Delaware
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06-0495050
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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3001 Summer Street, Stamford, Connecticut
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06926
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(Address of principal executive offices)
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(Zip Code)
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(203) 356-5000
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(Registrant’s telephone number, including area code)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Page Number
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Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2018 and 2017
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Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2018 and 2017
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Condensed Consolidated Balance Sheets at June 30, 2018 and December 31, 2017
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Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2018 and 2017
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Three Months Ended June 30,
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Six Months Ended June 30,
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2018
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2017
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2018
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2017
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Revenue:
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Equipment sales
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$
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105,750
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$
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121,384
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$
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216,121
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$
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245,887
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Supplies
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55,457
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58,639
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115,450
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119,694
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Software
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91,702
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81,319
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167,996
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154,165
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Rentals
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91,809
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95,447
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186,435
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194,754
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Financing
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76,671
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83,653
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156,774
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169,398
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Support services
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72,171
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72,068
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145,194
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147,273
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Business services
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367,876
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217,903
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754,414
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442,422
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Total revenue
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861,436
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730,413
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1,742,384
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1,473,593
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Costs and expenses:
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Cost of equipment sales
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47,106
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51,506
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93,160
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96,122
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Cost of supplies
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15,738
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16,216
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32,685
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33,068
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Cost of software
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26,459
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23,361
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50,514
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46,515
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Cost of rentals
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21,078
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21,143
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45,132
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41,422
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Financing interest expense
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12,346
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12,843
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24,571
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25,817
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Cost of support services
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39,609
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41,772
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82,736
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83,421
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Cost of business services
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293,480
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153,063
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590,879
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303,906
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Selling, general and administrative
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282,456
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283,073
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577,894
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573,645
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Research and development
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31,073
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30,328
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61,395
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59,282
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Restructuring charges and asset impairments, net
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11,503
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25,990
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12,407
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27,639
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Other components of net pension and postretirement cost
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(2,499
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)
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1,267
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(4,218
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)
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2,723
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Interest expense, net
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29,623
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27,600
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60,476
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53,276
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Total costs and expenses
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807,972
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688,162
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1,627,631
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1,346,836
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Income from continuing operations before taxes
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53,464
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42,251
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114,753
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126,757
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Provision for income taxes
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6,458
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790
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22,721
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27,872
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Income from continuing operations
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47,006
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41,461
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92,032
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98,885
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Income from discontinued operations, net of tax
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1,208
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7,440
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9,695
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15,149
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Net income
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$
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48,214
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$
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48,901
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$
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101,727
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$
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114,034
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Basic earnings per share
(1)
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Continuing operations
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$
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0.25
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$
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0.22
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$
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0.49
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$
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0.53
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Discontinued operations
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0.01
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0.04
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0.05
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0.08
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Net income
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$
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0.26
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$
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0.26
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$
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0.54
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$
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0.61
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Diluted earnings per share
(1)
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Continuing operations
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$
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0.25
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$
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0.22
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$
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0.49
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$
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0.53
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Discontinued operations
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0.01
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0.04
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0.05
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0.08
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Net income
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$
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0.26
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$
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0.26
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$
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0.54
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$
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0.61
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Dividends declared per share of common stock
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$
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0.1875
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$
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0.1875
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$
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0.375
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$
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0.375
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Three Months Ended June 30,
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Six Months Ended June 30,
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2018
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2017
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2018
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2017
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Net income
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$
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48,214
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$
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48,901
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$
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101,727
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$
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114,034
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Other comprehensive income, net of tax:
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Foreign currency translation
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(44,584
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)
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46,791
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(29,073
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66,706
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Net unrealized (loss) gain on cash flow hedges, net of tax of $(78), $(120), $154 and $235, respectively
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(235
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)
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(196
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)
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251
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383
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Net unrealized (loss) gain on investment securities, net of tax of $(447), $758, $(1,813) and $1,102, respectively
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(1,305
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)
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1,291
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(5,296
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)
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1,876
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Adjustments to pension and postretirement plans, net of tax of $(304)
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—
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—
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—
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(1,482
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)
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Amortization of pension and postretirement costs, net of tax benefits of $2,564, $3,442, $5,368 and $6,956, respectively
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7,868
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6,624
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16,040
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13,335
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Other comprehensive (loss) income, net of tax
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(38,256
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)
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54,510
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(18,078
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)
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80,818
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Comprehensive income
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$
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9,958
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$
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103,411
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$
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83,649
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$
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194,852
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June 30, 2018
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December 31, 2017
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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689,870
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$
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1,009,021
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Short-term investments
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55,699
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48,988
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Accounts receivable (net of allowance of $13,515 and $14,786, respectively)
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408,703
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427,022
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Short-term finance receivables (net of allowance of $14,924 and $12,187, respectively)
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812,055
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828,003
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Inventories
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49,051
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40,769
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Current income taxes
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39,100
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58,439
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Other current assets and prepayments
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102,104
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74,589
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Assets of discontinued operations
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313,356
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334,848
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Total current assets
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2,469,938
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2,821,679
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Property, plant and equipment, net
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398,909
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373,503
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Rental property and equipment, net
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180,585
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183,956
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Long-term finance receivables (net of allowance of $6,420 and $6,446 respectively)
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597,302
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652,087
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Goodwill
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1,767,848
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1,774,645
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Intangible assets, net
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249,125
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272,186
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Noncurrent income taxes
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54,099
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59,909
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Other assets
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528,945
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540,750
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Total assets
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$
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6,246,751
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$
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6,678,715
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable and accrued liabilities
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$
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1,349,344
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$
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1,450,149
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Current income taxes
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5,686
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8,823
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Current portion of long-term debt
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334,999
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271,057
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Advance billings
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237,709
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257,766
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Liabilities of discontinued operations
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84,219
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72,808
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Total current liabilities
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2,011,957
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2,060,603
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Deferred taxes on income
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234,190
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234,643
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Tax uncertainties and other income tax liabilities
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105,803
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116,551
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Long-term debt
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3,237,810
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3,559,278
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Other noncurrent liabilities
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461,074
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519,079
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Total liabilities
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6,050,834
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6,490,154
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Commitments and contingencies (See Note 14)
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Stockholders’ equity:
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Cumulative preferred stock, $50 par value, 4% convertible
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1
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1
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Cumulative preference stock, no par value, $2.12 convertible
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415
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441
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Common stock, $1 par value (480,000,000 shares authorized; 323,337,912 shares issued)
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323,338
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323,338
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Additional paid-in capital
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122,732
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138,367
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Retained earnings
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5,248,991
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5,229,584
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Accumulated other comprehensive loss
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(810,251
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)
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(792,173
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)
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Treasury stock, at cost (136,104,630 and 136,734,174 shares, respectively)
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(4,689,309
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)
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(4,710,997
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)
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Total stockholders’ equity
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195,917
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|
188,561
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Total liabilities and stockholders’ equity
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$
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6,246,751
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$
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6,678,715
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Six Months Ended June 30,
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2018
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2017
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Cash flows from operating activities:
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Net income
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$
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101,727
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$
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114,034
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Income from discontinued operations
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(9,695
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)
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(15,149
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)
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Restructuring payments
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(27,528
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)
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(17,651
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)
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
|
101,862
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|
86,710
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Stock-based compensation
|
9,153
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|
12,531
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Restructuring charges and asset impairments, net
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12,407
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27,639
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Gain on sale of technology
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—
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(6,085
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)
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Changes in operating assets and liabilities, net of acquisitions/divestitures:
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Decrease in accounts receivable
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14,323
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|
|
58,263
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|
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Decrease in finance receivables
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60,563
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|
|
76,915
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|
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Increase in inventories
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(6,706
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)
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(3,762
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)
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Increase in other current assets and prepayments
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(33,041
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)
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(18,728
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)
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Decrease in accounts payable and accrued liabilities
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(47,118
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)
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(69,146
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)
|
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Increase (decrease) in current and non-current income taxes
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4,570
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(40,856
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)
|
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Decrease in advance billings
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(22,643
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)
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|
(22,972
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)
|
||
Other, net
|
(24,612
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)
|
|
(11,192
|
)
|
||
Net cash provided by operating activities - continuing operations
|
133,262
|
|
|
170,551
|
|
||
Net cash provided by operating activities - discontinued operations
|
41,772
|
|
|
14,096
|
|
||
Net cash provided by operating activities
|
175,034
|
|
|
184,647
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
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Purchases of available-for-sale securities
|
(48,303
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)
|
|
(70,405
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)
|
||
Proceeds from sales/maturities of available-for-sale securities
|
36,157
|
|
|
61,913
|
|
||
Net activity from short-term and other investments
|
10,959
|
|
|
(131,303
|
)
|
||
Capital expenditures
|
(100,022
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)
|
|
(75,844
|
)
|
||
Acquisition of businesses, net of cash acquired
|
(2,407
|
)
|
|
(7,889
|
)
|
||
Change in reserve account deposits
|
5,959
|
|
|
2,514
|
|
||
Other investing activities
|
(2,500
|
)
|
|
(3,000
|
)
|
||
Net cash used in investing activities - continuing operations
|
(100,157
|
)
|
|
(224,014
|
)
|
||
Net cash used in investing activities - discontinued operations
|
(1,169
|
)
|
|
(777
|
)
|
||
Net cash used in investing activities
|
(101,326
|
)
|
|
(224,791
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from the issuance of long-term debt
|
—
|
|
|
395,772
|
|
||
Principal payments of long-term debt
|
(260,099
|
)
|
|
(229,323
|
)
|
||
Dividends paid to stockholders
|
(70,113
|
)
|
|
(69,527
|
)
|
||
Other financing activities
|
(49,606
|
)
|
|
(5,551
|
)
|
||
Net cash (used in) provided by financing activities
|
(379,818
|
)
|
|
91,371
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(13,041
|
)
|
|
24,815
|
|
||
(Decrease) increase in cash and cash equivalents
|
(319,151
|
)
|
|
76,042
|
|
||
Cash and cash equivalents at beginning of period
|
1,009,021
|
|
|
764,522
|
|
||
Cash and cash equivalents at end of period
|
$
|
689,870
|
|
|
$
|
840,564
|
|
|
|
|
|
||||
Cash interest paid
|
$
|
89,339
|
|
|
$
|
82,405
|
|
Cash income tax payments, net of refunds
|
$
|
19,244
|
|
|
$
|
78,649
|
|
•
|
The write-off of previously capitalized deferred marketing costs that did not meet the criteria for capitalization under ASC 606.
|
•
|
The capitalization of certain costs to obtain a contract, primarily sales commissions, that are permitted to be capitalized under ASC 606.
|
•
|
The establishment of deferred revenue related to the early renewal of software and data license contracts with terms beginning in 2018, as ASC 606 requires revenue recognition at the commencement of the license term.
|
•
|
The write-off of deferred revenues and related costs for certain software licenses bundled with a lease that are recognized at time of delivery under ASC 606.
|
•
|
The write-off of advance billings related to certain software data products that are recognized upon delivery under ASC 606.
|
|
Three months ended June 30, 2018
|
|
Six months ended June 30, 2018
|
||||||||||||||||||||
|
As reported
|
|
Prior guidance
|
|
Total increase (decrease)
|
|
As reported
|
|
Prior guidance
|
|
Total increase (decrease)
|
||||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total revenue
|
$
|
861,436
|
|
|
$
|
852,781
|
|
|
$
|
8,655
|
|
|
$
|
1,742,384
|
|
|
$
|
1,724,060
|
|
|
$
|
18,324
|
|
Equipment sales
|
$
|
105,750
|
|
|
$
|
106,301
|
|
|
$
|
(551
|
)
|
|
$
|
216,121
|
|
|
$
|
217,533
|
|
|
$
|
(1,412
|
)
|
Software
|
$
|
91,702
|
|
|
$
|
82,054
|
|
|
$
|
9,648
|
|
|
$
|
167,996
|
|
|
$
|
147,329
|
|
|
$
|
20,667
|
|
Business services
|
$
|
367,876
|
|
|
$
|
368,318
|
|
|
$
|
(442
|
)
|
|
$
|
754,414
|
|
|
$
|
755,345
|
|
|
$
|
(931
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total costs and expenses
|
$
|
807,972
|
|
|
$
|
810,342
|
|
|
$
|
(2,370
|
)
|
|
$
|
1,627,631
|
|
|
$
|
1,629,841
|
|
|
$
|
(2,210
|
)
|
Cost of equipment sales
|
$
|
47,106
|
|
|
$
|
47,035
|
|
|
$
|
71
|
|
|
$
|
93,160
|
|
|
$
|
93,219
|
|
|
$
|
(59
|
)
|
Cost of software
|
$
|
26,459
|
|
|
$
|
25,769
|
|
|
$
|
690
|
|
|
$
|
50,514
|
|
|
$
|
48,542
|
|
|
$
|
1,972
|
|
Selling, general and administrative
|
$
|
282,456
|
|
|
$
|
285,587
|
|
|
$
|
(3,131
|
)
|
|
$
|
577,894
|
|
|
$
|
582,017
|
|
|
$
|
(4,123
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations before taxes
|
$
|
53,464
|
|
|
$
|
42,439
|
|
|
$
|
11,025
|
|
|
$
|
114,753
|
|
|
$
|
94,221
|
|
|
$
|
20,532
|
|
Provision for income taxes
|
$
|
6,458
|
|
|
$
|
3,640
|
|
|
$
|
2,818
|
|
|
$
|
22,721
|
|
|
$
|
17,434
|
|
|
$
|
5,287
|
|
Net income from continuing operations
|
$
|
47,006
|
|
|
$
|
38,799
|
|
|
$
|
8,207
|
|
|
$
|
92,032
|
|
|
$
|
76,787
|
|
|
$
|
15,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings per share attributable to common stockholders - continuing operations
|
$
|
0.25
|
|
|
$
|
0.21
|
|
|
$
|
0.04
|
|
|
$
|
0.49
|
|
|
$
|
0.41
|
|
|
$
|
0.08
|
|
Diluted earnings per share attributable to common stockholders - continuing operations
|
$
|
0.25
|
|
|
$
|
0.22
|
|
|
$
|
0.03
|
|
|
$
|
0.49
|
|
|
$
|
0.41
|
|
|
$
|
0.08
|
|
|
June 30, 2018
|
||||||||||
|
As reported
|
|
Prior guidance
|
|
Total increase (decrease)
|
||||||
Balance Sheet
|
|
|
|
|
|
||||||
Total Assets
|
$
|
6,246,751
|
|
|
$
|
6,250,943
|
|
|
$
|
(4,192
|
)
|
Accounts receivable
|
$
|
408,703
|
|
|
$
|
407,204
|
|
|
$
|
1,499
|
|
Current income taxes
|
$
|
39,100
|
|
|
$
|
39,298
|
|
|
$
|
(198
|
)
|
Other current assets and prepayments
|
$
|
102,104
|
|
|
$
|
102,760
|
|
|
$
|
(656
|
)
|
Assets of discontinued operations
|
$
|
313,356
|
|
|
$
|
312,922
|
|
|
$
|
434
|
|
Noncurrent income taxes
|
$
|
54,099
|
|
|
$
|
54,429
|
|
|
$
|
(330
|
)
|
Other assets
|
$
|
528,945
|
|
|
$
|
533,886
|
|
|
$
|
(4,941
|
)
|
|
|
|
|
|
|
||||||
Total Liabilities
|
$
|
6,050,834
|
|
|
$
|
6,062,221
|
|
|
$
|
(11,387
|
)
|
Accounts payable and accrued liabilities
|
$
|
1,349,344
|
|
|
$
|
1,347,837
|
|
|
$
|
1,507
|
|
Current income taxes
|
$
|
5,686
|
|
|
$
|
43
|
|
|
$
|
5,643
|
|
Advance billings
|
$
|
237,709
|
|
|
$
|
250,948
|
|
|
$
|
(13,239
|
)
|
Liabilities of discontinued operations
|
$
|
84,219
|
|
|
$
|
84,132
|
|
|
$
|
87
|
|
Deferred taxes on income
|
$
|
234,190
|
|
|
$
|
238,539
|
|
|
$
|
(4,349
|
)
|
Other noncurrent liabilities
|
$
|
461,074
|
|
|
$
|
462,110
|
|
|
$
|
(1,036
|
)
|
|
|
|
|
|
|
||||||
Total Stockholders' equity
|
$
|
195,917
|
|
|
$
|
188,722
|
|
|
$
|
7,195
|
|
Retained earnings
|
$
|
5,248,991
|
|
|
$
|
5,241,824
|
|
|
$
|
7,167
|
|
Accumulated other comprehensive loss
|
$
|
(810,251
|
)
|
|
$
|
(810,279
|
)
|
|
$
|
28
|
|
•
|
Higher accounts receivable, net and accounts payable and accrued liabilities due to reserves for refunds to customers that were recorded in accounts receivable, net under previous guidance.
|
•
|
Lower other assets primarily due to the write-off of deferred marketing costs at January 1, 2018, offset by the capitalization of certain costs to obtain a contract, including sales commissions and other contract costs.
|
•
|
Lower advance billings and other noncurrent liabilities due to the write-off of deferred revenue from software licenses bundled with leases and data products, which are now recognized at time of delivery rather than ratably under previous guidance.
|
•
|
Costs incurred to obtain a contract with a customer are expensed if the amortization period is one year or less.
|
•
|
With the exception of certain services contracts, all taxes assessed by government authorities, such as sales and use taxes, value added taxes and excise taxes, are excluded from the transaction price.
|
•
|
The transaction price is not adjusted for a significant financing component when a performance obligation is satisfied within one year.
|
•
|
Revenue is recognized based on the amount billable to the customer when that amount corresponds to the value transferred to the customer.
|
•
|
Shipping and handling activities are accounted for as a fulfillment activity rather than a separate performance obligation.
|
•
|
We reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price.
|
|
Three months ended June 30, 2018
|
|||||||||||||||||||||||
|
Global Ecommerce
|
Presort Services
|
North America Mailing
|
International Mailing
|
Software Solutions
|
Total Revenue from sales and services (ASC 606)
|
Revenue from leasing transactions and financing
|
Total Consolidated Revenue
|
||||||||||||||||
Equipment sales
|
$
|
—
|
|
$
|
—
|
|
$
|
15,303
|
|
$
|
11,654
|
|
$
|
—
|
|
$
|
26,957
|
|
$
|
78,793
|
|
$
|
105,750
|
|
Supplies
|
—
|
|
—
|
|
36,271
|
|
19,186
|
|
—
|
|
55,457
|
|
—
|
|
55,457
|
|
||||||||
Software
|
—
|
|
—
|
|
—
|
|
—
|
|
91,702
|
|
91,702
|
|
—
|
|
91,702
|
|
||||||||
Rentals
|
—
|
|
—
|
|
5,121
|
|
2,139
|
|
—
|
|
7,260
|
|
84,549
|
|
91,809
|
|
||||||||
Financing
|
—
|
|
—
|
|
15,714
|
|
2,866
|
|
—
|
|
18,580
|
|
58,091
|
|
76,671
|
|
||||||||
Support services
|
—
|
|
—
|
|
50,902
|
|
21,269
|
|
—
|
|
72,171
|
|
|
72,171
|
|
|||||||||
Business services
|
239,100
|
|
122,730
|
|
4,453
|
|
1,593
|
|
—
|
|
367,876
|
|
—
|
|
367,876
|
|
||||||||
|
$
|
239,100
|
|
$
|
122,730
|
|
$
|
127,764
|
|
$
|
58,707
|
|
$
|
91,702
|
|
$
|
640,003
|
|
$
|
221,433
|
|
$
|
861,436
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue from sales and services (ASC 606)
|
$
|
239,100
|
|
$
|
122,730
|
|
$
|
127,764
|
|
$
|
58,707
|
|
$
|
91,702
|
|
$
|
640,003
|
|
$
|
—
|
|
$
|
640,003
|
|
Revenue from leasing transactions and financing
|
—
|
|
—
|
|
186,782
|
|
34,651
|
|
—
|
|
—
|
|
221,433
|
|
221,433
|
|
||||||||
Total revenue
|
$
|
239,100
|
|
$
|
122,730
|
|
$
|
314,546
|
|
$
|
93,358
|
|
$
|
91,702
|
|
$
|
640,003
|
|
$
|
221,433
|
|
$
|
861,436
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Timing of revenue recognition (ASC 606)
|
|
|
|
|
|
|
||||||||||||||||||
Products/services transferred at a point in time
|
$
|
—
|
|
$
|
—
|
|
$
|
51,574
|
|
$
|
30,840
|
|
$
|
38,963
|
|
$
|
121,377
|
|
|
|
||||
Products/services transferred over time
|
239,100
|
|
122,730
|
|
76,190
|
|
27,867
|
|
52,739
|
|
518,626
|
|
|
|
||||||||||
Total revenue
|
$
|
239,100
|
|
$
|
122,730
|
|
$
|
127,764
|
|
$
|
58,707
|
|
$
|
91,702
|
|
$
|
640,003
|
|
|
|
|
Six months ended June 30, 2018
|
|||||||||||||||||||||||
|
Global Ecommerce
|
Presort Services
|
North America Mailing
|
International Mailing
|
Software Solutions
|
Total Revenue from sales and services (ASC 606)
|
Revenue from leasing transactions and financing
|
Total Consolidated Revenue
|
||||||||||||||||
Equipment sales
|
$
|
—
|
|
$
|
—
|
|
$
|
32,449
|
|
$
|
25,018
|
|
$
|
—
|
|
$
|
57,467
|
|
$
|
158,654
|
|
$
|
216,121
|
|
Supplies
|
—
|
|
—
|
|
75,223
|
|
40,227
|
|
—
|
|
115,450
|
|
—
|
|
115,450
|
|
||||||||
Software
|
—
|
|
—
|
|
—
|
|
—
|
|
167,996
|
|
167,996
|
|
—
|
|
167,996
|
|
||||||||
Rentals
|
—
|
|
—
|
|
10,832
|
|
4,305
|
|
—
|
|
15,137
|
|
171,298
|
|
186,435
|
|
||||||||
Financing
|
—
|
|
—
|
|
32,290
|
|
5,842
|
|
—
|
|
38,132
|
|
118,642
|
|
156,774
|
|
||||||||
Support services
|
—
|
|
—
|
|
101,647
|
|
43,547
|
|
—
|
|
145,194
|
|
—
|
|
145,194
|
|
||||||||
Business services
|
485,690
|
|
257,188
|
|
8,255
|
|
3,281
|
|
—
|
|
754,414
|
|
—
|
|
754,414
|
|
||||||||
|
$
|
485,690
|
|
$
|
257,188
|
|
$
|
260,696
|
|
$
|
122,220
|
|
$
|
167,996
|
|
$
|
1,293,790
|
|
$
|
448,594
|
|
$
|
1,742,384
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue from sales and services (ASC 606)
|
$
|
485,690
|
|
$
|
257,188
|
|
$
|
260,696
|
|
$
|
122,220
|
|
$
|
167,996
|
|
$
|
1,293,790
|
|
$
|
—
|
|
$
|
1,293,790
|
|
Revenue from leasing transactions and financing
|
—
|
|
—
|
|
379,419
|
|
69,175
|
|
—
|
|
—
|
|
448,594
|
|
448,594
|
|
||||||||
Total revenue
|
$
|
485,690
|
|
$
|
257,188
|
|
$
|
640,115
|
|
$
|
191,395
|
|
$
|
167,996
|
|
$
|
1,293,790
|
|
$
|
448,594
|
|
$
|
1,742,384
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Timing of revenue recognition (ASC 606)
|
|
|
|
|
|
|
||||||||||||||||||
Products/services transferred at a point in time
|
$
|
—
|
|
$
|
—
|
|
$
|
107,672
|
|
$
|
65,245
|
|
$
|
65,020
|
|
$
|
237,937
|
|
|
|
||||
Products/services transferred over time
|
485,690
|
|
257,188
|
|
153,024
|
|
56,975
|
|
102,976
|
|
1,055,853
|
|
|
|
||||||||||
Total revenue
|
$
|
485,690
|
|
$
|
257,188
|
|
$
|
260,696
|
|
$
|
122,220
|
|
$
|
167,996
|
|
$
|
1,293,790
|
|
|
|
|
June 30, 2018
|
|
January 1, 2018
(1)
|
|
Total increase (decrease)
|
||||||
Contracts assets, current
|
$
|
8,213
|
|
|
$
|
5,075
|
|
|
$
|
3,138
|
|
Contracts assets, noncurrent
|
$
|
4,006
|
|
|
$
|
648
|
|
|
$
|
3,358
|
|
Advance billings, current
|
$
|
186,778
|
|
|
$
|
209,098
|
|
|
$
|
(22,320
|
)
|
Advance billings, noncurrent
|
$
|
14,658
|
|
|
$
|
17,765
|
|
|
$
|
(3,107
|
)
|
|
Total
|
|
Remainder of 2018
|
|
2019
|
|
2020-2025
|
||||||||
North America Mailing
(1)
|
$
|
233,955
|
|
|
$
|
57,793
|
|
|
$
|
89,529
|
|
|
$
|
86,633
|
|
International Mailing
(1)
|
117,562
|
|
|
29,432
|
|
|
36,415
|
|
|
51,715
|
|
||||
Software Solutions
(2)
|
102,383
|
|
|
41,674
|
|
|
36,120
|
|
|
24,589
|
|
||||
Total
|
$
|
453,900
|
|
|
$
|
128,899
|
|
|
$
|
162,064
|
|
|
$
|
162,937
|
|
|
Revenue
|
||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Global Ecommerce
|
$
|
239,100
|
|
|
$
|
94,506
|
|
|
$
|
485,690
|
|
|
$
|
182,658
|
|
Presort Services
|
122,730
|
|
|
118,452
|
|
|
257,188
|
|
|
251,129
|
|
||||
Commerce Services
|
361,830
|
|
|
212,958
|
|
|
742,878
|
|
|
433,787
|
|
||||
North America Mailing
|
314,546
|
|
|
340,949
|
|
|
640,115
|
|
|
696,902
|
|
||||
International Mailing
|
93,358
|
|
|
95,425
|
|
|
191,395
|
|
|
188,624
|
|
||||
Small & Medium Business Solutions
|
407,904
|
|
|
436,374
|
|
|
831,510
|
|
|
885,526
|
|
||||
Software Solutions
|
91,702
|
|
|
81,081
|
|
|
167,996
|
|
|
154,280
|
|
||||
Total revenue
|
$
|
861,436
|
|
|
$
|
730,413
|
|
|
$
|
1,742,384
|
|
|
$
|
1,473,593
|
|
|
EBIT
|
||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Global Ecommerce
|
$
|
(5,993
|
)
|
|
$
|
(4,030
|
)
|
|
$
|
(13,704
|
)
|
|
$
|
(8,300
|
)
|
Presort Services
|
12,565
|
|
|
19,270
|
|
|
39,591
|
|
|
49,987
|
|
||||
Commerce Services
|
6,572
|
|
|
15,240
|
|
|
25,887
|
|
|
41,687
|
|
||||
North America Mailing
|
115,193
|
|
|
120,797
|
|
|
234,763
|
|
|
262,041
|
|
||||
International Mailing
|
13,215
|
|
|
14,020
|
|
|
29,246
|
|
|
27,430
|
|
||||
Small & Medium Business Solutions
|
128,408
|
|
|
134,817
|
|
|
264,009
|
|
|
289,471
|
|
||||
Software Solutions
|
18,433
|
|
|
5,091
|
|
|
20,925
|
|
|
6,397
|
|
||||
Total segment EBIT
|
153,413
|
|
|
155,148
|
|
|
310,821
|
|
|
337,555
|
|
||||
Reconciling items:
|
|
|
|
|
|
|
|
|
|
||||||
Unallocated corporate expenses
|
(46,477
|
)
|
|
(52,549
|
)
|
|
(97,561
|
)
|
|
(110,151
|
)
|
||||
Interest, net
|
(41,969
|
)
|
|
(40,443
|
)
|
|
(85,047
|
)
|
|
(79,093
|
)
|
||||
Restructuring charges and asset impairments, net
|
(11,503
|
)
|
|
(25,990
|
)
|
|
(12,407
|
)
|
|
(27,639
|
)
|
||||
Gain from the sale of technology
|
—
|
|
|
6,085
|
|
|
—
|
|
|
6,085
|
|
||||
Transaction costs
|
—
|
|
|
—
|
|
|
(1,053
|
)
|
|
—
|
|
||||
Income from continuing operations before income taxes
|
53,464
|
|
|
42,251
|
|
|
114,753
|
|
|
126,757
|
|
||||
Provision for income taxes
|
6,458
|
|
|
790
|
|
|
22,721
|
|
|
27,872
|
|
||||
Income from discontinued operations, net of tax
|
1,208
|
|
|
7,440
|
|
|
9,695
|
|
|
15,149
|
|
||||
Net income
|
$
|
48,214
|
|
|
$
|
48,901
|
|
|
$
|
101,727
|
|
|
$
|
114,034
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
$
|
89,201
|
|
|
$
|
90,958
|
|
|
$
|
191,435
|
|
|
$
|
184,418
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings from discontinued operations
|
$
|
8,278
|
|
|
$
|
11,602
|
|
|
$
|
21,620
|
|
|
$
|
23,645
|
|
Transaction costs
|
(7,238
|
)
|
|
—
|
|
|
(8,777
|
)
|
|
—
|
|
||||
Income from discontinued operations before taxes
|
1,040
|
|
|
11,602
|
|
|
12,843
|
|
|
23,645
|
|
||||
Tax (benefit) provision
|
(168
|
)
|
|
4,162
|
|
|
3,148
|
|
|
8,496
|
|
||||
Income from discontinued operations, net of tax
|
$
|
1,208
|
|
|
$
|
7,440
|
|
|
$
|
9,695
|
|
|
$
|
15,149
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Accounts receivable, net
|
$
|
69,924
|
|
|
$
|
97,402
|
|
Inventories
|
54,808
|
|
|
48,910
|
|
||
Other current assets and prepayments
|
6,653
|
|
|
3,365
|
|
||
Property, plant and equipment, net
|
3,185
|
|
|
5,541
|
|
||
Rental property and equipment, net
|
1,041
|
|
|
1,786
|
|
||
Goodwill
|
176,501
|
|
|
177,799
|
|
||
Other assets
|
1,244
|
|
|
45
|
|
||
Total assets of discontinued operations
|
$
|
313,356
|
|
|
$
|
334,848
|
|
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
34,244
|
|
|
$
|
36,592
|
|
Advance billings
|
44,694
|
|
|
30,607
|
|
||
Other noncurrent liabilities
|
5,281
|
|
|
5,609
|
|
||
Total liabilities of discontinued operations
|
$
|
84,219
|
|
|
$
|
72,808
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income from continuing operations
|
$
|
47,006
|
|
|
$
|
41,461
|
|
|
$
|
92,032
|
|
|
$
|
98,885
|
|
Income from discontinued operations, net of tax
|
1,208
|
|
|
7,440
|
|
|
9,695
|
|
|
15,149
|
|
||||
Net income (numerator for diluted EPS)
|
48,214
|
|
|
48,901
|
|
|
101,727
|
|
|
114,034
|
|
||||
Less: Preference stock dividend
|
8
|
|
|
10
|
|
|
16
|
|
|
19
|
|
||||
Income attributable to common stockholders (numerator for basic EPS)
|
$
|
48,206
|
|
|
$
|
48,891
|
|
|
$
|
101,711
|
|
|
$
|
114,015
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares used in basic EPS
|
187,180
|
|
|
186,333
|
|
|
187,004
|
|
|
186,136
|
|
||||
Effect of dilutive shares
|
934
|
|
|
1,044
|
|
|
1,053
|
|
|
809
|
|
||||
Weighted-average shares used in diluted EPS
|
188,114
|
|
|
187,377
|
|
|
188,057
|
|
|
186,945
|
|
||||
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations
|
$
|
0.25
|
|
|
$
|
0.22
|
|
|
$
|
0.49
|
|
|
$
|
0.53
|
|
Discontinued operations
|
0.01
|
|
|
0.04
|
|
|
0.05
|
|
|
0.08
|
|
||||
Net Income
|
$
|
0.26
|
|
|
$
|
0.26
|
|
|
$
|
0.54
|
|
|
$
|
0.61
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations
|
$
|
0.25
|
|
|
$
|
0.22
|
|
|
$
|
0.49
|
|
|
$
|
0.53
|
|
Discontinued operations
|
0.01
|
|
|
0.04
|
|
|
0.05
|
|
|
0.08
|
|
||||
Net Income
|
$
|
0.26
|
|
|
$
|
0.26
|
|
|
$
|
0.54
|
|
|
$
|
0.61
|
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive shares not used in calculating diluted weighted-average shares
|
12,453
|
|
|
9,916
|
|
|
11,959
|
|
|
11,379
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Raw materials
|
$
|
13,502
|
|
|
$
|
11,767
|
|
Supplies and service parts
|
21,822
|
|
|
21,475
|
|
||
Finished products
|
19,461
|
|
|
13,261
|
|
||
Inventory at FIFO cost
|
54,785
|
|
|
46,503
|
|
||
Excess of FIFO cost over LIFO cost
|
(5,734
|
)
|
|
(5,734
|
)
|
||
Total inventory, net
|
$
|
49,051
|
|
|
$
|
40,769
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
North America
|
|
International
|
|
Total
|
|
North America
|
|
International
|
|
Total
|
||||||||||||
Sales-type lease receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gross finance receivables
|
$
|
1,004,241
|
|
|
$
|
273,118
|
|
|
$
|
1,277,359
|
|
|
$
|
1,023,549
|
|
|
$
|
292,059
|
|
|
$
|
1,315,608
|
|
Unguaranteed residual values
|
62,358
|
|
|
13,391
|
|
|
75,749
|
|
|
74,093
|
|
|
14,202
|
|
|
88,295
|
|
||||||
Unearned income
|
(209,870
|
)
|
|
(58,527
|
)
|
|
(268,397
|
)
|
|
(216,720
|
)
|
|
(62,325
|
)
|
|
(279,045
|
)
|
||||||
Allowance for credit losses
|
(11,129
|
)
|
|
(2,406
|
)
|
|
(13,535
|
)
|
|
(7,721
|
)
|
|
(2,794
|
)
|
|
(10,515
|
)
|
||||||
Net investment in sales-type lease receivables
|
845,600
|
|
|
225,576
|
|
|
1,071,176
|
|
|
873,201
|
|
|
241,142
|
|
|
1,114,343
|
|
||||||
Loan receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loan receivables
|
313,049
|
|
|
32,941
|
|
|
345,990
|
|
|
339,373
|
|
|
34,492
|
|
|
373,865
|
|
||||||
Allowance for credit losses
|
(6,869
|
)
|
|
(940
|
)
|
|
(7,809
|
)
|
|
(7,098
|
)
|
|
(1,020
|
)
|
|
(8,118
|
)
|
||||||
Net investment in loan receivables
|
306,180
|
|
|
32,001
|
|
|
338,181
|
|
|
332,275
|
|
|
33,472
|
|
|
365,747
|
|
||||||
Net investment in finance receivables
|
$
|
1,151,780
|
|
|
$
|
257,577
|
|
|
$
|
1,409,357
|
|
|
$
|
1,205,476
|
|
|
$
|
274,614
|
|
|
$
|
1,480,090
|
|
|
Sales-type Lease Receivables
|
|
Loan Receivables
|
|
|
||||||||||||||
|
North
America
|
|
International
|
|
North
America
|
|
International
|
|
Total
|
||||||||||
Balance at January 1, 2018
|
$
|
7,721
|
|
|
$
|
2,794
|
|
|
$
|
7,098
|
|
|
$
|
1,020
|
|
|
$
|
18,633
|
|
Amounts charged to expense
|
5,946
|
|
|
545
|
|
|
7,008
|
|
|
250
|
|
|
13,749
|
|
|||||
Write-offs and other
|
(2,538
|
)
|
|
(933
|
)
|
|
(7,237
|
)
|
|
(330
|
)
|
|
(11,038
|
)
|
|||||
Balance at June 30, 2018
|
$
|
11,129
|
|
|
$
|
2,406
|
|
|
$
|
6,869
|
|
|
$
|
940
|
|
|
$
|
21,344
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Sales-type Lease Receivables
|
|
Loan Receivables
|
|
|
||||||||||||||
|
North
America
|
|
International
|
|
North
America
|
|
International
|
|
Total
|
||||||||||
Balance at January 1, 2017
|
$
|
8,247
|
|
|
$
|
2,647
|
|
|
$
|
8,517
|
|
|
$
|
1,089
|
|
|
$
|
20,500
|
|
Amounts charged to expense
|
5,182
|
|
|
466
|
|
|
2,891
|
|
|
450
|
|
|
8,989
|
|
|||||
Write-offs and other
|
(4,973
|
)
|
|
(617
|
)
|
|
(3,905
|
)
|
|
(382
|
)
|
|
(9,877
|
)
|
|||||
Balance at June 30, 2017
|
$
|
8,456
|
|
|
$
|
2,496
|
|
|
$
|
7,503
|
|
|
$
|
1,157
|
|
|
$
|
19,612
|
|
|
June 30, 2018
|
||||||||||||||||||
|
Sales-type Lease Receivables
|
|
Loan Receivables
|
|
|
||||||||||||||
|
North
America
|
|
International
|
|
North
America
|
|
International
|
|
Total
|
||||||||||
1 - 90 days
|
$
|
961,356
|
|
|
$
|
266,146
|
|
|
$
|
305,116
|
|
|
$
|
32,706
|
|
|
$
|
1,565,324
|
|
> 90 days
|
42,885
|
|
|
6,972
|
|
|
7,933
|
|
|
235
|
|
|
58,025
|
|
|||||
Total
|
$
|
1,004,241
|
|
|
$
|
273,118
|
|
|
$
|
313,049
|
|
|
$
|
32,941
|
|
|
$
|
1,623,349
|
|
Past due amounts > 90 days
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Still accruing interest
|
$
|
6,297
|
|
|
$
|
1,672
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,969
|
|
Not accruing interest
|
36,588
|
|
|
5,300
|
|
|
7,933
|
|
|
235
|
|
|
50,056
|
|
|||||
Total
|
$
|
42,885
|
|
|
$
|
6,972
|
|
|
$
|
7,933
|
|
|
$
|
235
|
|
|
$
|
58,025
|
|
|
December 31, 2017
|
||||||||||||||||||
|
Sales-type Lease Receivables
|
|
Loan Receivables
|
|
|
||||||||||||||
|
North
America
|
|
International
|
|
North
America
|
|
International
|
|
Total
|
||||||||||
1 - 90 days
|
$
|
971,002
|
|
|
$
|
286,170
|
|
|
$
|
330,503
|
|
|
$
|
34,239
|
|
|
$
|
1,621,914
|
|
> 90 days
|
52,547
|
|
|
5,889
|
|
|
8,870
|
|
|
253
|
|
|
67,559
|
|
|||||
Total
|
$
|
1,023,549
|
|
|
$
|
292,059
|
|
|
$
|
339,373
|
|
|
$
|
34,492
|
|
|
$
|
1,689,473
|
|
Past due amounts > 90 days
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Still accruing interest
|
$
|
10,807
|
|
|
$
|
1,738
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,545
|
|
Not accruing interest
|
41,740
|
|
|
4,151
|
|
|
8,870
|
|
|
253
|
|
|
55,014
|
|
|||||
Total
|
$
|
52,547
|
|
|
$
|
5,889
|
|
|
$
|
8,870
|
|
|
$
|
253
|
|
|
$
|
67,559
|
|
•
|
Low risk accounts are companies with very good credit scores and are considered to approximate the top
30%
of all commercial borrowers.
|
•
|
Medium risk accounts are companies with average to good credit scores and are considered to approximate the middle
40%
of all commercial borrowers.
|
•
|
High risk accounts are companies with poor credit scores, are delinquent or are at risk of becoming delinquent and are considered to approximate the bottom
30%
of all commercial borrowers.
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Sales-type lease receivables
|
|
|
|
|
|
||
Low
|
$
|
817,554
|
|
|
$
|
819,776
|
|
Medium
|
130,175
|
|
|
148,000
|
|
||
High
|
20,663
|
|
|
21,728
|
|
||
Not Scored
|
35,849
|
|
|
34,045
|
|
||
Total
|
$
|
1,004,241
|
|
|
$
|
1,023,549
|
|
Loan receivables
|
|
|
|
|
|
||
Low
|
$
|
244,570
|
|
|
$
|
262,646
|
|
Medium
|
50,711
|
|
|
56,744
|
|
||
High
|
5,593
|
|
|
6,791
|
|
||
Not Scored
|
12,175
|
|
|
13,192
|
|
||
Total
|
$
|
313,049
|
|
|
$
|
339,373
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Customer relationships
|
$
|
482,092
|
|
|
$
|
(265,904
|
)
|
|
$
|
216,188
|
|
|
$
|
504,716
|
|
|
$
|
(271,066
|
)
|
|
$
|
233,650
|
|
Software & technology
|
166,100
|
|
|
(141,338
|
)
|
|
24,762
|
|
|
167,122
|
|
|
(138,724
|
)
|
|
28,398
|
|
||||||
Trademarks & other
|
40,403
|
|
|
(32,228
|
)
|
|
8,175
|
|
|
40,649
|
|
|
(30,511
|
)
|
|
10,138
|
|
||||||
Total intangible assets
|
$
|
688,595
|
|
|
$
|
(439,470
|
)
|
|
$
|
249,125
|
|
|
$
|
712,487
|
|
|
$
|
(440,301
|
)
|
|
$
|
272,186
|
|
|
December 31, 2017
|
|
Acquisitions
|
|
Other
(1)
|
|
June 30,
2018 |
||||||||
Global Ecommerce
|
$
|
602,461
|
|
|
$
|
—
|
|
|
$
|
(653
|
)
|
|
$
|
601,808
|
|
Presort Services
|
204,781
|
|
|
2,684
|
|
|
—
|
|
|
207,465
|
|
||||
Commerce Services
|
807,242
|
|
|
2,684
|
|
|
(653
|
)
|
|
809,273
|
|
||||
North America Mailing
|
368,905
|
|
|
—
|
|
|
(354
|
)
|
|
368,551
|
|
||||
International Mailing
|
158,203
|
|
|
—
|
|
|
(5,784
|
)
|
|
152,419
|
|
||||
Small & Medium Business Solutions
|
527,108
|
|
|
—
|
|
|
(6,138
|
)
|
|
520,970
|
|
||||
Software Solutions
|
440,295
|
|
|
—
|
|
|
(2,690
|
)
|
|
437,605
|
|
||||
Total goodwill
|
$
|
1,774,645
|
|
|
$
|
2,684
|
|
|
$
|
(9,481
|
)
|
|
$
|
1,767,848
|
|
Level 1
–
|
Unadjusted quoted prices in active markets for identical assets and liabilities.
|
Level 2
–
|
Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
Level 3
–
|
Unobservable inputs that are supported by little or no market activity, may be derived from internally developed methodologies based on management’s best estimate of fair value and that are significant to the fair value of the asset or liability.
|
|
June 30, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds / commercial paper
|
$
|
114,665
|
|
|
$
|
328,296
|
|
|
$
|
—
|
|
|
$
|
442,961
|
|
Equity securities
|
—
|
|
|
24,637
|
|
|
—
|
|
|
24,637
|
|
||||
Commingled fixed income securities
|
1,549
|
|
|
20,795
|
|
|
—
|
|
|
22,344
|
|
||||
Government and related securities
|
123,239
|
|
|
16,429
|
|
|
—
|
|
|
139,668
|
|
||||
Corporate debt securities
|
—
|
|
|
71,078
|
|
|
—
|
|
|
71,078
|
|
||||
Mortgage-backed / asset-backed securities
|
—
|
|
|
165,835
|
|
|
—
|
|
|
165,835
|
|
||||
Derivatives
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap
|
—
|
|
|
824
|
|
|
—
|
|
|
824
|
|
||||
Foreign exchange contracts
|
—
|
|
|
2,673
|
|
|
—
|
|
|
2,673
|
|
||||
Total assets
|
$
|
239,453
|
|
|
$
|
630,567
|
|
|
$
|
—
|
|
|
$
|
870,020
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
(178
|
)
|
|
$
|
—
|
|
|
$
|
(178
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(178
|
)
|
|
$
|
—
|
|
|
$
|
(178
|
)
|
|
December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds / commercial paper
|
$
|
143,349
|
|
|
$
|
542,568
|
|
|
$
|
—
|
|
|
$
|
685,917
|
|
Equity securities
|
—
|
|
|
40,717
|
|
|
—
|
|
|
40,717
|
|
||||
Commingled fixed income securities
|
1,569
|
|
|
4,516
|
|
|
—
|
|
|
6,085
|
|
||||
Government and related securities
|
116,041
|
|
|
18,587
|
|
|
—
|
|
|
134,628
|
|
||||
Corporate debt securities
|
—
|
|
|
75,109
|
|
|
—
|
|
|
75,109
|
|
||||
Mortgage-backed / asset-backed securities
|
—
|
|
|
158,202
|
|
|
—
|
|
|
158,202
|
|
||||
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap
|
—
|
|
|
1,776
|
|
|
—
|
|
|
1,776
|
|
||||
Foreign exchange contracts
|
—
|
|
|
122
|
|
|
—
|
|
|
122
|
|
||||
Total assets
|
$
|
260,959
|
|
|
$
|
841,597
|
|
|
$
|
—
|
|
|
$
|
1,102,556
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
(335
|
)
|
|
$
|
—
|
|
|
$
|
(335
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(335
|
)
|
|
$
|
—
|
|
|
$
|
(335
|
)
|
•
|
Money Market Funds / Commercial Paper:
Money market funds typically invest in government securities, certificates of deposit, commercial paper and other highly liquid, low risk securities. Money market funds are principally used for overnight deposits and are classified as Level 1 when unadjusted quoted prices in active markets are available and as Level 2 when they are not actively traded on an exchange. Direct investments in commercial paper are not listed on an exchange in an active market and are classified as Level 2.
|
•
|
Equity Securities:
Comprised of mutual funds investing in U.S. and foreign stocks. These mutual funds are classified as Level 2.
|
•
|
Commingled Fixed Income Securities:
Comprised of mutual funds that invest in a variety of fixed income securities including securities of the U.S. government and its agencies, corporate debt, mortgage-backed securities and asset-backed securities. Fair value is based on the value of the underlying investments owned by each fund, minus its liabilities, divided by the number of shares outstanding, as reported by the fund manager. These mutual funds are classified as Level 2.
|
•
|
Government and Related Securities:
Debt securities are classified as Level 1 where active, high volume trades for identical securities exist. Valuation adjustments are not applied to these securities. Debt securities are classified as Level 2 where fair value is determined using quoted market prices for similar securities or benchmarking model derived prices to quoted market prices and trade data for identical or comparable securities.
|
•
|
Corporate Debt Securities:
Corporate debt securities are valued using recently executed comparable transactions, market price quotations or bond spreads for the same maturity as the security. These securities are classified as Level 2.
|
•
|
Mortgage-Backed Securities / Asset-Backed Securities:
These securities are valued based on external pricing indices or external price/spread data. These securities are classified as Level 2.
|
|
June 30, 2018
|
||||||||||||||
|
Amortized cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Estimated fair value
|
||||||||
Government and related securities
|
$
|
140,583
|
|
|
$
|
1,247
|
|
|
$
|
(2,162
|
)
|
|
$
|
139,668
|
|
Corporate debt securities
|
72,428
|
|
|
268
|
|
|
(1,618
|
)
|
|
71,078
|
|
||||
Commingled fixed income securities
|
1,619
|
|
|
—
|
|
|
(70
|
)
|
|
1,549
|
|
||||
Mortgage-backed / asset-backed securities
|
168,585
|
|
|
730
|
|
|
(3,480
|
)
|
|
165,835
|
|
||||
Total
|
$
|
383,215
|
|
|
$
|
2,245
|
|
|
$
|
(7,330
|
)
|
|
$
|
378,130
|
|
|
December 31, 2017
|
||||||||||||||
|
Amortized cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Estimated fair value
|
||||||||
Government and related securities
|
$
|
131,872
|
|
|
$
|
1,984
|
|
|
$
|
(1,090
|
)
|
|
$
|
132,766
|
|
Corporate debt securities
|
73,612
|
|
|
1,724
|
|
|
(227
|
)
|
|
75,109
|
|
||||
Commingled fixed income securities
|
1,796
|
|
|
—
|
|
|
(40
|
)
|
|
1,756
|
|
||||
Mortgage-backed / asset-backed securities
|
158,496
|
|
|
1,348
|
|
|
(1,642
|
)
|
|
158,202
|
|
||||
Total
|
$
|
365,776
|
|
|
$
|
5,056
|
|
|
$
|
(2,999
|
)
|
|
$
|
367,833
|
|
|
Amortized cost
|
|
Estimated fair value
|
||||
Within 1 year
|
$
|
56,012
|
|
|
$
|
55,705
|
|
After 1 year through 5 years
|
114,973
|
|
|
113,720
|
|
||
After 5 years through 10 years
|
58,066
|
|
|
56,867
|
|
||
After 10 years
|
154,164
|
|
|
151,838
|
|
||
Total
|
$
|
383,215
|
|
|
$
|
378,130
|
|
Designation of Derivatives
|
|
Balance Sheet Location
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Derivatives designated as
hedging instruments
|
|
|
|
|
|
|
|
|
||
Foreign exchange contracts
|
|
Other current assets and prepayments
|
|
$
|
114
|
|
|
$
|
57
|
|
|
|
Accounts payable and accrued liabilities
|
|
(39
|
)
|
|
(144
|
)
|
||
|
|
|
|
|
|
|
||||
Interest rate swap
|
|
Other assets
|
|
824
|
|
|
1,776
|
|
||
|
|
|
|
|
|
|
|
|
||
Derivatives not designated as
hedging instruments
|
|
|
|
|
|
|
|
|
||
Foreign exchange contracts
|
|
Other current assets and prepayments
|
|
2,559
|
|
|
65
|
|
||
|
|
Accounts payable and accrued liabilities
|
|
(139
|
)
|
|
(191
|
)
|
||
|
|
|
|
|
|
|
||||
|
|
Total derivative assets
|
|
$
|
3,497
|
|
|
$
|
1,898
|
|
|
|
Total derivative liabilities
|
|
(178
|
)
|
|
(335
|
)
|
||
|
|
Total net derivative asset
|
|
$
|
3,319
|
|
|
$
|
1,563
|
|
|
|
Three Months Ended June 30,
|
||||||||||||||||
|
|
Derivative Gain (Loss)
Recognized in AOCI
(Effective Portion)
|
|
Location of Gain (Loss)
(Effective Portion)
|
|
Gain (Loss) Reclassified
from AOCI to Earnings
(Effective Portion)
|
||||||||||||
Derivative Instrument
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|||||||||
Foreign exchange contracts
|
|
$
|
119
|
|
|
$
|
(599
|
)
|
|
Revenue
|
|
$
|
79
|
|
|
$
|
34
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
(1
|
)
|
|
36
|
|
||||
Interest rate swap
|
|
(771
|
)
|
|
(147
|
)
|
|
Interest Expense
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
(652
|
)
|
|
$
|
(746
|
)
|
|
|
|
$
|
78
|
|
|
$
|
70
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Six Months Ended June 30,
|
||||||||||||||||
|
|
Derivative Gain (Loss)
Recognized in AOCL
(Effective Portion)
|
|
Location of Gain (Loss)
(Effective Portion)
|
|
Gain (Loss) Reclassified
from AOCL to Earnings
(Effective Portion)
|
||||||||||||
Derivative Instrument
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|||||||||
Foreign exchange contracts
|
|
$
|
154
|
|
|
$
|
(549
|
)
|
|
Revenue
|
|
$
|
76
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
(85
|
)
|
|
148
|
|
||||
Interest rate swap
|
|
(952
|
)
|
|
321
|
|
|
Interest Expense
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
(798
|
)
|
|
$
|
(228
|
)
|
|
|
|
$
|
(9
|
)
|
|
$
|
154
|
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
|
Derivative Gain (Loss) Recognized in Earnings
|
||||||
Derivatives Instrument
|
|
Location of Derivative Gain (Loss)
|
|
2018
|
|
2017
|
||||
Foreign exchange contracts
|
|
Selling, general and administrative expense
|
|
$
|
(14,828
|
)
|
|
$
|
789
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
|
|
Derivative Gain (Loss) Recognized in Earnings
|
||||||
Derivatives Instrument
|
|
Location of Derivative Gain (Loss)
|
|
2018
|
|
2017
|
||||
Foreign exchange contracts
|
|
Selling, general and administrative expense
|
|
$
|
(18,396
|
)
|
|
$
|
(1,061
|
)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Carrying value
|
$
|
3,572,809
|
|
|
$
|
3,830,335
|
|
Fair value
|
$
|
3,381,964
|
|
|
$
|
3,718,986
|
|
|
Severance and benefits costs
|
|
Other exit
costs
|
|
Total
|
||||||
Balance at January 1, 2018
|
$
|
42,151
|
|
|
$
|
1,569
|
|
|
$
|
43,720
|
|
Expenses, net
|
7,990
|
|
|
4,417
|
|
|
12,407
|
|
|||
Cash payments
|
(26,942
|
)
|
|
(586
|
)
|
|
(27,528
|
)
|
|||
Balance at June 30, 2018
|
$
|
23,199
|
|
|
$
|
5,400
|
|
|
$
|
28,599
|
|
|
|
|
|
|
|
||||||
Balance at January 1, 2017
|
$
|
28,234
|
|
|
$
|
281
|
|
|
$
|
28,515
|
|
Expenses, net
|
22,489
|
|
|
1,560
|
|
|
24,049
|
|
|||
Cash payments
|
(17,154
|
)
|
|
(497
|
)
|
|
(17,651
|
)
|
|||
Balance at June 30, 2017
|
$
|
33,569
|
|
|
$
|
1,344
|
|
|
$
|
34,913
|
|
|
Interest rate
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Notes due March 2018
|
5.60%
|
|
$
|
—
|
|
|
$
|
250,000
|
|
Notes due March 2019
|
6.25%
|
|
300,000
|
|
|
300,000
|
|
||
Notes due September 2020
|
3.625%
|
|
300,000
|
|
|
300,000
|
|
||
Notes due October 2021
|
3.625%
|
|
600,000
|
|
|
600,000
|
|
||
Notes due May 2022
|
4.375%
|
|
400,000
|
|
|
400,000
|
|
||
Notes due April 2023
|
4.7%
|
|
400,000
|
|
|
400,000
|
|
||
Notes due March 2024
|
4.625%
|
|
500,000
|
|
|
500,000
|
|
||
Notes due January 2037
|
5.25%
|
|
35,841
|
|
|
35,841
|
|
||
Notes due March 2043
|
6.7%
|
|
425,000
|
|
|
425,000
|
|
||
Term loans
|
Variable
|
|
640,000
|
|
|
650,000
|
|
||
Other debt
|
|
|
5,378
|
|
|
5,476
|
|
||
Principal amount
|
|
|
3,606,219
|
|
|
3,866,317
|
|
||
Less: unamortized costs, net
|
|
|
33,410
|
|
|
35,982
|
|
||
Total debt
|
|
|
3,572,809
|
|
|
3,830,335
|
|
||
Less: current portion long-term debt
|
|
|
334,999
|
|
|
271,057
|
|
||
Long-term debt
|
|
|
$
|
3,237,810
|
|
|
$
|
3,559,278
|
|
|
Defined Benefit Pension Plans
|
|
Nonpension Postretirement Benefit Plans
|
||||||||||||||||||||
|
United States
|
|
Foreign
|
|
|
||||||||||||||||||
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||
|
June 30,
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
$
|
9
|
|
|
$
|
34
|
|
|
$
|
575
|
|
|
$
|
559
|
|
|
$
|
405
|
|
|
$
|
434
|
|
Interest cost
|
15,108
|
|
|
17,121
|
|
|
4,591
|
|
|
4,640
|
|
|
1,607
|
|
|
1,770
|
|
||||||
Expected return on plan assets
|
(25,119
|
)
|
|
(24,369
|
)
|
|
(9,118
|
)
|
|
(7,961
|
)
|
|
—
|
|
|
—
|
|
||||||
Amortization of transition credit
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service (credit) cost
|
(15
|
)
|
|
(15
|
)
|
|
(18
|
)
|
|
(17
|
)
|
|
88
|
|
|
74
|
|
||||||
Amortization of net actuarial loss
|
7,628
|
|
|
7,229
|
|
|
1,870
|
|
|
1,892
|
|
|
881
|
|
|
905
|
|
||||||
Net periodic benefit (income) cost
|
$
|
(2,389
|
)
|
|
$
|
—
|
|
|
$
|
(2,102
|
)
|
|
$
|
(889
|
)
|
|
$
|
2,981
|
|
|
$
|
3,183
|
|
Contributions to benefit plans
|
$
|
1,906
|
|
|
$
|
1,046
|
|
|
$
|
769
|
|
|
$
|
1,319
|
|
|
$
|
4,316
|
|
|
$
|
4,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Defined Benefit Pension Plans
|
|
Nonpension Postretirement Benefit Plans
|
||||||||||||||||||||
|
United States
|
|
Foreign
|
|
|
||||||||||||||||||
|
Six Months Ended
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
June 30,
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
$
|
46
|
|
|
$
|
64
|
|
|
$
|
1,164
|
|
|
$
|
1,101
|
|
|
$
|
811
|
|
|
$
|
853
|
|
Interest cost
|
30,724
|
|
|
34,366
|
|
|
9,287
|
|
|
9,184
|
|
|
3,210
|
|
|
3,541
|
|
||||||
Expected return on plan assets
|
(50,543
|
)
|
|
(48,917
|
)
|
|
(18,304
|
)
|
|
(15,742
|
)
|
|
—
|
|
|
—
|
|
||||||
Amortization of transition credit
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service (credit) cost
|
(30
|
)
|
|
(30
|
)
|
|
(37
|
)
|
|
(35
|
)
|
|
176
|
|
|
148
|
|
||||||
Amortization of net actuarial loss
|
15,704
|
|
|
14,497
|
|
|
3,783
|
|
|
3,926
|
|
|
1,815
|
|
|
1,789
|
|
||||||
Net periodic benefit (income) cost
|
$
|
(4,099
|
)
|
|
$
|
(20
|
)
|
|
$
|
(4,110
|
)
|
|
$
|
(1,570
|
)
|
|
$
|
6,012
|
|
|
$
|
6,331
|
|
Contributions to benefit plans
|
$
|
3,194
|
|
|
$
|
2,594
|
|
|
$
|
9,979
|
|
|
$
|
10,391
|
|
|
$
|
9,111
|
|
|
$
|
9,124
|
|
|
Preferred
stock
|
|
Preference
stock
|
|
Common stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive loss
|
|
Treasury stock
|
|
Total equity
|
||||||||||||||||
Balance at December 31, 2017
|
$
|
1
|
|
|
$
|
441
|
|
|
$
|
323,338
|
|
|
$
|
138,367
|
|
|
$
|
5,229,584
|
|
|
$
|
(792,173
|
)
|
|
$
|
(4,710,997
|
)
|
|
$
|
188,561
|
|
Cumulative effect of accounting changes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,207
|
)
|
|
—
|
|
|
—
|
|
|
(12,207
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101,727
|
|
|
—
|
|
|
—
|
|
|
101,727
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,078
|
)
|
|
—
|
|
|
(18,078
|
)
|
||||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,113
|
)
|
|
—
|
|
|
—
|
|
|
(70,113
|
)
|
||||||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,267
|
)
|
|
—
|
|
|
—
|
|
|
21,141
|
|
|
(3,126
|
)
|
||||||||
Conversion to common stock
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
(521
|
)
|
|
—
|
|
|
—
|
|
|
547
|
|
|
—
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
9,153
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,153
|
|
||||||||
Balance at June 30, 2018
|
$
|
1
|
|
|
$
|
415
|
|
|
$
|
323,338
|
|
|
$
|
122,732
|
|
|
$
|
5,248,991
|
|
|
$
|
(810,251
|
)
|
|
$
|
(4,689,309
|
)
|
|
$
|
195,917
|
|
|
Preferred
stock
|
|
Preference
stock
|
|
Common stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive loss
|
|
Treasury stock
|
|
Total (deficit) equity
|
||||||||||||||||
Balance at December 31, 2016
|
$
|
1
|
|
|
$
|
483
|
|
|
$
|
323,338
|
|
|
$
|
148,125
|
|
|
$
|
5,107,734
|
|
|
$
|
(940,133
|
)
|
|
$
|
(4,743,208
|
)
|
|
$
|
(103,660
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
114,034
|
|
|
—
|
|
|
—
|
|
|
114,034
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,818
|
|
|
—
|
|
|
80,818
|
|
||||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,527
|
)
|
|
—
|
|
|
—
|
|
|
(69,527
|
)
|
||||||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,567
|
)
|
|
—
|
|
|
—
|
|
|
23,744
|
|
|
(4,823
|
)
|
||||||||
Conversion to common stock
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
(398
|
)
|
|
—
|
|
|
—
|
|
|
418
|
|
|
—
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
12,531
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,531
|
|
||||||||
Balance at June 30, 2017
|
$
|
1
|
|
|
$
|
463
|
|
|
$
|
323,338
|
|
|
$
|
131,691
|
|
|
$
|
5,152,241
|
|
|
$
|
(859,315
|
)
|
|
$
|
(4,719,046
|
)
|
|
$
|
29,373
|
|
|
Amount Reclassified from AOCI
(a)
|
||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Gains (losses) on cash flow hedges
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
79
|
|
|
$
|
34
|
|
|
$
|
76
|
|
|
$
|
6
|
|
Cost of sales
|
(1
|
)
|
|
36
|
|
|
(85
|
)
|
|
148
|
|
||||
Interest expense, net
|
(507
|
)
|
|
(507
|
)
|
|
(1,014
|
)
|
|
(1,014
|
)
|
||||
Total before tax
|
(429
|
)
|
|
(437
|
)
|
|
(1,023
|
)
|
|
(860
|
)
|
||||
Benefit from income taxes
|
110
|
|
|
170
|
|
|
261
|
|
|
336
|
|
||||
Net of tax
|
$
|
(319
|
)
|
|
$
|
(267
|
)
|
|
$
|
(762
|
)
|
|
$
|
(524
|
)
|
|
|
|
|
|
|
|
|
||||||||
Gains (losses) on available for sale securities
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
$
|
214
|
|
|
$
|
(117
|
)
|
|
$
|
190
|
|
|
$
|
(226
|
)
|
(Provision) benefit from income taxes
|
(54
|
)
|
|
44
|
|
|
(48
|
)
|
|
84
|
|
||||
Net of tax
|
$
|
160
|
|
|
$
|
(73
|
)
|
|
$
|
142
|
|
|
$
|
(142
|
)
|
|
|
|
|
|
|
|
|
||||||||
Pension and Postretirement Benefit Plans
(b)
|
|
|
|
|
|
|
|
||||||||
Transition credit
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Prior service costs
|
(55
|
)
|
|
(42
|
)
|
|
(109
|
)
|
|
(83
|
)
|
||||
Actuarial losses
|
(10,379
|
)
|
|
(10,026
|
)
|
|
(21,302
|
)
|
|
(20,212
|
)
|
||||
Total before tax
|
(10,432
|
)
|
|
(10,066
|
)
|
|
(21,408
|
)
|
|
(20,291
|
)
|
||||
Benefit from income taxes
|
2,564
|
|
|
3,442
|
|
|
5,368
|
|
|
6,956
|
|
||||
Net of tax
|
$
|
(7,868
|
)
|
|
$
|
(6,624
|
)
|
|
$
|
(16,040
|
)
|
|
$
|
(13,335
|
)
|
|
Cash flow hedges
|
|
Available for sale securities
|
|
Pension and postretirement benefit plans
|
|
Foreign currency adjustments
|
|
Total
|
||||||||||
Balance at January 1, 2018
|
$
|
(406
|
)
|
|
$
|
1,597
|
|
|
$
|
(748,800
|
)
|
|
$
|
(44,564
|
)
|
|
$
|
(792,173
|
)
|
Other comprehensive loss before reclassifications (a)
|
(511
|
)
|
|
(5,154
|
)
|
|
—
|
|
|
(29,073
|
)
|
|
(34,738
|
)
|
|||||
Reclassifications into earnings (a), (b)
|
762
|
|
|
(142
|
)
|
|
16,040
|
|
|
—
|
|
|
16,660
|
|
|||||
Net other comprehensive income (loss)
|
251
|
|
|
(5,296
|
)
|
|
16,040
|
|
|
(29,073
|
)
|
|
(18,078
|
)
|
|||||
Balance at June 30, 2018
|
$
|
(155
|
)
|
|
$
|
(3,699
|
)
|
|
$
|
(732,760
|
)
|
|
$
|
(73,637
|
)
|
|
$
|
(810,251
|
)
|
|
Cash flow hedges
|
|
Available for sale securities
|
|
Pension and postretirement benefit plans
|
|
Foreign currency adjustments
|
|
Total
|
||||||||||
Balance at January 1, 2017
|
$
|
(1,485
|
)
|
|
$
|
120
|
|
|
$
|
(787,813
|
)
|
|
$
|
(150,955
|
)
|
|
$
|
(940,133
|
)
|
Other comprehensive (loss) income before reclassifications (a)
|
(141
|
)
|
|
1,734
|
|
|
(1,482
|
)
|
|
66,706
|
|
|
66,817
|
|
|||||
Reclassifications into earnings (a), (b)
|
524
|
|
|
142
|
|
|
13,335
|
|
|
—
|
|
|
14,001
|
|
|||||
Net other comprehensive income
|
383
|
|
|
1,876
|
|
|
11,853
|
|
|
66,706
|
|
|
80,818
|
|
|||||
Balance at June 30, 2017
|
$
|
(1,102
|
)
|
|
$
|
1,996
|
|
|
$
|
(775,960
|
)
|
|
$
|
(84,249
|
)
|
|
$
|
(859,315
|
)
|
•
|
declining physical mail volumes
|
•
|
competitive factors, including pricing pressures; technological developments and the introduction of new products and services by competitors
|
•
|
our success in developing new products and services, including digital-based products and services and obtaining regulatory approval if required
|
•
|
the market’s acceptance of new products and services
|
•
|
changes in postal or banking regulations
|
•
|
changes in, or loss of, our contractual relationships with the U.S. Postal Service or posts in our other major markets
|
•
|
changes in labor conditions and transportation costs
|
•
|
the continued availability and security of key information technology systems and the cost to comply with information security requirements and privacy laws
|
•
|
a breach of security, including a cyberattack or other comparable event
|
•
|
macroeconomic factors, including global and regional business conditions that adversely impact customer demand, foreign currency exchange rates, interest rates and tariffs
|
•
|
economic tensions between governments and changes in international trade policies
|
•
|
third-party suppliers' ability to provide products and services required by our clients
|
•
|
our success at managing the relationships with our outsource providers, including the costs of outsourcing functions and operations not central to our business
|
•
|
integrating newly acquired businesses, including operations and product and service offerings
|
•
|
the loss of some of our larger clients in the Global Ecommerce segment
|
•
|
intellectual property infringement claims
|
•
|
our success at managing customer credit risk
|
•
|
capital market disruptions or credit rating downgrades that adversely impact our ability to access capital markets at reasonable costs
|
•
|
our ability to fully utilize the enterprise business platform in North America and successfully deploy it in major international markets without significant disruption to existing operations
|
•
|
significant changes in pension, health care and retiree medical costs
|
•
|
income tax adjustments or other regulatory levies for prior audit years and changes in tax laws, rulings or regulations, including the impact of the Tax Cuts and Jobs Act of 2017
|
•
|
a disruption of our businesses due to changes in international or national political conditions, including the use of the mail for transmitting harmful biological agents or other terrorist attacks
|
•
|
acts of nature
|
|
2018
|
2017
|
Change
|
||||
Revenue
|
$
|
861,436
|
|
$
|
730,413
|
|
18%
|
Net income from continuing operations
|
$
|
47,006
|
|
$
|
41,461
|
|
13%
|
Diluted earnings per share - continuing operations
|
$
|
0.25
|
|
$
|
0.22
|
|
14%
|
•
|
The increase reflects growth in business services revenue and software revenue, partially offset by declines in equipment sales, and stream revenues (financing, rentals, supplies and support services).
|
•
|
Commerce Services grew
70%
as reported and
69%
on a constant currency basis primarily due to growth in Global Ecommerce. Revenue for Global Ecommerce more than doubled over the prior year, and excluding revenue from Newgistics, grew 19% primarily due to higher shipping revenue. Presort Services revenue grew
4%
due to higher mail processing volumes.
|
•
|
Small and Medium Business Solutions (SMB) revenue declined
7%
as reported and
8%
on a constant currency basis. North America Mailing revenue declined
8%
as reported and on a constant currency basis primarily due to a decline in equipment sales and stream revenues. International Mailing revenue declined
2%
as reported and
7%
on a constant currency basis due to lower equipment sales, and stream revenues.
|
•
|
Software Solutions revenue increased
13%
as reported and
12%
on a constant currency basis due to growth in Data, Customer Information Management and Location Intelligence, in part from the implementation of the new revenue recognition accounting standard (ASC 606). See Note 2 to the Condensed Consolidated Financial Statements for further information.
|
|
2018
|
2017
|
Change
|
||||
Revenue
|
$
|
1,742,384
|
|
$
|
1,473,593
|
|
18%
|
Net income from continuing operations
|
$
|
92,032
|
|
$
|
98,885
|
|
(7)%
|
Diluted earnings per share - continuing operations
|
$
|
0.49
|
|
$
|
0.53
|
|
(8)%
|
Net cash provided by operating activities - continuing operations
|
$
|
133,262
|
|
$
|
170,551
|
|
(22)%
|
•
|
The increase reflects growth in business services revenue and software revenue, partially offset by declines in equipment sales and stream revenues.
|
•
|
Commerce Services grew
71%
as reported and
70%
on a constant currency basis primarily due to growth in Global Ecommerce. Revenue for Global Ecommerce more than doubled over the prior year, and excluding revenue from Newgistics, grew 25% due to higher shipping and marketplace revenue. Presort Services revenue grew
2%
due to higher mail processing volumes.
|
•
|
SMB revenue declined
6%
as reported and
8%
on a constant currency basis. North America Mailing revenue declined
8%
as reported and on a constant currency basis primarily due to a decline in equipment sales and stream revenues. International Mailing revenue increased
1%
as reported, but declined
6%
on a constant currency basis due to lower equipment sales, supplies and support services revenue.
|
•
|
Software Solutions revenue increased
9%
as reported and
7%
on a constant currency basis due to the implementation of ASC 606. See Note 2 to the Condensed Consolidated Financial Statements for further information.
|
•
|
repay $260 million of debt;
|
•
|
pay dividends of $70 million to our stockholders; and
|
•
|
invest
$100 million
in capital expenditures.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
Actual % change
|
|
Constant Currency % change
|
|
2018
|
|
2017
|
|
Actual % change
|
|
Constant Currency % change
|
||||||||||||
Equipment sales
|
$
|
105,750
|
|
|
$
|
121,384
|
|
|
(13
|
)%
|
|
(14
|
)%
|
|
$
|
216,121
|
|
|
$
|
245,887
|
|
|
(12
|
)%
|
|
(14
|
)%
|
Supplies
|
55,457
|
|
|
58,639
|
|
|
(5
|
)%
|
|
(7
|
)%
|
|
115,450
|
|
|
119,694
|
|
|
(4
|
)%
|
|
(7
|
)%
|
||||
Software
|
91,702
|
|
|
81,319
|
|
|
13
|
%
|
|
11
|
%
|
|
167,996
|
|
|
154,165
|
|
|
9
|
%
|
|
7
|
%
|
||||
Rentals
|
91,809
|
|
|
95,447
|
|
|
(4
|
)%
|
|
(5
|
)%
|
|
186,435
|
|
|
194,754
|
|
|
(4
|
)%
|
|
(5
|
)%
|
||||
Financing
|
76,671
|
|
|
83,653
|
|
|
(8
|
)%
|
|
(9
|
)%
|
|
156,774
|
|
|
169,398
|
|
|
(7
|
)%
|
|
(9
|
)%
|
||||
Support services
|
72,171
|
|
|
72,068
|
|
|
—
|
%
|
|
(2
|
)%
|
|
145,194
|
|
|
147,273
|
|
|
(1
|
)%
|
|
(4
|
)%
|
||||
Business services
|
367,876
|
|
|
217,903
|
|
|
69
|
%
|
|
68
|
%
|
|
754,414
|
|
|
442,422
|
|
|
71
|
%
|
|
70
|
%
|
||||
Total revenue
|
$
|
861,436
|
|
|
$
|
730,413
|
|
|
18
|
%
|
|
17
|
%
|
|
$
|
1,742,384
|
|
|
$
|
1,473,593
|
|
|
18
|
%
|
|
17
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
|
|
|
|
Percentage of Revenue
|
|
|
|
|
|
Percentage of Revenue
|
||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Cost of equipment sales
|
$
|
47,106
|
|
|
$
|
51,506
|
|
|
44.5
|
%
|
|
42.4
|
%
|
|
$
|
93,160
|
|
|
$
|
96,122
|
|
|
43.1
|
%
|
|
39.1
|
%
|
Cost of supplies
|
15,738
|
|
|
16,216
|
|
|
28.4
|
%
|
|
27.7
|
%
|
|
32,685
|
|
|
33,068
|
|
|
28.3
|
%
|
|
27.6
|
%
|
||||
Cost of software
|
26,459
|
|
|
23,361
|
|
|
28.9
|
%
|
|
28.7
|
%
|
|
50,514
|
|
|
46,515
|
|
|
30.1
|
%
|
|
30.2
|
%
|
||||
Cost of rentals
|
21,078
|
|
|
21,143
|
|
|
23.0
|
%
|
|
22.2
|
%
|
|
45,132
|
|
|
41,422
|
|
|
24.2
|
%
|
|
21.3
|
%
|
||||
Financing interest expense
|
12,346
|
|
|
12,843
|
|
|
16.1
|
%
|
|
15.4
|
%
|
|
24,571
|
|
|
25,817
|
|
|
15.7
|
%
|
|
15.2
|
%
|
||||
Cost of support services
|
39,609
|
|
|
41,772
|
|
|
54.9
|
%
|
|
58.0
|
%
|
|
82,736
|
|
|
83,421
|
|
|
57.0
|
%
|
|
56.6
|
%
|
||||
Cost of business services
|
293,480
|
|
|
153,063
|
|
|
79.8
|
%
|
|
70.2
|
%
|
|
590,879
|
|
|
303,906
|
|
|
78.3
|
%
|
|
68.7
|
%
|
||||
Total cost of revenue
|
$
|
455,816
|
|
|
$
|
319,904
|
|
|
52.9
|
%
|
|
43.8
|
%
|
|
$
|
919,677
|
|
|
$
|
630,271
|
|
|
52.8
|
%
|
|
42.8
|
%
|
•
|
12% from lower equipment sales in North America Mailing reflecting a change in product mix and lower backlog at the beginning of the quarter compared to prior year periods; and
|
•
|
2% from lower equipment sales in International Mailing, particularly the U.K.
|
•
|
6% from lower supplies revenue in North America Mailing; and
|
•
|
2% from lower supplies revenue in International Mailing.
|
•
|
4% from lower supplies revenue in North America Mailing; and
|
•
|
2% from lower supplies revenue in International Mailing.
|
•
|
2% from a decline in support services revenue in International Mailing; offset partially by
|
•
|
1% from an increase in support services revenue in North America Mailing.
|
•
|
58% from the acquisition of Newgistics;
|
•
|
8% from growth in Global Ecommerce, excluding Newgistics, due to higher shipping revenues; and
|
•
|
2% from higher volumes of mail processed in Presort Services.
|
•
|
58% from the acquisition of Newgistics;
|
•
|
10% from growth in Global Ecommerce, excluding Newgistics, due to higher shipping and cross-border revenue; and
|
•
|
1% from higher volumes of mail processed in Presort Services.
|
|
Revenue
|
||||||||||||||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Actual % change
|
|
Constant Currency % change
|
|
2018
|
|
2017
|
|
Actual % change
|
|
Constant Currency % change
|
||||||||||||
Global Ecommerce
|
$
|
239,100
|
|
|
$
|
94,506
|
|
|
>100%
|
|
|
>100%
|
|
|
$
|
485,690
|
|
|
$
|
182,658
|
|
|
>100%
|
|
|
>100%
|
|
Presort Services
|
122,730
|
|
|
118,452
|
|
|
4
|
%
|
|
4
|
%
|
|
257,188
|
|
|
251,129
|
|
|
2
|
%
|
|
2
|
%
|
||||
Commerce Services
|
361,830
|
|
|
212,958
|
|
|
70
|
%
|
|
69
|
%
|
|
742,878
|
|
|
433,787
|
|
|
71
|
%
|
|
70
|
%
|
||||
North America Mailing
|
314,546
|
|
|
340,949
|
|
|
(8
|
)%
|
|
(8
|
)%
|
|
640,115
|
|
|
696,902
|
|
|
(8
|
)%
|
|
(8
|
)%
|
||||
International Mailing
|
93,358
|
|
|
95,425
|
|
|
(2
|
)%
|
|
(7
|
)%
|
|
191,395
|
|
|
188,624
|
|
|
1
|
%
|
|
(6
|
)%
|
||||
Small & Medium Business Solutions
|
407,904
|
|
|
436,374
|
|
|
(7
|
)%
|
|
(8
|
)%
|
|
831,510
|
|
|
885,526
|
|
|
(6
|
)%
|
|
(8
|
)%
|
||||
Software Solutions
|
91,702
|
|
|
81,081
|
|
|
13
|
%
|
|
12
|
%
|
|
167,996
|
|
|
154,280
|
|
|
9
|
%
|
|
7
|
%
|
||||
Total
|
$
|
861,436
|
|
|
$
|
730,413
|
|
|
18
|
%
|
|
17
|
%
|
|
$
|
1,742,384
|
|
|
$
|
1,473,593
|
|
|
18
|
%
|
|
17
|
%
|
|
EBIT
|
||||||||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
% change
|
|
2018
|
|
2017
|
|
% change
|
||||||||||
Global Ecommerce
|
$
|
(5,993
|
)
|
|
$
|
(4,030
|
)
|
|
(49
|
)%
|
|
$
|
(13,704
|
)
|
|
$
|
(8,300
|
)
|
|
(65
|
)%
|
Presort Services
|
12,565
|
|
|
19,270
|
|
|
(35
|
)%
|
|
39,591
|
|
|
49,987
|
|
|
(21
|
)%
|
||||
Commerce Services
|
6,572
|
|
|
15,240
|
|
|
(57
|
)%
|
|
25,887
|
|
|
41,687
|
|
|
(38
|
)%
|
||||
North America Mailing
|
115,193
|
|
|
120,797
|
|
|
(5
|
)%
|
|
234,763
|
|
|
262,041
|
|
|
(10
|
)%
|
||||
International Mailing
|
13,215
|
|
|
14,020
|
|
|
(6
|
)%
|
|
29,246
|
|
|
27,430
|
|
|
7
|
%
|
||||
Small & Medium Business Solutions
|
128,408
|
|
|
134,817
|
|
|
(5
|
)%
|
|
264,009
|
|
|
289,471
|
|
|
(9
|
)%
|
||||
Software Solutions
|
18,433
|
|
|
5,091
|
|
|
>100%
|
|
|
20,925
|
|
|
6,397
|
|
|
> 100%
|
|
||||
Total Segment EBIT
|
$
|
153,413
|
|
|
$
|
155,148
|
|
|
(1
|
)%
|
|
$
|
310,821
|
|
|
$
|
337,555
|
|
|
(8
|
)%
|
|
EBITDA
|
||||||||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
% change
|
|
2018
|
|
2017
|
|
% change
|
||||||||||
Global Ecommerce
|
$
|
9,474
|
|
|
$
|
3,157
|
|
|
>100%
|
|
|
$
|
16,193
|
|
|
$
|
6,210
|
|
|
>100%
|
|
Presort Services
|
19,188
|
|
|
26,196
|
|
|
(27
|
)%
|
|
52,376
|
|
|
64,111
|
|
|
(18
|
)%
|
||||
Commerce Services
|
28,662
|
|
|
29,353
|
|
|
(2
|
)%
|
|
68,569
|
|
|
70,321
|
|
|
(2
|
)%
|
||||
North America Mailing
|
132,569
|
|
|
137,157
|
|
|
(3
|
)%
|
|
268,996
|
|
|
294,427
|
|
|
(9
|
)%
|
||||
International Mailing
|
17,469
|
|
|
18,368
|
|
|
(5
|
)%
|
|
38,021
|
|
|
36,475
|
|
|
4
|
%
|
||||
Small & Medium Business Solutions
|
150,038
|
|
|
155,525
|
|
|
(4
|
)%
|
|
307,017
|
|
|
330,902
|
|
|
(7
|
)%
|
||||
Software Solutions
|
20,819
|
|
|
7,381
|
|
|
>100%
|
|
|
25,732
|
|
|
10,775
|
|
|
>100%
|
|
||||
Total Segment EBITDA
|
199,519
|
|
|
192,259
|
|
|
4
|
%
|
|
401,318
|
|
|
411,998
|
|
|
(3
|
)%
|
||||
Less: Segment depreciation and amortization
(1)
|
(46,106
|
)
|
|
(37,111
|
)
|
|
24
|
%
|
|
(90,497
|
)
|
|
(74,443
|
)
|
|
22
|
%
|
||||
Total Segment EBIT
|
$
|
153,413
|
|
|
$
|
155,148
|
|
|
(1
|
)%
|
|
$
|
310,821
|
|
|
$
|
337,555
|
|
|
(8
|
)%
|
•
|
134%, or $127 million, from the additional revenue from Newgistics; and
|
•
|
18% from higher shipping revenues due to increased domestic volumes.
|
•
|
140%, or $256 million, from the additional revenue from Newgistics;
|
•
|
19% from higher shipping revenues due to increased volumes; and
|
•
|
5% from higher cross-border marketplace volumes, particularly in the U.S.
|
•
|
4% from lower equipment sales due to lower sales of certain products and lower backlog at the beginning of the quarter compared to the prior year period;
|
•
|
2% from lower financing revenue primarily due to a declining lease portfolio and lower fees; and
|
•
|
1% from a decline in rentals revenue due to a decline in installed mailing equipment and lower postage volumes.
|
•
|
4% from lower equipment sales due to lower sales of certain products, lower client lease extensions and a large prior year deal that impacted the year-over-year comparison;
|
•
|
2% from lower financing revenue primarily due to a declining lease portfolio and lower fees; and
|
•
|
2% from declines in rentals and support services revenue due to a decline in installed mailing equipment and lower postage volumes.
|
•
|
4% from lower stream revenues resulting from a lower installed meter base, declining postages volumes and a declining lease portfolio; and
|
•
|
2% from lower equipment sales, primarily in the UK and Italy.
|
•
|
4% from lower stream revenues resulting from a lower installed meter base, declining postages volumes and a declining lease portfolio; and
|
•
|
2% from lower equipment sales, primarily in the UK.
|
|
2018
|
|
2017
|
|
Change
|
||||||
Net cash provided by operating activities
|
$
|
175,034
|
|
|
$
|
184,647
|
|
|
$
|
(9,613
|
)
|
Net cash used in investing activities
|
(101,326
|
)
|
|
(224,791
|
)
|
|
123,465
|
|
|||
Net cash (used in) provided by financing activities
|
(379,818
|
)
|
|
91,371
|
|
|
(471,189
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(13,041
|
)
|
|
24,815
|
|
|
(37,856
|
)
|
|||
Change in cash and cash equivalents
|
$
|
(319,151
|
)
|
|
$
|
76,042
|
|
|
$
|
(395,193
|
)
|
•
|
Lower cash outflows from investment activities of $139 million due to the investment of residual proceeds from the issuance of debt in the prior year; partially offset by
|
•
|
Higher capital expenditures of $24 million.
|
•
|
Net proceeds of $396 million in 2017 from issuance of debt;
|
•
|
Repayment of $260 million of debt in the first six months of 2018 compared to the repayment of $229 million in the prior year; and
|
•
|
The settlement of $46 million related to a timing difference between our investing excess cash at the subsidiary level and our funding of an intercompany cash transfer at year end.
|
|
|
|
|
|
|
|
|
|||
|
Total number of
shares purchased |
|
Average price
paid per share |
|
Total number of
shares purchased as part of publicly announced plans or programs |
|
Approximate
dollar value of shares that may yet be purchased under the plans or programs (in thousands) |
|||
Beginning balance
|
|
|
|
|
|
|
$21,022
|
|||
April 1, 2018 - April 30, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
$21,022
|
May 1, 2018 - May 31, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
$21,022
|
June 1, 2018 - June 30, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
$21,022
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Exhibit
Number
|
Description
|
|
Exhibit Number in this Form 10-Q
|
3(a)
|
|
3(a)
|
|
3(b)
|
|
3(b)
|
|
10
|
|
10
|
|
10a
|
|
10
|
|
12
|
|
12
|
|
31.1
|
|
31.1
|
|
31.2
|
|
31.2
|
|
32.1
|
|
32.1
|
|
32.2
|
|
32.2
|
|
101.INS
|
XBRL Report Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Label Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
|
PITNEY BOWES INC.
|
|
|
|
Date:
|
August 2, 2018
|
|
|
|
|
|
|
/s/ Stanley J. Sutula III
|
|
|
|
|
|
Stanley J. Sutula III
|
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
|
/s/ Joseph R. Catapano
|
|
|
|
|
|
Joseph R. Catapano
|
|
|
Vice President, Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Income from continuing operations before income taxes
|
$
|
114,753
|
|
|
$
|
126,757
|
|
Add:
|
|
|
|
||||
Interest expense
|
89,366
|
|
|
81,661
|
|
||
Portion of rent expense representative of the interest factor
|
8,644
|
|
|
8,006
|
|
||
Income as adjusted
|
$
|
212,763
|
|
|
$
|
216,424
|
|
|
|
|
|
||||
Fixed charges:
|
|
|
|
||||
Interest expense
|
$
|
89,366
|
|
|
$
|
81,661
|
|
Portion of rent expense representative of the interest factor
|
8,644
|
|
|
8,006
|
|
||
Total fixed charges
|
$
|
98,010
|
|
|
$
|
89,667
|
|
|
|
|
|
||||
Ratio of earnings to fixed charges
|
2.17
|
|
2.41
|
||||
|
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Pitney Bowes Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Marc B. Lautenbach
|
|
|
|
|
Marc B. Lautenbach
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Pitney Bowes Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Stanley J. Sutula III
|
|
|
|
Stanley J. Sutula III
|
|
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Marc B. Lautenbach
|
|
|
|
Marc B. Lautenbach
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Stanley J. Sutula III
|
|
|
|
Stanley J. Sutula III
|
|
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|