UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 F O R M 1 0 - Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 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 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_____ Number of shares of common stock, $2 par value, outstanding as of June 30, 1996 is 149,118,964.
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 2 Pitney Bowes Inc. Index Page Number Part I - Financial Information: Consolidated Statement of Income - Three and Six Months Ended June 30, 1996 and 1995 3 Consolidated Balance Sheet - June 30, 1996 and December 31, 1995 4 Consolidated Statement of Cash Flows - Six Months Ended June 30, 1996 and 1995 5 Notes to Consolidated Financial Statements 6 - 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 - 13 Part II - Other Information: Item 1: Legal Proceedings 14 Item 4: Submission of Matters to a Vote of Security Holders 14 - 15 Item 6: Exhibits and Reports on Form 8-K 16 Signatures 17
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 3 Part I - Financial Information Pitney Bowes Inc. Consolidated Statement of Income (Unaudited) <TABLE> (Dollars in thousands, except per share data) <CAPTION> Three Months Ended June 30, Six Months Ended June 30, 1996 1995 1996 1995 <S> <C> <C> <C> <C> Revenue from: Sales $ 410,649 $ 371,405 $ 794,653 $ 734,801 Rentals and financing 415,266 381,939 824,344 751,878 Support services 117,022 109,259 230,205 214,836 Total revenue 942,937 862,603 1,849,202 1,701,515 Costs and expenses: Cost of sales 258,039 233,551 496,803 446,277 Cost of rentals and financing 114,575 106,591 240,327 212,802 Selling, service and administrative 320,091 287,327 631,107 577,892 Research and development 20,637 21,643 39,347 41,982 Interest, net 47,399 59,876 95,983 118,961 Total costs and expenses 760,741 708,988 1,503,567 1,397,914 Income from continuing operations before income taxes 182,196 153,615 345,635 303,601 Provision for income taxes 63,663 55,266 120,593 109,263 Income from continuing operations 118,533 98,349 225,042 194,338 Discontinued operations - 10,675 - 20,997 Net income $ 118,533 $ 109,024 $ 225,042 $ 215,335 Income per common and common equivalent share: Income from continuing operations $ .79 $ .65 $ 1.49 $ 1.28 Discontinued operations - .07 - .14 Net income $ .79 $ .72 $ 1.49 $ 1.42 Average common and common equivalent shares outstanding 150,945,114 152,253,551 151,171,536 152,172,775 Dividends declared per share of common stock $ .345 $ .30 $ .69 $ .60 Ratio of earnings to fixed charges 3.89 3.12 3.73 3.11 </TABLE>
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 4 Pitney Bowes Inc. Consolidated Balance Sheet (Unaudited) <TABLE> June 30, December 31, (Dollars in thousands) 1996 1995 <CAPTION> <S> <C> <C> Assets Current assets: Cash and cash equivalents $ 92,787 $ 85,352 Short-term investments, at cost which approximates market 996 3,201 Accounts receivable, less allowances: 6/96, $13,880; 12/95, $13,050 356,750 386,727 Finance receivables, less allowances: 6/96, $38,155; 12/95, $37,699 1,346,815 1,208,532 Inventories (Note 2) 289,310 311,271 Other current assets and prepayments 104,269 106,014 Total current assets 2,190,927 2,101,097 Property, plant and equipment, net (Note 3) 494,218 495,001 Rental equipment and related inventories, net (Note 3) 789,665 773,337 Property leased under capital leases, net (Note 3) 7,815 7,876 Long-term finance receivables, less allowances: 6/96, $70,830; 12/95, $75,807 3,289,823 3,390,597 Investment in leveraged leases 589,966 570,008 Goodwill, net of amortization: 6/96, $33,646; 12/95, $30,504 211,840 208,698 Other assets 314,204 298,034 Total assets $7,888,458 $7,844,648 Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued liabilities $ 741,690 $ 818,122 Income taxes payable 236,440 232,794 Notes payable and current portion of long-term obligations 2,390,441 2,138,065 Advance billings 325,509 312,595 Total current liabilities 3,694,080 3,501,576 Deferred taxes on income 654,741 612,811 Long-term debt 801,455 1,048,515 Other noncurrent liabilities 399,670 410,646 Total liabilities 5,549,946 5,573,548 Preferred stockholders' equity in a subsidiary company 200,000 200,000 Stockholders' equity: Cumulative preferred stock, $50 par value, 4% convertible 47 47 Cumulative preference stock, no par value, $2.12 convertible 2,457 2,547 Common stock, $2 par value 323,338 323,338 Capital in excess of par value 26,908 30,299 Retained earnings 2,308,528 2,186,996 Cumulative translation adjustments (49,397) (46,991) Treasury stock, at cost (473,369) (425,136) Total stockholders' equity 2,138,512 2,071,100 Total liabilities and stockholders' equity $7,888,458 $7,844,648 </TABLE>
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 5 Pitney Bowes Inc. Consolidated Statement of Cash Flows (Unaudited) <TABLE> (Dollars in thousands) Six Months Ended June 30, <CAPTION> 1996 1995(*) <S> <C> <C> Cash flows from operating activities: Net income $ 225,042 $ 215,335 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 135,337 129,492 Net change in the strategic focus initiative (9,871) (20,481) Increase in deferred taxes on income 41,748 29,546 Change in assets and liabilities: Accounts receivable 29,588 12,575 Sales-type lease receivables (23,534) (32,047) Inventories 21,449 (19,853) Other current assets and prepayments 3,487 5,002 Accounts payable and accrued liabilities (66,059) (117,748) Income taxes payable 3,548 30,552 Advance billings 13,336 10,397 Other, net (44,401) (35,155) Net cash provided by operating activities 329,670 207,615 Cash flows from investing activities: Short-term investments 2,161 (746) Net investment in fixed assets (134,749) (158,870) Net investment in direct-finance lease receivables (13,163) (140,168) Investment in leveraged leases (22,391) (29,616) Proceeds from sale of subsidiary - 127,000 Net cash used in investing activities (168,142) (202,400) Cash flows from financing activities: Increase (decrease) in notes payable 12,117 (308,402) Proceeds from long-term obligations - 275,000 Principal payments on long-term obligations (8,114) (24,322) Proceeds from issuance of stock 21,251 19,128 Stock repurchases (75,339) (14,932) Proceeds from preferred stock issued by a subsidiary - 200,000 Dividends paid (103,510) (90,748) Net cash (used in) provided by financing activities (153,595) 55,724 Effect of exchange rate changes on cash (498) 760 Increase in cash and cash equivalents 7,435 61,699 Cash and cash equivalents at beginning of period 85,352 75,106 Cash and cash equivalents at end of period $ 92,787 $ 136,805 Interest paid $ 103,700 $ 130,437 Income taxes paid $ 77,075 $ 60,976 </TABLE> [FN] (*) Certain prior year amounts have been reclassified to conform with the 1996 presentation.
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 6 Pitney Bowes Inc. Notes to Consolidated Financial Statements Note 1: The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of Pitney Bowes Inc. ("the company"), all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of the company as of June 30, 1996 and the results of its operations and cash flows for the six months ended June 30, 1996 and 1995 have been included. Operating results for the six months ended June 30, 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. These statements should be read in conjunction with the financial statements and notes thereto included in the company's Annual Report to Stockholders and Form 10-K Annual Report for the year ended December 31, 1995. Note 2: <TABLE> Inventories are comprised of the following: <CAPTION> (Dollars in thousands) June 30, December 31, 1996 1995 <S> <C> <C> Raw materials and work in process $ 64,892 $ 57,203 Supplies and service parts 90,560 87,863 Finished products 133,858 166,205 Total $289,310 $311,271 </TABLE> Note 3: <TABLE> Fixed assets are comprised of the following: <CAPTION> (Dollars in thousands) June 30, December 31, 1996 1995 <S> <C> <C> Property, plant and equipment $1,086,105 $1,072,229 Accumulated depreciation (591,887) (577,228) Property, plant and equipment, net $ 494,218 $ 495,001 Rental equipment and related inventories $1,638,478 $1,591,321 Accumulated depreciation (848,813) (817,984) Rental equipment and related inventories, net $ 789,665 $ 773,337 Property leased under capital leases $ 26,143 $ 25,468 Accumulated amortization (18,328) (17,592) Property leased under capital leases, net $ 7,815 $ 7,876 </TABLE>
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 7 Note 4: The company adopted Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" on January 1, 1996. The company periodically reviews the fair value of long-lived assets the result of which has had no material affect on the company's reported results. The company adopted Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage Servicing Rights" (FAS 122) on January 1, 1996. FAS 122 requires that capitalized mortgage servicing rights be assessed periodically for impairment based on the fair value of those rights. Based on an evaluation performed as of June 30, 1996, no impairment was recognized in the company's mortgage servicing rights portfolio. The company also adopted Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (FAS 123), on January 1, 1996. Under FAS 123, companies can elect, but are not required, to recognize compensation expense for all stock-based awards, using a fair value methodology. The company has adopted the disclosure only provisions, as permitted by FAS 123. These disclosures will be included in the company's 1996 annual report to stockholders.
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 8 Pitney Bowes Inc. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Continuing Operations - second quarter of 1996 vs. second quarter of 1995. Revenue increased nine percent to $942.9 million in 1996 compared to $862.6 million in the second quarter of 1995. Income from continuing operations increased 21 percent to $118.5 million in 1996 from $98.3 million in the second quarter of 1995. Sales revenue increased 11 percent in 1996, essentially all of which was the result of volume growth. The facilities management business recorded a 19 percent increase in sales as it continued to expand its contract base, especially in the commercial market. In addition, sales revenue was enhanced by strong sales of production mail systems as well as significant growth in the international mailing business. Rentals and financing revenue increased nine percent from the prior year. Rental revenue growth reflected a greater number of higher yielding Postage By Phone(R) meters on rental. Second quarter 1996 was also favorably affected by the placement of a higher number of plain paper facsimile systems in service and by price increases. The increase in financing revenue was principally due to a higher base of small-ticket equipment under lease, an increased contribution from non- interest sensitive revenue sources, and the sale of the Custom Vendor Finance (CVF) operations of Pitney Bowes Credit Corporation in May 1996. Support services revenue rose seven percent from the prior year. The revenue growth was attributable to volume increases primarily at production mail and the acquisition in 1995 of a former Japanese joint venture. The ratio of cost of sales to sales revenue decreased to 62.8 percent in the second quarter of 1996 from 62.9 percent in the second quarter of 1995. The improvement in this ratio reflects higher price realization from domestic mailing equipment sales as well as lower copier equipment costs related to a weaker yen. This improvement in the ratio is partially offset by the growth of the company's facilities management business, which includes most of its expenses in cost of sales. The ratio of cost of rentals and financing to rentals and financing revenue decreased to 27.6 percent in 1996 from 27.9 percent in 1995, primarily as a result of the CVF sale mentioned above.
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 9 Selling, service and administrative expenses were 33.9 percent of revenue in the second quarter of 1996 compared to 33.3 percent in the second quarter of 1995. The increase in this ratio was due to higher expenses related to direct marketing, the inclusion of a dividend payment on preferred stock of a subsidiary company and strategic expenditures which are expected to have a favorable impact on future revenue and costs and expenses. Research and development expenses decreased five percent to $20.6 million in the second quarter of 1996 from $21.6 million in the second quarter of 1995. This decrease reflected higher 1995 expenditures for new products approaching the end of their development cycle. In addition, the company has maintained its cost containment programs while continuing to significantly invest in cost effective, advanced product development with emphasis on electronic and digital technology and software development. Net interest expense decreased to $47.4 million in the second quarter of 1996 from $59.9 million in 1995. This decrease was due to lower interest rates, lower average borrowing levels in 1996 reflecting the impact of the cash generated by the sales of Dictaphone Corporation (Dictaphone) and Monarch Marking Systems, Inc. (Monarch) in the latter half of 1995 and the issuance of preferred stock in a subsidiary of the company to outside institutional investors. The consolidated statement of income reflects these preferred stock dividends as a minority interest in "selling, service, and administrative" expense. The second quarter effective tax rate was 34.9 percent in 1996 compared to 36.0 percent in 1995. The improvement in the 1996 effective rate was primarily due to tax benefits attributable to foreign operations. Results of Continuing Operations - six months of 1996 vs. six months of 1995. For the first six months of 1996 compared with the same period of 1995, revenue increased nine percent while income from continuing operations increased 16 percent to $225.0 million. The factors that affected revenue and earnings performance included those cited for the second quarter of 1996 versus 1995. In addition, first quarter 1995 revenue included approximately $30 million in PROM (memory chip) sales attributable to the January 1, 1995 United States postal rate change. Nonrecurring Item As of June 30, 1996, the company has made severance and benefit payments of approximately $58.3 million to 1,500 employees separated under the strategic focus initiatives commenced in 1994. Approximately 400 employees with the requisite enhanced skills have been hired to manufacture and service advanced product offerings. The company has substantially completed its actions contemplated under the strategic initiatives.
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 10 Accounting Changes The company adopted Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long- Lived Assets to Be Disposed Of" on January 1, 1996. The company periodically reviews the fair value of long-lived assets the results of which have had no material affect on the company's reported results. The company adopted Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage Servicing Rights" (FAS 122) on January 1, 1996. FAS 122 requires that capitalized mortgage servicing rights be assessed periodically for impairment based on the fair value of those rights. Based on an evaluation performed as of June 30, 1996, no impairment was recognized in the company's mortgage servicing rights portfolio. The company also adopted Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (FAS 123), on January 1, 1996. Under FAS 123, companies can, but are not required to, elect to recognize compensation expense for all stock-based awards, using a fair value methodology. The company has adopted the disclosure only provisions, as permitted by FAS 123. These disclosures will be included in the company's 1996 annual report. Liquidity and Capital Resources The current ratio remained essentially unchanged at June 30, 1996 and December 31, 1995 at .59 to 1 and .60 to 1, respectively. Working capital has decreased since year-end 1995 primarily due to the reclassification of $200 million of notes due in February 1997 to current portion of long term debt. As part of the company's non-financial services shelf registrations, a medium-term note facility exists permitting issuance of up to $100 million in debt securities with maturities ranging from more than one year up to 30 years of which $32 million remain available at June 30, 1996. The company also has an additional $300 million remaining on its non-financial services shelf registrations filed with the Securities and Exchange Commission (SEC). Amounts available under credit agreements, shelf registrations and commercial paper and medium-term note programs, in addition to cash generated internally and by the sales of Monarch and Dictaphone, are expected to be sufficient to provide for financing needs in the next several years. In July 1996, Pitney Bowes Credit Corporation (PBCC) issued $200 million of medium-term notes due in July, 1999 and $100 million of medium-term notes due in July, 2001 with coupon rates of 6.54 percent and 6.78 percent, respectively.
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 11 Subsequent to the July 1996 issuance, PBCC has $450 million of unissued debt securities available from a shelf registration statement filed with the SEC in September 1995. Up to $200 million of medium-term notes may be offered under this registration statement. The $450 million available under this shelf registration statement should meet PBCC's financing needs for the next two years. PBCC also had unused lines of credit and revolving credit facilities totaling $1.7 billion at June 30, 1996, largely supporting its commercial paper borrowings. The ratio of total debt to total debt and stockholders' equity including the preferred stockholders' equity in a subsidiary company in total debt, was 61.4% at June 30, 1996 compared to 62.2% at December 31, 1995. This ratio was favorably affected by the proceeds from the sales of Dictaphone and Monarch which were used primarily to repay short-term debt, partially offset by the repurchase of approximately 1,556,000 shares of common stock for $75.3 million in the first half of 1996. Book value per common share increased to $14.32 at June 30, 1996 from $13.79 at year-end 1995 principally due to year-to-date income offset by the repurchase of common shares as noted above. The company enters into interest rate swap agreements principally through its financial services businesses. It has been the practice and objective of the company to use a balanced mix of debt maturities, variable- and fixed-rate debt and interest rate swap agreements to control the company's sensitivity to interest rate volatility. The company utilizes interest rate swap agreements when it considers the economic benefits to be favorable. Swap agreements, as noted above, have been principally utilized to fix interest rates on commercial paper and/or obtain a lower cost on debt than would otherwise be available absent the swap. Capital Investments In the first half of 1996, net investments in fixed assets included $40.8 million in net additions to property, plant and equipment and $93.5 million in net additions to rental equipment and related inventories compared with $61.4 million and $94.8 million during the same period in 1995, respectively. The decrease in net additions to property, plant and equipment was due to the completion of a new facility in 1995. In the case of rental equipment, the additions included the production of postage meters and purchase of facsimile and copier equipment for both new placements and upgrade programs. At June 30, 1996, commitments for the acquisition of property, plant and equipment included plant and manufacturing equipment improvements, as well as rental equipment for new and replacement programs.
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 12 Legal and Regulatory Matters The company has been advised by the Antitrust Division of the U.S. Department of Justice that its civil investigation of Pitney Bowes' postage equipment business has been closed. The investigation was concluded without any findings that Pitney Bowes violated the surviving provisions of the 1959 consent decree between the company and the U.S. Department of Justice, and/or the antitrust laws. In June, 1995, the United States Postal Service (U.S.P.S.) issued final revised regulations addressing the manufacture, distribution and use of postage meters. The regulations cover four general categories: meter security, administrative controls, Computerized Meter Resetting Systems (C.M.R.S.) and other issues. In general, the regulations impose reporting and performance obligations on meter manufacturers, prescribe potential administrative sanctions for failure to meet these obligations and require a restructuring of the fund management system of C.M.R.S., such as the company's Postage by Phone System, to give the U.S.P.S. more direct control over meter licensee deposits. The company is working with the U.S.P.S. to ensure that the implementation of these regulations provides mailing customers and the U.S.P.S. with the intended benefits, and that Pitney Bowes also benefits. The company has undertaken a number of actions to implement these changes, including modifying its Postage by Phone System. Customers now deposit prepayments of postage into a U.S.P.S. account rather than a trust account. The company's resetting of Postage by Phone meters still requires the customer to request an authorization and reset code from the company, a service for which the company charges a fee. The company continues to believe that the financial impact to the company resulting from implementation of these regulations will not be material. The company also continues to work with the U.S.P.S. to devise a multi- year migration schedule to phase out mechanical meters in the United States and replace them with electronic or digital meters in a manner that is most beneficial and least disruptive to the operations of the company's customers. This is consistent with the company's strategy of introducing new technology into the marketplace to add value to customers' operations and meet postal needs. This strategy and the company's long-term focus has resulted in an increase in the percentage of the electronic meters in the current U.S. base from six percent of the overall base in 1986 to nearly 50 percent of the installed meter base in 1995. In May 1996, the U.S.P.S. issued a proposed schedule for the phase out of mechanical meters in the United States marketplace. The schedule proposes that (i) as of June 1, 1996, placements of mechanical meters will be available only as replacements for existing licensed mechanical meters; (ii) as of March 1, 1997, mechanical meters may not be used by persons or firms who process mail for a fee; (iii) as of December 31, 1997, mechanical meters that interface with mail machines or processors will no longer be approved; and (iv) as of March 1, 1999, all other mechanical meters (stand alone meters) will no longer be approved. The company has voluntarily ceased marketing and making new placements of mechanical meters in the United States as of June 1, 1996. The company
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 13 intends to continue to work with the U.S.P.S. to devise a final mechanical meter migration schedule that is most beneficial to our customers and minimizes any negative impact to the company. Until such time as a final mechanical meter migration plan is completed, the financial impact, if any, on the company cannot be determined with any certainty; but it is currently the belief of the company that such migration plan will not cause a material adverse financial impact. The May 1996 U.S.P.S. proposal also contemplates the evolution of metering technology to include a digital information based indicia standard which has not yet been developed. In July 1996, the U.S.P.S. proposed initial specifications for a digital information based indicia program. The U.S.P.S. anticipates that digital metering would eventually replace electronic metering in the United States at some undetermined date in the future. The company's long-term strategy also envisions the use of digital technology in new product offerings; the company anticipates working with the U.S.P.S. in this effort to achieve a timely and effective substitution plan. However, until final standards for a digital information based indicia program are completed, and transition to the new standard is clarified by the U.S.P.S., the impact of this proposal, if any, on the company cannot be determined. The company wishes to caution readers that any forward-looking statements contained in this Form 10-Q or made by the management of the company involve risks and uncertainties, and are subject to change based on various important factors. The following factors, among others, could affect the company's financial results and could cause the company's financial performance to differ materially from the expectations expressed in any forward-looking statement made by or on behalf of the company -- the strength of worldwide economies; the effects of and changes in trade, monetary and fiscal policies and laws, and inflation and monetary fluctuations; the timely development of and acceptance of new Pitney Bowes products and the perceived overall value of these products by users including the features, pricing, and quality compared to competitors' products; the willingness of users to substitute competitors' products for Pitney Bowes products; the success of the company in gaining approval of its products in new markets where regulatory approval is required; the ability of the company to successfully enter new markets, including the ability to efficiently distribute and finance its products; the impact of changes in postal regulations around the world that directly regulate the manufacture, ownership and or distribution of postage meters, or that regulate postal rates and discounts; the willingness of mailers to utilize alternative means of communication; and the company's success at managing customer credit risk.
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 14 Part II - Other Information Item 1: Legal Proceedings The company is currently a defendant in a number of lawsuits arising in the ordinary course of business, 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. The company has been advised by the Antitrust Division of the U.S. Department of Justice that its civil investigation of Pitney Bowes' postage equipment business has been closed. The investigation was concluded without any findings that Pitney Bowes violated the surviving provisions of the 1959 consent decree between the company and the U.S. Department of Justice, and/or the antitrust laws. Item 4: Submission of Matters to a Vote of Security Holders. Below are the final results of the voting at the annual meeting of shareholders held on May 13, 1996: Proposal 1 - Election of Directors Nominee For Withheld Michael J. Critelli 115,246,883 11,800,384 George B. Harvey 115,203,912 11,843,355 Michael I. Roth 115,237,998 11,809,269 Phyllis S. Sewell 115,190,319 11,856,948 Proposal 2 - Appointment of Price Waterhouse LLP as Independent Accountants For Withheld Abstain 126,508,573 250,928 287,766
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 15 Proposal 3 - Proposal to Approve Adoption of the 1996 Pitney Bowes Employee Stock Purchase Plan For Withheld Abstain 120,823,328 5,561,570 662,369 Proposal 4 - Proposal to Approve Amendment to the Pitney Bowes 1991 Stock Plan For Withheld Abstain 121,337,186 4,762,280 947,801 Proposal 5 - Proposal to Approve Amendment to the Pitney Bowes Inc. Key Employees' Incentive Plan For Withheld Abstain 117,174,545 8,930,669 942,053 There were no broker non-votes on any proposals. The following other directors continued their term of office after the annual meeting: Linda G. Alvarado Charles E. Hugel Marc C. Breslawsky David T. Kimball William E. Butler Leroy D. Nunery Colin G. Campbell Arthur R. Taylor
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 16 Item 6: Exhibits and Reports on Form 8-K. (a) 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 See Exhibit (i) Incorporation, as amended. on page 18. (11) Computation of earnings See Exhibit (ii) per share. on page 49. (12) Computation of ratio of See Exhibit (iii) earnings to fixed charges. on page 50. (27) Financial Data Schedule See Exhibit (iv) on page 51. (b) Reports on Form 8-K. No reports on Form 8-K were filed for the three months ended June 30, 1996.
Pitney Bowes Inc. - Form 10-Q Six Months Ended June 30, 1996 Page 17 Signatures Pursuant to the requirements 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. August 14, 1996 /s/ C. F. Adimando C. F. Adimando Vice President - Finance and Administration, and Treasurer (Principal Financial Officer) /s/ A. F. Henock A. F. Henock Vice President - Controller and Chief Tax Counsel (Principal Accounting Officer)