the uncertain
economic environment; timely development, market acceptance and regulatory
approvals, if needed, of new products; fluctuations in customer demand;
changes in postal regulations; interrupted use of key information systems;
management of outsourcing arrangements; changes in business portfolio; foreign
currency exchange rates; changes in our credit ratings; management of credit
risk; changes in interest rates; the financial health of national posts; and
other factors beyond our control as more fully outlined in the Company's 2012
Form 10-K Annual Report and other reports filed with the Securities and
Exchange Commission. Pitney Bowes assumes no obligation to update any
forward-looking statements contained in this document as a result of new
information, events or developments.

Note: Consolidated statements of income; revenue and EBIT by business segment;
and reconciliation of GAAP to non-GAAP measures for the three and nine months
ended September 30, 2013 and 2012, and consolidated balance sheets at
September 30, 2013 and December 31, 2012 are attached.

                                                            
Pitney Bowes Inc.
Consolidated Statements of Income
(Unaudited)
                                                                     
(Dollars in thousands, except per share data)
                   Three months ended              Nine months ended September 30,
                   September 30,
                   2013            2012            2013              2012
Revenue:
Equipment          $ 201,830       $ 199,609       $ 634,779         $ 618,620
sales
Supplies             69,696          66,878          216,254           213,665
Software             98,164          93,476          285,658           302,377
Rentals              128,225         137,149         391,590           414,922
Financing            113,955         123,999         346,646           373,695
Support              166,785         176,769         505,226           529,615
services
Business            160,131       151,909       458,061         446,654   
services
                                                                     
Total revenue       938,786       949,789       2,838,214       2,899,548 
                                                                     
Costs and
expenses:
Cost of
equipment            92,307          95,008          307,992           278,457
sales
Cost of              21,840          20,689          67,794            65,423
supplies
Cost of              29,698          29,227          80,093            85,023
software
Cost of              25,612          25,182          79,791            87,258
rentals
Financing
interest             20,306          19,604          59,979            61,385
expense
Cost of
support              103,004         107,074         315,275           334,274
services
Cost of
business             112,447         103,230         322,970           298,689
services
Selling,
general and          355,202         370,935         1,067,394         1,111,144
administrative
Research and         24,769          30,226          81,351            87,810
development
Restructuring
charges and          34,909          -               53,940            (980      )
asset
impairments
Other interest       27,508          27,541          89,594            87,261
expense
Interest             (1,457  )       (2,057  )       (4,507    )       (5,793    )
income
Other expense,      -             -             25,121          1,138     
net
                                                                     
Total costs         846,145       826,659       2,546,787       2,491,089 
and expenses
                                                                     
Income from
continuing
operations           92,641          123,130         291,427           408,459
before income
taxes
                                                                     
Provision for       11,370        30,590        55,530          85,108    
income taxes
                                                                     
Income from
continuing           81,271          92,540          235,897           323,351
operations
                                                                     
(Loss) income
from
discontinued        (82,204 )      (11,413 )      (169,369  )      25,257    
operations,
net of tax
                                                                     
Net (loss)
income before
attribution of       (933    )       81,127          66,528            348,608
noncontrolling
interests
                                                                     
Less:
Preferred
stock
dividends of
subsidiaries
attributable
to
noncontrolling      4,594         4,594         13,782          13,782    
interests
                                                                     
Net (loss)
income -           $ (5,527  )     $ 76,533       $ 52,746         $ 334,826   
Pitney Bowes
Inc.
                                                                     
                                                                     
Amounts
attributable
to common
stockholders:
Income from
continuing         $ 76,677        $ 87,946        $ 222,115         $ 309,569
operations
(Loss) income
from                (82,204 )      (11,413 )      (169,369  )      25,257    
discontinued
operations
                                                                     
Net (loss)
income -           $ (5,527  )     $ 76,533       $ 52,746         $ 334,826   
Pitney Bowes
Inc.
                                                                     
Basic earnings
per share
attributable
to common
stockholders
^(1):
Continuing           0.38            0.44            1.10              1.55
operations
Discontinued        (0.41   )      (0.06   )      (0.84     )      0.13      
operations
                                                                     
Net (loss)
income -           $ (0.03   )     $ 0.38         $ 0.26           $ 1.67      
Pitney Bowes
Inc.
                                                                     
Diluted
earnings per
share
attributable
to common
stockholders
^(1):
Continuing           0.38            0.44            1.10              1.54
operations
Discontinued        (0.40   )      (0.06   )      (0.84     )      0.13      
operations
                                                                     
Net (loss)
income -           $ (0.03   )     $ 0.38         $ 0.26           $ 1.66      
Pitney Bowes
Inc.
                                                                     

^(1) The sum of the earnings per share amounts may not equal the totals above
due to rounding.

^(2) Certain prior year amounts have been reclassified to conform to the
current year presentation

                                                           
Pitney Bowes Inc.
Consolidated Balance Sheets
(Unaudited in thousands, except per share data)
                                                                
                                             September 30,      December 31,
Assets
                                             2013               2012
Current assets:
Cash and cash equivalents                    $ 759,636          $ 913,276
Short-term investments                         20,471             36,611
                                                                
Accounts receivable, gross                     433,265            748,469
Allowance for doubtful accounts               (15,230    )      (20,219    )
receivable
Accounts receivable, net                       418,035            728,250
                                                                
Finance receivables                            1,145,075          1,213,776
Allowance for credit losses                   (25,007    )      (25,484    )
Finance receivables, net                       1,120,068          1,188,292
                                                                
Inventories                                    134,266            179,678
Current income taxes                           28,419             51,836
Other current assets and prepayments           173,068            114,184
Assets held for sale                          550,641          -          
                                                                
Total current assets                           3,204,604          3,212,127
                                                                
Property, plant and equipment, net             240,609            385,377
Rental property and equipment, net             230,098            241,192
                                                                
Finance receivables                            958,517            1,041,099
Allowance for credit losses                   (11,489    )      (14,610    )
Finance receivables, net                       947,028            1,026,489
                                                                
Investment in leveraged leases                 34,858             34,546
Goodwill                                       1,729,178          2,136,138
Intangible assets, net                         128,588            166,214
Non-current income taxes                       96,714             94,434
Other assets                                  538,255          563,374    
                                                                
Total assets                                 $ 7,149,932       $ 7,859,891  
                                                                
Liabilities, noncontrolling interests
and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities     $ 1,501,189        $ 1,809,226
Current income taxes                           291,930            240,681
Notes payable and current portion of           299,570            375,000
long-term obligations
Advance billings                               418,231            452,130
Liabilities held for sale                     118,177          -          
                                                                
Total current liabilities                      2,629,097          2,877,037
                                                                
Deferred taxes on income                       19,192             69,222
Tax uncertainties and other income tax         157,102            145,881
liabilities
Long-term debt                                 3,351,020          3,642,375
Other non-current liabilities                 685,914          718,375    
                                                                
Total liabilities                             6,842,325        7,452,890  
                                                                
Noncontrolling interests (Preferred            296,370            296,370
stockholders' equity in subsidiaries)
                                                                
Stockholders' equity:
Cumulative preferred stock, $50 par            4                  4
value, 4% convertible
Cumulative preference stock, no par            608                648
value, $2.12 convertible
Common stock, $1 par value                     323,338            323,338
Additional paid-in-capital                     201,643            223,847
Retained Earnings                              4,646,593          4,744,802
Accumulated other comprehensive loss           (696,593   )       (681,213   )
Treasury Stock, at cost                       (4,464,356 )      (4,500,795 )
                                                                
Total Pitney Bowes Inc. stockholders'         11,237           110,631    
equity
                                                                
Total liabilities, noncontrolling            $ 7,149,932       $ 7,859,891  
interests and stockholders' equity
                                                                

                                                                 
Pitney Bowes Inc.
Revenue and EBIT
Business Segments
September 30, 2013
(Unaudited)
                                                                        
(Dollars in thousands)                  Three Months Ended September 30,
                                                                        %
                                        2013            2012            Change
Revenue
                                                                        
North America Mailing                   $ 422,821         447,920       (6  %)
International Mailing                    142,443       141,630      1   %
Small & Medium Business Solutions        565,264       589,550      (4  %)
                                                                        
Production Mail                           116,477         114,889       1   %
Presort Services                         105,093       105,909      (1  %)
Enterprise Business Solutions            221,570       220,798      0   %
                                                                        
Digital Commerce Solutions               151,952       139,441      9   %
                                                                        
Total revenue                           $ 938,786      $ 949,789      (1  %)
                                                                        
EBIT (1)
                                                                        
North America Mailing                   $ 167,433       $ 168,934       (1  %)
International Mailing                    15,456        11,206       38  %
Small & Medium Business Solutions        182,889       180,140      2   %
                                                                        
Production Mail                           10,620          10,125        5   %
Presort Services                         20,398        19,167       6   %
Enterprise Business Solutions            31,018        29,292       6   %
                                                                        
Digital Commerce Solutions               10,196        2,971        243 %
                                                                        
Total EBIT                              $ 224,103       $ 212,403       6   %
                                                                        
Unallocated amounts:
Interest, net (2)                         (46,357 )       (45,088 )
Corporate and other expenses              (50,196 )       (44,185 )
Restructuring and asset impairments      (34,909 )      -       
                                                                        
Income from continuing operations       $ 92,641       $ 123,130 
before income taxes
                                                                        

(1)  Earnings before interest and taxes (EBIT) excludes general corporate
      expenses and restructuring charges and asset impairments.
(2)   Interest, net includes financing interest expense, other interest
      expense and interest income.
      

                                                                 
Pitney Bowes Inc.
Revenue and EBIT
Business Segments
September 30, 2013
(Unaudited)
                                                                        
(Dollars in thousands)              Nine Months Ended September 30,
                                                                        %
                                   2013              2012              Change
Revenue
                                                                        
North America Mailing               $ 1,286,085         1,362,709       (6  %)
International Mailing                448,684         449,583        (0  %)
Small & Medium Business              1,734,769       1,812,292      (4  %)
Solutions
                                                                        
Production Mail                       360,352           337,582         7   %
Presort Services                     322,954         322,401        0   %
Enterprise Business Solutions        683,306         659,983        4   %
                                                                        
Digital Commerce Solutions           420,139         427,273        (2  %)
                                                                        
Total Revenue                       $ 2,838,214      $ 2,899,548      (2  %)
                                                                        
EBIT (1)
                                                                        
North America Mailing               $ 488,301         $ 514,975         (5  %)
International Mailing                52,967          51,670         3   %
Small & Medium Business              541,268         566,645        (4  %)
Solutions
                                                                        
Production Mail                       34,239            28,439          20  %
Presort Services                     65,132          82,728         (21 %)
Enterprise Business Solutions        99,371          111,167        (11 %)
                                                                        
Digital Commerce Solutions           20,134          23,674         (15 %)
                                                                        
Total EBIT                          $ 660,773         $ 701,486         (6  %)
                                                                        
Unallocated amounts:
Interest, net (2)                     (145,066  )       (142,853  )
Corporate and other expenses          (170,340  )       (151,154  )
Restructuring and asset              (53,940   )      980       
impairments
                                                                        
Income from continuing              $ 291,427        $ 408,459   
operations before income taxes
                                                                        

      Earnings before interest and taxes (EBIT) excludes general corporate
(1)  expenses and restructuring charges and asset impairments and other
      income, net.
(2)   Interest, net includes financing interest expense, other interest
      expense and interest income.
      

                                                           
Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted Results
(Unaudited)
                                                                    
(Dollars in
thousands,
except per
share data)
                                                                    
                   Three Months Ended              Nine Months Ended September
                   September 30,                   30,
                   2013            2012            2013             2012
                                                                    
GAAP income
from
continuing
operations
after income
taxes, as          $ 76,677        $ 87,946        $ 222,115        $ 309,569
reported
Restructuring
charges and          22,536          -               35,662           (1,150   )
asset
impairments
Sale of
leveraged            -               -               -                (12,886  )
lease assets
Extinguishment      -             -             15,325         -        
of debt
Income from
continuing
operations
after income
taxes, as          $ 99,213       $ 87,946       $ 273,102       $ 295,533  
adjusted
                                                                    
                                                                    
GAAP diluted
earnings per
share from
continuing
operations, as     $ 0.38          $ 0.44          $ 1.10           $ 1.54
reported
Restructuring
charges and          0.11            -               0.18             (0.01    )
asset
impairments
Sale of
leveraged            -               -               -                (0.06    )
lease
Extinguishment      -             -             0.08           -        
of debt
Diluted
earnings per
share from
continuing
operations, as     $ 0.49         $ 0.44         $ 1.35          $ 1.47     
adjusted
                                                                    
                                                                    
GAAP net cash
provided by
operating
activities,
as reported        $ 214,526       $ 64,796        $ 493,561        $ 404,628
Capital              (29,951 )       (39,065 )       (103,392 )       (127,816 )
expenditures
Restructuring        14,098          12,871          41,353           60,746
payments
Pension              -               -               -                95,000
contribution
Tax payments
on sale of           -               14,345          -                99,249
leveraged
lease assets
Reserve
account              9,227           (17,707 )       (16,962  )       (15,373  )
deposits
Extinguishment       -               -               25,121           -
of debt
                                                                 
Free cash
flow, as           $ 207,900      $ 35,240       $ 439,681       $ 516,434  
adjusted
                                                                    


Note: The sum of the earnings per share amounts may not equal the totals above
due to rounding.


                                                
Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted Results
(Unaudited)
                                                           
(Dollars in
thousands,
except per share
data)
                                                                   
                     Three Months Ended             Nine Months Ended
                     September 30,                  September 30,
                     2013           2012            2013           2012
                                                                   
GAAP income from
continuing
operations after
income taxes,
as reported          $  76,677      $  87,946       $  222,115     $ 309,569
Restructuring
charges and             22,536         -               35,662        (1,150  )
asset
impairments
Extinguishment          -              -               15,325        -
of debt
Sale of
leveraged lease      -             -              -            (12,886 )
assets
Income from
continuing
operations
after income
taxes, as               99,213         87,946          273,102       295,533
adjusted
Provision for
income taxes, as        23,743         30,590          83,605        101,981
adjusted
Preferred stock
dividends of
subsidiaries
attributable to
noncontrolling       4,594         4,594          13,782       13,782  
interests
Income from
continuing              127,550        123,130         370,489       411,296
operations, as
adjusted
Interest             46,357        45,088         145,066      142,853 
expense, net
Adjusted EBIT           173,907        168,218         515,555       554,149
Depreciation and     53,675        59,900         167,377      191,507 
amortization
Adjusted EBITDA    $  227,582     $  228,118      $  682,932     $ 745,656 
                                                                   

Contact:

Pitney Bowes Inc.
Editorial
Sheryl Y. Battles, 203-351-6808
VP, Corp. Communications
or
Financial
Charles F. McBride, 203-351-6349
VP, Investor Relations
or
Website – www.pitneybowes.com