Pitney Bowes 2010 Annual Report Download - page 76

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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share data)
57
the periods 2007 through 2009. A $14.4 million adjustment was also made to opening retained earnings to establish the related tax
liabilities for earlier years. The impact of the adjustments was not material to any previously reported period.
At December 31, 2010, our current tax accounts included a $36 million tax receivable for uncertain tax positions, which was received
in February 2011.
10. Noncontrolling Interests (Preferred Stockholders’ Equity in Subsidiaries)
Pitney Bowes International Holdings, Inc. (PBIH), a subsidiary, had 3,750,000 shares outstanding or $375 million of variable term
voting preferred stock owned by certain outside institutional investors. These preferred shares were entitled as a group to 25% of the
combined voting power of all classes of capital stock of PBIH. All outstanding common stock of PBIH, representing the remaining
75% of the combined voting power of all classes of capital stock, was owned directly or indirectly by the Company. The preferred
stock was entitled to cumulative dividends at rates set at auction. The weighted average dividend rate was 4.8% during 2009 and
2008. During the fourth quarter of 2009, PBIH redeemed all of the outstanding variable term voting preferred stock, which was
funded by the combined proceeds from the issuance of the Preferred Stock (see below), cash flows from operations and commercial
paper.
In 2009, PBIH issued 300,000 shares, or $300 million, of perpetual voting preferred stock (the Preferred Stock) to certain outside
institutional investors. The holders of the Preferred Stock are entitled as a group to 25% of the combined voting power of all classes
of capital stock of PBIH. All outstanding common stock of PBIH, representing the remaining 75% of the combined voting power of
all classes of capital stock, is owned directly or indirectly by the Company. The Preferred Stock is entitled to cumulative dividends at
a rate of 6.125% for a period of seven years after which it becomes callable and, if it remains outstanding, will yield a dividend that
increases by 150% every six months thereafter.
Preferred dividends are included in Preferred stock dividends of subsidiaries attributable to noncontrolling interests in the
Consolidated Statements of Income. No dividends were in arrears at December 31, 2010 or December 31, 2009.
Activity in the noncontrolling interests account for the years ended December 31, 2009 and 2010 is below.
Beginning balance January 1, 2009 $ 374,165
Share issuances, net of issuance costs of $3.6 million 296,370
Share redemptions (374,165)
Ending balance at December 31, 2009 296,370
Share issuances -
Share redemptions -
Ending balance at December 31, 2010 $ 296,370