Pitney Bowes Announces Third Quarter 2017 Financial Results
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Pitney Bowes Announces Third Quarter 2017 Financial Results

STAMFORD, Conn. — (BUSINESS WIRE) — November 1, 2017 — Pitney Bowes Inc. (NYSE: PBI), a global technology company providing innovative technology solutions to power commerce, today reported financial results for the third quarter 2017.

Quarterly Financial Results:

Transaction Completed and Debt Management:

“Our third quarter revenue performance was largely in-line with our expectations; however our bottom line results fell short as we continued to realign our businesses to higher growth areas and invest in new business opportunities, products and solutions,” said Marc B. Lautenbach, President and CEO, Pitney Bowes. “During the third quarter, we validated that the next chapter of revenue growth will come from shipping, parcels and address verification, all of which transcends our entire business. And while I was disappointed in our financial results in the third quarter, I am encouraged about our path forward as we continue to transform our company.”

Lautenbach continued: “We have made substantial progress against our strategic objectives over the past four years and remain committed to improving margins and driving efficiencies throughout the business by deploying a $200 million spend reduction program. The recent acquisition of Newgistics repositions the portfolio towards growth. With the Board of Directors and management team continuing to focus on enhancing shareholder value, we believe now is the time to explore a broad range of strategic alternatives that may have the potential to further unlock shareholder value.”

Third Quarter 2017 Results

Revenue totaled $843 million for the quarter, which was flat versus prior year.

Digital Commerce Solutions revenue grew 19 percent and Enterprise Business Solutions revenue increased 1 percent. Small and Medium Business (SMB) Solutions revenue declined 7 percent as reported and 8 percent at constant currency.

GAAP earnings per diluted share (GAAP EPS) were $0.31, which included $0.02 for transaction costs related to the Newgistics acquisition as well as $0.01 for restructuring charges. Adjusted earnings per diluted share (Adjusted EPS) were $0.33.

The Company’s earnings per share results for the third quarter are summarized in the table below:

      Third Quarter*  
     

2017

     

2016

 
GAAP EPS     $0.31       $0.35  
Transaction costs     $0.02       -  
Restructuring charges and asset impairments, net     $0.01       $0.06  
Tax adjustment – preferred stock redemption     -       $0.03  
Adjusted EPS     $0.33       $0.44  
                 
* The sum of the earnings per share may not equal the totals above due to rounding.
 

GAAP Cash from Operations and Free Cash Flow Results

GAAP cash from operations during the quarter was $146 million and free cash flow was $109 million. Compared to the prior year, free cash flow decreased by $11 million primarily due to lower net income offset by favorable working capital, specifically within accounts payable and accrued liabilities. During the quarter, the Company used cash to pay down $385 million of debt, return $35 million in dividends to shareholders and pay $11 million for restructuring payments.

Debt Management

During the quarter, the Company issued $400 million 5 year fixed rate notes, $300 million 3 year fixed rate notes and borrowed $350 million in term loans. The Company used these proceeds together with cash on-hand to fund the Newgistics acquisition and redeem $385 million notes due September 2017. In October 2017, the Company also redeemed the $350 million notes that would have come due in May 2018.

Third Quarter 2017 Business Segment Reporting

The Company’s business segment reporting reflects the clients served in each market and the way it manages these segments. The reporting segment groups are the SMB Solutions group; the Enterprise Business Solutions group; and the Digital Commerce Solutions group. The segment results for the quarter and prior year may not equal the subtotals for each segment group due to rounding.

The SMB Solutions group offers mailing and office shipping solutions, financing, services, and supplies for small and medium businesses to help simplify and save on the sending, tracking and receiving of letters, parcels and flats. This group includes the North America Mailing and International Mailing segments.

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

The Digital Commerce Solutions group includes the Software Solutions and Global Ecommerce segments. Software Solutions provide customer engagement, customer information and location intelligence software. Global Ecommerce facilitates global cross-border ecommerce transactions and domestic retail and ecommerce shipping solutions.

 

SMB Solutions Group

      ($ millions)     Third Quarter
      Revenue    

   2017   

 

   2016   

 

Y/Y
Reported

 

Y/Y
Ex Currency

      North America Mailing     $320   $350   (9%)   (9%)
      International Mailing     94   97   (3%)   (5%)
      SMB Solutions     $414   $447   (7%)   (8%)
                         
      EBIT                  
      North America Mailing     $108   $142   (24%)    
      International Mailing     9   9   (5%)    
      SMB Solutions     $117   $151   (23%)    
                         

North America Mailing

The Company successfully launched the new SendPro C-Series product line in early September, and as such recognized less than a month of equipment sales from this new product during the quarter. Equipment sales declined largely due to lower sales in the top of the line products, where prior year included a large deal, and this year, a few deals did not close in the quarter. In addition, North America Mailing realized a lower level of client lease extensions, which impacted equipment sales. Recurring revenue streams declined, largely around lower rentals and financing revenue. EBIT margin was lower than prior year largely due to the decline and mix of equipment sales along with the decline in recurring streams.

International Mailing

Revenue declined largely due to lower recurring revenue streams. Equipment sales were relatively flat driven by growth in France and the UK, and offset primarily by weakness in Italy and Japan. EBIT margin decreased slightly from prior year.

 

Enterprise Business Solutions Group

      ($ millions)     Third Quarter
      Revenue    

   2017   

 

   2016   

 

Y/Y
Reported

 

Y/Y
Ex Currency

      Production Mail     $104   $106   (2 %)   (3 %)
      Presort Services     119   114   4 %   4 %
      Enterprise Business     $223   $220   1 %   1 %
                         
      EBIT                  
      Production Mail     $15   $16   (5 %)    
      Presort Services     19   19   2 %    
      Enterprise Business     $34   $35   (1 %)    
                           

 

Production Mail

Equipment sales declined versus prior year largely due to lower inserter equipment placements, which were partially offset by higher print equipment sales. Support services revenue was slightly favorable, but offset by a decline in Supplies revenue. EBIT margin declined from prior year primarily as a result of the decline in revenue and the mix of equipment sales.

Presort Services

Revenue growth was driven by improved revenue per piece along with higher Standard Class mail and Parcel volumes processed, but partly offset by lower First Class mail volumes. EBIT margin declined slightly from prior year driven by increased mail processing costs and investments in the Company’s new parcel sortation capabilities.

 

Digital Commerce Solutions Group

      ($ millions)     Third Quarter
      Revenue    

   2017   

 

   2016   

 

Y/Y
Reported

 

Y/Y
Ex Currency

      Software Solutions     $99     $89   12 %   11 %
      Global Ecommerce     106     83   28 %   28 %
      Digital Commerce     $206     $172   19 %   19 %
                         
      EBIT                  
      Software Solutions     $21     $10  

> 100

%

   
      Global Ecommerce     (10 )   2  

> (100

%)

   
      Digital Commerce     $11     $12   (5 %)    
                             

Software Solutions

Revenue growth was driven by higher license revenue, primarily in Location Intelligence and Customer Information Management. License revenue also benefited from a large Location Intelligence deal that closed in the quarter. The Company is continuing to see progress in developing the indirect channel which showed solid growth. EBIT margin increased from prior year largely driven by the higher licensing revenue.

Global Ecommerce

The sustained double-digit revenue growth was driven by strong performance in all of the cross-border geographies, as well as growth in domestic shipping. The domestic shipping increase is driven by end-to-end carrier services enabled by the Company’s shipping API’s. The EBIT loss was driven primarily by investments in market growth opportunities as well as the resolution of a vendor contractual dispute and a specific marketing program with a cross-border client. The Company continues to invest in its cross-border solutions and domestic shipping capabilities.

2017 Guidance

The Company is increasing its annual guidance range for revenue and lowering its annual guidance range for adjusted EPS and free cash flow.

The Company’s guidance for the full year 2017 is now expected to be:

The Company is lowering its annual tax range on adjusted earnings. The Company now expects to be in the range of 28 percent to 30 percent as compared to the previous range of 31 percent to 33 percent.

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 2016 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission.

This guidance excludes any unusual items that may occur or additional portfolio or restructuring actions, not specifically identified, as the Company implements plans to further streamline its operations and reduce costs. Revenue guidance is provided on a constant currency basis. The Company cannot reasonably predict the impact that future changes in currency exchange rates will have on revenue and net income. Additionally, the Company cannot provide GAAP EPS and GAAP cash from operations guidance due to the uncertainty of future potential restructurings, goodwill and asset write-downs, unusual tax settlements or payments and contributions to its pension funds, acquisitions, divestitures and other potential adjustments, which could (individually or in the aggregate) have a material impact on the Company’s performance. The Company’s guidance is based on an assumption that the global economy and foreign exchange markets in 2017 will not change significantly.

Review of Strategic Alternatives

The Pitney Bowes Board of Directors, together with management, is conducting a process to explore and evaluate strategic alternatives to further enhance shareholder value. The Board has not set a timetable for the process nor has it made any decisions related to any strategic alternatives at this time. There can be no assurance that the exploration of strategic alternatives will result in any particular outcome. The Company does not intend to provide updates unless or until it determines that further disclosure is appropriate or necessary.

The company has retained Lazard as its financial advisor and Cravath, Swaine & Moore LLP as its legal advisor to assist in the process.

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. ET. Instructions for listening to the earnings results via the Web are available on the Investor Relations page of the Company’s web site at www.pitneybowes.com.

About Pitney Bowes

Pitney Bowes (NYSE: PBI) is a global technology company powering billions of transactions – physical and digital – in the connected and borderless world of commerce. Clients around the world, including 90 percent of the Fortune 500, rely on products, solutions, services and data from Pitney Bowes in the areas of customer information management, location intelligence, customer engagement, shipping, mailing, and global ecommerce. And with the innovative Pitney Bowes Commerce Cloud, clients can access the broad range of Pitney Bowes solutions, analytics, and APIs to drive commerce. For additional information visit Pitney Bowes, the Craftsmen of Commerce, at www.pitneybowes.com.

Use of Non-GAAP Measures

The Company's financial results are reported in accordance with generally accepted accounting principles (GAAP); however, in our disclosures we use certain non-GAAP measures, such as adjusted earnings before interest and taxes, Adjusted EPS, revenue growth on a constant currency basis, free cash flow and Segment EBIT.

The Company reports measures such as adjusted earnings before interest and taxes (EBIT) and Adjusted EPS and adjusted income from continuing operations to exclude the impact of special items like restructuring charges, tax adjustments, goodwill and asset write-downs, and costs related to dispositions and acquisitions. While these are actual Company expenses, they can mask underlying trends associated with its 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.

In addition, revenue growth is 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 period. Constant currency is calculated by converting our current quarter reported results using the prior year’s exchange rate for the comparable quarter. This comparison allows an investor insight into the underlying revenue performance of the business and true operational performance from a comparable basis to prior period. A reconciliation of reported revenue to constant currency revenue can be found in the Company’s attached financial schedules.

The Company reports free cash flow in order to provide investors insight into the amount of cash that management could have available for other discretionary uses. Free cash flow adjusts GAAP cash from operations for capital expenditures, restructuring payments, unusual tax settlements, contributions to the Company’s pension fund and cash used for other special items. A reconciliation of GAAP cash from operations to free cash flow can be found in the Company’s attached financial schedules.

In addition, Management uses segment EBIT to measure profitability and performance at the segment level. Segment EBIT is determined by deducting from 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. A reconciliation of Segment EBIT to the Company’s total Net Income can be found in the Company’s attached financial schedules.

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 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, including statements about the potential outcome of the Board’s exploration of strategic alternatives. 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: the announcement that the Board is conducting a review of strategic alternatives and the potential impact of such announcement on the Company’s current or potential customers, partners and personnel; the cost of the review process and the disruption the process may have on the Company’s operations, including the diversion of the attention of the Company’s management and employees; 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 if required, and the market’s acceptance of these new products and services; our ability to fully utilize the enterprise business platform in North America implemented in 2016, 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; 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 2016 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 nine months ended September 30, 2017 and 2016, and consolidated balance sheets as of September 30, 2017 and December 31, 2016 are attached.

     
Pitney Bowes Inc.
Consolidated Statements of Income
(Unaudited; in thousands, except share and per share amounts)
                   
  Three months ended September 30,   Nine months ended September 30,
  2017     2016     2017     2016  
Revenue:                  
Equipment sales $ 157,649   $ 173,143     $ 479,248   $ 485,145  
Supplies   58,296     61,306       188,342     198,631  
Software   99,600     89,087       264,131     257,760  
Rentals   95,901     102,747       291,770     309,706  
Financing   81,184     87,883       250,582     276,915  
Support services   120,479     123,954       354,625     383,632  
Business services   229,711     200,911       672,133     607,717  
                   
Total revenue   842,820     839,031       2,500,831     2,519,506  
                   
Costs and expenses:                  
Cost of equipment sales   85,647     86,147       232,398     235,741  
Cost of supplies   18,827     20,348       60,207     60,662  
Cost of software   25,713     25,698       75,816     79,496  
Cost of rentals   20,818     16,041       63,056     54,951  
Financing interest expense   12,629     12,965       38,446     41,375  
Cost of support services   70,688     74,799       217,232     224,790  
Cost of business services   166,984     140,989       470,890     417,357  
Selling, general and administrative   304,398     300,983       908,169     916,981  
Research and development   32,057     28,680       96,871     89,761  
Restructuring charges and asset impairments, net   1,493     16,494       30,502     49,503  
Interest expense, net   28,601     22,294       81,877     62,394  
                   
Total costs and expenses   767,855     745,438       2,275,464     2,233,011  
                   
Income before income taxes   74,965     93,593       225,367     286,495  
Provision for income taxes   17,607     23,197       53,975     93,615  
                   
Income from continuing operations   57,358     70,396       171,392     192,880  
Loss from discontinued operations, net of tax â�•     (291 )   â�•     (1,951 )
                   
Net income   57,358     70,105       171,392     190,929  
Less: Preferred stock dividends attributable to noncontrolling interests â�•     4,593     â�•     13,781  
                   
Net income - Pitney Bowes Inc. $ 57,358   $ 65,512     $ 171,392   $ 177,148  
                   
Amounts attributable to common stockholders:                  
Net income from continuing operations $ 57,358   $ 65,803     $ 171,392   $ 179,099  
Loss from discontinued operations, net of tax â�•     (291 )   â�•     (1,951 )
                   
Net income - Pitney Bowes Inc. $ 57,358   $ 65,512     $ 171,392   $ 177,148  
                   
Basic earnings per share attributable to common stockholders (1):                  
Continuing operations $ 0.31   $ 0.35     $ 0.92   $ 0.95  
Discontinued operations â�•   â�•     â�•     (0.01 )
                   
Net income - Pitney Bowes Inc. $ 0.31   $ 0.35     $ 0.92   $ 0.94  
                   
Diluted earnings per share attributable to common stockholders (1):                  
Continuing operations $ 0.31   $ 0.35     $ 0.92   $ 0.94  
Discontinued operations â�•   â�•     â�•     (0.01 )
                   
Net income - Pitney Bowes Inc. $ 0.31   $ 0.35     $ 0.92   $ 0.93  
                   
Weighted-average shares used in diluted earnings per share   187,756,543     186,682,575       187,200,225     189,592,489  
                           

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

 

 

 
Pitney Bowes Inc.
Consolidated Balance Sheets
(Unaudited; in thousands, except share amounts)
         

Assets

  September 30,

2017

  December 31,

2016

Current assets:        
Cash and cash equivalents   $ 1,696,903     $ 764,522  
Short-term investments     45,508       38,448  
Accounts receivable, net     408,886       455,527  
Short-term finance receivables, net     826,122       893,950  
Inventories     118,282       92,726  
Current income taxes     42,605       11,373  
Other current assets and prepayments     82,251       68,637  
         
Total current assets     3,220,557       2,325,183  
         
Property, plant and equipment, net     338,340       314,603  
Rental property and equipment, net     185,866       188,054  
Long-term finance receivables, net     650,793       673,207  
Goodwill     1,616,968       1,571,335  
Intangible assets, net     145,376       165,172  
Noncurrent income taxes     77,188       74,806  
Other assets     546,319       524,773  
         
Total assets   $ 6,781,407     $ 5,837,133  
         

Liabilities and stockholders' equity (deficit)

       
Current liabilities:        
Accounts payable and accrued liabilities   $ 1,348,395     $ 1,378,822  
Current income taxes     13,542       34,434  
Current portion of long-term debt     620,256       614,485  
Advance billings     282,537       299,878  
         
Total current liabilities     2,264,730       2,327,619  
         
Deferred taxes on income     257,987       204,289  
Tax uncertainties and other income tax liabilities     39,671       61,276  
Long-term debt     3,562,672       2,750,405  
Other noncurrent liabilities     555,514       597,204  
         
Total liabilities     6,680,574       5,940,793  
         
Stockholders' equity (deficit):        
Cumulative preferred stock, $50 par value, 4% convertible     1       1  
Cumulative preference stock, no par value, $2.12 convertible     457       483  
Common stock, $1 par value     323,338       323,338  
Additional paid-in-capital     133,394       148,125  
Retained earnings     5,174,602       5,107,734  
Accumulated other comprehensive loss     (818,484 )     (940,133 )
Treasury stock, at cost     (4,712,475 )     (4,743,208 )
         
Total Pitney Bowes Inc. stockholders' equity (deficit)     100,833       (103,660 )
         
Total liabilities and stockholders' equity (deficit)   $ 6,781,407     $ 5,837,133  
                 

 

             
Pitney Bowes Inc.

Business Segments - Revenue and EBIT

(Unaudited; in thousands)

                                     
    Three months ended September 30,   Nine months ended September 30,
      2017      

2016 (1)

 

  % Change     2017      

2016 (1)

 

  % Change

Revenue

                                   
                                     
North America Mailing   $ 319,966     $ 349,785     (9 %)   $ 1,016,640     $ 1,064,456     (4 %)
International Mailing     93,770       96,730     (3 %)     282,150       309,297     (9 %)
Small & Medium Business Solutions     413,736       446,515     (7 %)     1,298,790       1,373,753     (5 %)
                                     
Production Mail     104,387       106,350     (2 %)     278,912       289,649     (4 %)
Presort Services     119,074       114,053     4 %     370,203       357,214     4 %
Enterprise Business Solutions     223,461       220,403     1 %     649,115       646,863    

�

%

                                     
Software Solutions     99,442       89,031     12 %     264,087       257,417     3 %
Global Ecommerce     106,181       83,082     28 %     288,839       241,473     20 %
Digital Commerce Solutions     205,623       172,113     19 %     552,926       498,890     11 %
                                     
Total revenue   $ 842,820     $ 839,031    

�

%

  $ 2,500,831     $ 2,519,506     (1 %)
                                     

EBIT

                                   
                                     
North America Mailing   $ 107,777     $ 141,968     (24 %)   $ 369,662     $ 449,696     (18 %)
International Mailing     8,729       9,198     (5 %)     35,967       32,842     10 %
Small & Medium Business Solutions     116,506       151,166     (23 %)     405,629       482,538     (16 %)
                                     
Production Mail     14,920       15,696     (5 %)     31,515       35,434     (11 %)
Presort Services     19,474       19,181     2 %     69,461       69,305    

�

%

Enterprise Business Solutions     34,394       34,877     (1 %)     100,976       104,739     (4 %)
                                     
Software Solutions     20,912       10,329    

>100

%

    31,216       17,908     74 %
Global Ecommerce     (9,594 )     1,544    

>(100

%)

    (17,894 )     (2,608 )  

>(100

%)

Digital Commerce Solutions     11,318       11,873     (5 %)     13,322       15,300     (13 %)
                                     
Segment EBIT (2)   $ 162,218     $ 197,916     (18 %)   $ 519,927     $ 602,577     (14 %)
                                     
                                     
Reconciliation of segment EBIT to net income                                  
                                     
Segment EBIT   $ 162,218     $ 197,916           $ 519,927     $ 602,577        
Corporate expenses     (38,848 )     (51,992 )           (144,138 )     (158,536 )      
Adjusted EBIT     123,370       145,924             375,789       444,041        
Interest, net (3)     (41,230 )     (35,259 )           (120,323 )     (103,769 )      
Restructuring charges and asset impairments, net     (1,493 )     (16,494 )           (30,502 )     (49,503 )      
Gain on sale of technology   â�•     â�•             6,085     â�•        
Acquisition/disposition related expenses     (5,682 )     (578 )           (5,682 )     (4,274 )      
Income before income taxes     74,965       93,593             225,367       286,495        
Provision for income taxes     (17,607 )     (23,197 )           (53,975 )     (93,615 )      
Income from continuing operations     57,358       70,396             171,392       192,880        
Loss from discontinued operations, net of tax   â�•       (291 )         â�•       (1,951 )      
Net income   $ 57,358     $ 70,105           $ 171,392     $ 190,929        
                                             
(1)   Prior period amounts have been recast to conform to the current year presentation.
(2)   Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, and other items that are not allocated to a particular business segment.
(3)   Includes financing interest expense and interest expense, net.
     

 

 
Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted Results
(Unaudited; in thousands, except per share amounts)
                                 
   

Three months ended

    Nine months ended  
   

September 30,

    September 30,  
      2017       2016     Y/Y Chg.     2017       2016     Y/Y Chg.
                                 
Reconciliation of reported revenue to revenue excluding currency                          
Revenue, as reported   $ 842,820     $ 839,031         $ 2,500,831     $ 2,519,506      
Unfavorable impact on revenue due to currency     (4,476 )               15,690            
Revenue, excluding currency   $ 838,344     $ 839,031    

�%

  $ 2,516,521     $ 2,519,506     â�•%
                                 
                                 
Reconciliation of reported net income to adjusted earnings                            
Net income   $ 57,358     $ 70,105         $ 171,392     $ 190,929      
Loss from discontinued operations, net of tax   â�•       291         â�•       1,951      
Restructuring charges and asset impairments, net     969       10,840           20,073       32,399      
Gain on sale of technology   â�•     â�•           (5,605 )   â�•      
Acquisition/disposition related expenses     3,583       365           3,583       2,904      
Tax cost - preferred stock redemption   â�•       4,847         â�•       4,847      
Net income, as adjusted     61,910       86,448           189,443       233,030      
Provision for income taxes, as adjusted     20,230       24,217           66,023       107,242      
Income from continuing operations before income taxes, as adjusted     82,140       110,665           255,466       340,272      
Interest, net     41,230       35,259           120,323       103,769      
EBIT, as adjusted     123,370       145,924           375,789       444,041      
Depreciation and amortization     43,829       50,687           131,989       140,225      
EBITDA, as adjusted   $ 167,199     $ 196,611         $ 507,778     $ 584,266      
                                 
                                 
Reconciliation of reported diluted earnings per share to adjusted diluted earnings per share                      
Diluted earnings per share   $ 0.31     $ 0.35         $ 0.92     $ 0.93      
Loss from discontinued operations, net of tax  

�

    â�•         â�•       0.01      
Restructuring charges and asset impairments, net     0.01       0.06           0.11       0.17      
Gain on sale of technology  

�

    â�•           (0.03 )   â�•      
Acquisition/disposition related expenses     0.02     â�•           0.02       0.01      
Tax cost - preferred stock redemption  

�

      0.03         â�•       0.03      
Diluted earnings per share, as adjusted   $ 0.33     $ 0.44         $ 1.01     $ 1.16      
                                 
Note: The sum of the earnings per share amounts may not equal the totals due to rounding.                    
                                 
                                 
Reconciliation of reported net cash from operating activities to free cash flow                          
Net cash provided by operating activities (1)   $ 145,930     $ 137,775         $ 330,577     $ 296,359      
Capital expenditures     (42,941 )     (44,173 )         (119,562 )     (115,532 )    
Restructuring payments     10,960       17,295           29,976       51,161      
Pension contribution   â�•     â�•         â�•       36,731      
Reserve account deposits     (5,022 )     8,956           (2,508 )     1,813      
Other   â�•     â�•         â�•       335      
Free cash flow   $ 108,927     $ 119,853         $ 238,483     $ 270,867      
                                         

(1)

 

Net cash provided by operating activities for the three and nine months ended September 30, 2016 has been revised for a new accounting standard adopted January 1, 2017.

 



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Financial -
Adam David, 203-351-7175
VP, Investor Relations