Pitney Bowes 2005 Annual Report Download - page 8

over 2004. We have also adopted a shared services
model for our finance, HR and IT operations that
allows us to serve a larger employee population
with a significantly smaller corporate staff.
We are at an earlier stage in our efforts to
improve productivity in Europe, and expect to see
significant improvements starting in 2006. We
closed our manufacturing facility in Friedberg,
Germany, in 2005, consistent with our reduced
investment in direct manufacturing.
Capital Services
We are assessing a broad range of options to carry
out our stated intention to exit our capital services
business in a way that maximizes shareholder
value. Several factors, including improved economic
conditions, have produced a more attractive range
of options now than when we first announced our
decision to exit this business in 2003. In early
March 2006, we announced that we had signed a
definitive agreement to sell our Imagistics
International Inc. lease portfolio to De Lage
Landen Operational Services, LLC. The sale price,
which will be determined by the size of the
portfolio at the time of closing, is expected to be
between $280 million and $290 million.
Our Employee Focus
We significantly improved our employee
engagement metrics in 2005 over the previous
year. I am particularly proud that the Executive
Leadership Council, an oganization representing
the most senior African-American executives in
Fortune 500 companies, recognized us with its
Corporate Award for our leadership in corporate
diversity. I consider my own work in the National
Urban League to be a personal privilege that
helps give visibility to our diversity efforts.
Comments on Our Strategy and the Stock Price
We were disappointed that our stock did not
perform better in 2005, despite our strong
financial and operational performance. We
understand that some investors would like us
to focus solely on significantly increasing our
dividends, others would like us to concentrate
on share repurchases, and still others would
like us to invest solely in growth. In 2006, we
will increase our efforts to help investors
understand why we are not pursuing a single
“game-changing” move and instead are
pursuing a balanced strategy that includes
steadily improving growth, achieved through
strategic investments and other actions, as well
as above-average dividends and a strong share
repurchase program. Our overall performance in
2005 supports our belief that this is the right path
for delivering long-term shareholder value.
Michael J. Critelli
Chairman and Chief Executive Officer
We are showing our
customers
and prospects how
to make their
mail work
harder
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