This excerpt taken from the PBI 8-K filed Feb 5, 2007.
FOURTH QUARTER 2006 RESULTS
For the fourth quarter 2006, revenue increased eight percent to $1.55 billion. Income from continuing operations increased from $84 million in the fourth quarter 2005 to $163 million in the fourth quarter 2006, which was an increase of 95 percent. Earnings per diluted share from continuing operations increased 101 percent from $.36 in the fourth quarter 2005 to $.73 this quarter.
The company completed its previously announced restructuring program and recorded an after-tax restructuring charge of $12 million or $.05 per diluted share during the quarter. The company also recorded an after-tax gain of $2 million in other income or $0.01 per diluted share, primarily due to a revised liability estimate associated with a previous legal settlement.
Excluding the impact of the restructuring charge and gain resulting from a revised liability estimate with respect to a legal settlement, adjusted diluted earnings per share from
continuing operations increased eleven percent from $.69 in the prior year to $.77 this quarter. This was in line with the companys guidance of $.76 to $.78 per diluted share. For the full year 2006, the adjusted diluted earnings per share from continuing operations was $2.69 versus $2.46 in 2005, which was a nine percent increase. The following table presents a reconciliation of earnings per share from continuing operations both on a Generally Accepted Accounting Principles (GAAP) basis and on an adjusted basis.
The company also had a $0.02 per share loss in discontinued operations resulting from interest costs associated with the tax payments made to the IRS related to Capital Services. This compares with $0.02 per share of income from discontinued operations in the prior year. For the full-year 2006, the company had a $2.04 per share loss in discontinued operations versus income of $0.15 per share in the prior year.
As previously discussed, the company adopted the new accounting rule for pension and other retiree benefits (FAS 158). The company recorded a $297 million reduction to equity, which was less than it had originally anticipated due to a higher discount rate and the strong performance of pension plan investments in 2006. In the U.S. the companys qualified pension plans are fully funded on both an accumulated benefit obligation and projected benefit obligation basis.
Net cash used in operating activities was $622 million during the quarter. The net use of cash during the quarter includes the payment of $802 million of taxes related to the sale of Capital Services and the settlement with the IRS as previously disclosed. This payment was funded by cash received from the sale of Capital Services, which had been placed in short-term
investments. Excluding the tax payment, net cash from operating activities was $180 million for the quarter.
Free cash flow was $126 million for the quarter and $523 million for the full-year. Free cash flow included $81 million for the quarter and $208 million for the full-year of investments in finance receivables, net of reserve account deposits.
The companys Board of Directors authorized a one-cent increase of its quarterly common stock dividend to $.33 per share. The increased dividend will be paid in the first quarter, marking the 25th consecutive year that the company has increased the dividend on its common stock.
The company used $88 million to repurchase 1.9 million of its shares during the quarter and still has authorization to repurchase $141 million of its common shares. During the year, the company repurchased 9.2 million shares for $400 million.