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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Joan Osland Graffius who wrote (15458)	9/14/2002 2:49:57 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78843

Yes, PBI debt is troubling. Not so much because the d/e ratio is high (3.9). Equity is only $913M (6/30/02), so it's not the absolute value of that debt that's troubling either. I just don't like that the debt keeps increasing: quicken.com I suppose this can be explained positively (somewhat) by the the on-going stock buybacks and acquisitions. The most troubling aspect is that PBI has a lease/finance division that leases big ticket items like planes, trucks, railcars. I can readily imagine a couple of airlines defaulting on their obligations. So many planes have been taken out of service already. So it's possible that PBI could be "stuck". Although this division is supposedly small, when I look at the asset side of the balance sheet, I see "finance receivables" ($1.8B) and "investment in leveraged assets ($1.4B). I realize there's plenty of postage equipment that's being financed. But still, if a couple of big jets (assuming these are the kinds of planes PBI's involved with) get turned back, THAT will hurt PBI. I'm guessing here-- I don't know how the loans are structured or how the risks might be hedged. (Rail car leasing business isn't doing well now either. Not sure about truckers, but CF - 15,000 employees - just went bk) That $1.4B expression "leveraged assets", just doesn't put me at ease. I'd really be more comfortable if PBI were not so diversified away from their primary business, the mail room arena. biz.yahoo.com