Pitney Bowes 2006 Annual Report Download - page 7

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solutions that none of the acquired companies could have delivered on its own. A good
example is our new marketing services segment, which joins AAS and pmh, two companies
we acquired in 2006, with Imagitas, a leader in life-event marketing we acquired in 2005.
We are also partnering with Digital Cement, a leading innovator in relationship marketing.
Pitney Bowes can now offer clients a powerful suite of solutions to maximize the revenue
value of customer relationships while leveraging mailstream efficiencies.
Grow 2:1
When we updated Wall Street analysts on the state of our business last September, we
made a commitment to the goal of growing revenue at least twice as fast as expenses. We
call this Grow 2:1. It is more than a productivity initiative; it is in fact a new way of thinking
about our operating leverage and a permanent change in how we manage our business.
The emphasis is on quality growth, not just on cutting costs—although reducing unnecessary
expenses is certainly part of it. Grow 2:1 compels us to pursue businesses that produce
high margin/high return recurring-
revenue streams and to constantly
seek opportunities for shared services,
outsourcing partners, and reducing
resource consumption wherever possible.
To achieve the goals of Grow 2:1, we
are also refining our go-to-market strategies. For routine transactions we are placing
increased emphasis on telesales, Internet sales, retail partnerships and independent dealers.
This approach allows us to focus our highly trained sales force on more consultative sales
involving higher-value integrated solutions.
The Investor Value Proposition
In September, we also reaffirmed for investors our goal of consistently delivering earnings-
per-share growth of 8 percent to 10 percent and a dividend consistent with a 2.5 percent
to 3 percent yield. We aim to deliver a total shareholder return of 11 percent to 13 percent,
with relatively low risk. In 2006, our total shareholder return was 12.6 percent. While we
recognize that other investments might yield a higher return in any given quarter or year,
our goal is that Pitney Bowes stock will continue to outperform the S&P 500 over time.
(For a more detailed discussion of our financial results, see the letter from Bruce Nolop,
our Chief Financial Officer, starting on page 30 of this report.)
We aim to deliver a
total shareholder return of
11 percent to 13 percent.