Pitney Bowes 2012 Annual Report Download - page 67

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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share amounts)
49
December 31,
2012 2011
Sales-type lease receivables
Risk Level
Low $ 1,016,413 $ 1,096,676
Medium 450,432 473,394
High 43,658 58,177
Not Scored 71,208 99,406
Total $ 1,581,711 $ 1,727,653
Loan receivables
Risk Level
Low $ 254,567 $ 269,547
Medium 136,069 115,490
High 14,624 21,081
Not Scored 9,700 30,513
Total $ 414,960 $ 436,631
Troubled Debt
We maintain a program for U.S. clients in our North America loan portfolio who are experiencing financial difficulties, but are able
to make reduced payments over an extended period of time. Upon acceptance into the program, the client’s credit line is closed and
interest accrual is suspended. There is generally no forgiveness of debt or reduction of balances owed. The balance of loans in this
program, related loan loss allowance and write-offs are insignificant to the overall portfolio.
Leveraged Leases
Our investment in leveraged lease assets consisted of the following:
December 31,
2012 2011
Rental receivables $ 83,254 $ 810,306
Unguaranteed residual values 14,177 13,784
Principal and interest on non-recourse loans (55,092)(606,708)
Unearned income (7,793)(79,111)
Investment in leveraged leases 34,546 138,271
Less: deferred taxes related to leveraged leases (19,372)(101,255)
Net investment in leveraged leases $ 15,174 $ 37,016
During 2012 and 2011, we sold certain non-U.S. leveraged lease assets for cash. The investment in each of the leveraged leases at
the time of sale was $109 million. The leveraged lease assets sold in 2012 resulted in after-tax gain of $13 million and the leveraged
lease assets sold in 2011 resulted in an after-tax gain of $27 million.
Pitney Bowes Bank
The Pitney Bowes Bank (the Bank) is an indirect wholly owned subsidiary whose primary business is to provide financing solutions
to clients that rent or lease postage meters. The Bank's key product offering, Purchase Power, is a revolving credit solution, which
enables clients to finance their postage costs when they refill their meter. The Bank also provides a deposit solution to those clients
that prefer to prepay postage and earn interest on their deposits. When a client refills their postage meter, the funds are withdrawn
from the savings account to pay for the postage.
The Bank's assets consist primarily of finance receivables, short and long-term investments and cash and liabilities consist primarily
of deposit accounts. At December 31, 2012, the Bank had assets of $796 million and liabilities of $733 million. At December 31,