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This excerpt taken from the PBI 10-K filed Mar 1, 2007. Accounting for Variable Interest Entities FASB Interpretation (FIN) No. 46, Consolidation of Variable Interest Entities requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or is entitled to receive a majority of the entity’s residual returns or both. Our ownership of the equity of PBG qualified as a variable interest entity under FIN 46. PBG was formed with GATX Corporation in 1997 for the purpose of financing and managing certain leasing related assets. We adopted the provisions of FIN 46 effective March 31, 2004 and consolidated the assets and liabilities of PBG on March 31, 2004. Prior to March 31, 2004, we accounted for PBG under the equity method of accounting. PBG’s minority interest of $29 million is included in other non-current liabilities in the Consolidated Balance Sheets at December 31, 2005. Our ownership of the equity of PBG was through our Capital Services external financing business which was sold in 2006. See Note 2 and 18 of the Consolidated Financial Statements. 50 PITNEY BOWES INC. |
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