Segment EBIT is the primary measure of profitability and operational performance at the segment level. Segment EBIT is determined by deducting from segment revenue 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. The Company has also included segment EBITDA as a useful measure for profitability and operational performance, and an additional way to look at the economics of the segments, especially in light of some of the Company’s more recent, larger acquisitions. Segment EBITDA further excludes depreciation and amortization expense for the segment. A reconciliation of segment EBIT and EBITDA to total net income can be found in the attached financial schedules.
Pitney Bowes has provided a quantitative reconciliation to GAAP in supplemental schedules. This information can be found at the Company's web site www.pb.com/investorrelations.
This document contains “forward-looking statements” about the Company’s expected or potential future business and financial performance. Forward-looking statements include, but are not limited to, statements about its 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: declining physical mail volumes; competitive factors, including pricing pressures, technological developments, the introduction of new products and services by competitors, and fuel prices; our success in developing new products and services, including digital-based products and services, obtaining regulatory approvals, if needed, of new products, and the market’s acceptance of these new products and services; our ability to fully utilize the enterprise business platform in North America, and successfully deploy it in major international markets without significant disruptions to existing operations; a breach of security, including a cyberattack or other comparable event; the continued availability and security of key information technology systems and the cost to comply with information security requirements and privacy laws; changes in postal or banking regulations; changes in, or loss of, our contractual relationships with the United States Postal Service; the risk of losing large clients in the Global Ecommerce segment; macroeconomic factors, including global and regional business conditions that adversely impact customer demand, foreign currency exchange rates, interest rates and labor conditions; capital market disruptions or credit rating downgrades that adversely impact our ability to access capital markets at reasonable costs; management of outsourcing arrangements; integrating newly acquired businesses, including operations and product and service offerings; management of customer credit risk and other factors beyond its control as more fully outlined in the Company's 2017 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 months and six months ended June 30, 2018 and 2017, and consolidated balance sheets as of June 30, 2018 and December 31, 2017 are attached.
|Pitney Bowes Inc.|
|Consolidated Statements of Income|
|(Unaudited; in thousands, except share and per share amounts)|
|Three months ended June 30,||Six months ended June 30,|
|Costs and expenses:|
|Cost of equipment sales||47,106||51,506||93,160||96,122|
|Cost of supplies||15,738||16,216||32,685||33,068|
|Cost of software||26,459||23,361||50,514||46,515|
|Cost of rentals||21,078||21,143||45,132||41,422|
|Financing interest expense||12,346||12,843||24,571||25,817|
|Cost of support services||39,609||41,772||82,736||83,421|
|Cost of business services||293,480||153,063||590,879||303,906|
|Selling, general and administrative (1)||282,456||283,073||577,894||573,645|
|Research and development||31,073||30,328||61,395||59,282|
|Restructuring charges and asset impairments, net||11,503||25,990||12,407||27,639|
|Other components of net pension and postretirement cost (1)||(2,499||)||1,267||(4,218||)||2,723|
|Interest expense, net||29,623||27,600||60,476||53,276|
|Total costs and expenses||807,972||688,162||1,627,631||1,346,836|
|Income from continuing operations before taxes||53,464||42,251||114,753||126,757|
|Provision for income taxes||6,458||790||22,721||27,872|
|Income from continuing operations||47,006||41,461||92,032||98,885|
|Income from discontinued operations, net of tax||1,208||7,440||9,695||15,149|
|Basic earnings per share attributable to common stockholders (2) :|
|Diluted earnings per share attributable to common stockholders (2) :|
|Weighted-average shares used in diluted earnings per share||188,113,750||187,377,059||188,056,884||186,944,571|
Effective January 1, 2018, components of net periodic pension and postretirement costs, other than service costs, are required to be reported separately. Accordingly, for the three and six months ended June 30, 2017, $1.3 million and $2.7 million of costs have been reclassified from selling, general and administrative expense to other components of net pension and postretirement cost.
|(2)||The sum of the earnings per share amounts may not equal the totals due to rounding.|