Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 29, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Entity Registrant Name | PITNEY BOWES INC /DE/ | |
Entity Central Index Key | 78,814 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Entity Common Stock Shares Outstanding | 201,918,974 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Revenue: | |||||
Equipment sales | $ 165,507 | $ 191,518 | $ 331,471 | $ 380,574 | |
Supplies | 70,636 | 76,284 | 144,004 | 155,801 | |
Software | 99,184 | 109,065 | 185,541 | 200,620 | |
Rentals | 111,312 | 122,443 | 225,309 | 246,022 | |
Financing | 101,437 | 107,644 | 207,067 | 217,694 | |
Support services | 139,237 | 158,190 | 278,795 | 316,442 | |
Business services | 193,578 | 193,306 | 399,385 | 378,794 | |
Total revenue | 880,891 | 958,450 | 1,771,572 | 1,895,947 | |
Costs and expenses: | |||||
Cost of equipment sales | 79,043 | 88,818 | 154,056 | 171,352 | |
Cost of supplies | 21,624 | 23,505 | 44,283 | 47,659 | |
Cost of software | 28,501 | 33,484 | 58,365 | 63,648 | |
Cost of rentals | 21,003 | 25,193 | 41,704 | 50,637 | |
Financing interest expense | 17,868 | 20,413 | 36,638 | 40,066 | |
Cost of support services | 81,507 | 96,722 | 165,106 | 195,703 | |
Cost of business services | 135,636 | 135,024 | 275,555 | 263,960 | |
Selling, general and administrative | 315,578 | 338,384 | 630,107 | 689,759 | |
Research and development | 28,492 | 28,649 | 54,540 | 54,841 | |
Restructuring charges and asset impairments, net | 14,350 | 8,299 | 14,269 | 18,140 | |
Interest expense, net | 20,971 | 21,482 | 45,035 | 45,546 | |
Other (income) expense, net | (93,135) | 0 | (93,135) | 61,657 | |
Total costs and expenses | 671,438 | 819,973 | 1,426,523 | 1,702,968 | |
Income from continuing operations before income taxes | 209,453 | 138,477 | 345,049 | 192,979 | |
Provision for income taxes | 52,351 | 46,335 | 102,898 | 54,371 | |
Income from continuing operations | 157,102 | 92,142 | 242,151 | 138,608 | |
Net income | 156,363 | 98,859 | 241,569 | 148,126 | |
Less: Preferred stock dividends attributable to noncontrolling interests | 4,593 | 4,594 | 9,187 | 9,188 | |
Net income attributable to Pitney Bowes Inc. | 151,770 | 94,265 | 232,382 | 138,938 | |
Amounts attributable to common stockholders: | |||||
Net income from continuing operations | 152,509 | 87,548 | 232,964 | 129,420 | |
(Loss) income from discontinued operations, net of tax | (739) | 6,717 | (582) | 9,518 | |
Net income attributable to Pitney Bowes Inc. | $ 151,770 | $ 94,265 | $ 232,382 | $ 138,938 | |
Basic earnings per share attributable to common stockholders (1): | |||||
Continuing operations (in dollars per share) | [1],[2] | $ 0.76 | $ 0.43 | $ 1.16 | $ 0.64 |
Discontinued operations (in dollars per share) | [1],[2] | 0 | 0.03 | 0 | 0.05 |
Net income attributable to Pitney Bowes Inc. (in dollars per share) | [1],[2] | 0.75 | 0.47 | 1.15 | 0.69 |
Diluted earnings per share attributable to common stockholders (1): | |||||
Continuing operations (in dollars per share) | [1],[2] | 0.75 | 0.43 | 1.15 | 0.63 |
Discontinued operations (in dollars per share) | [1],[2] | 0 | 0.03 | 0 | 0.05 |
Net income attributable to Pitney Bowes Inc. (in dollars per share) | [1],[2] | 0.75 | 0.46 | 1.15 | 0.68 |
Dividends declared per share of common stock | $ 0.1875 | $ 0.1875000 | $ 0.375000 | $ 0.375000 | |
[1] | The sum of earnings per share amounts may not equal the totals due to rounding. | ||||
[2] | The sum of earnings per share amounts may not equal the totals due to rounding. |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 156,363 | $ 98,859 | $ 241,569 | $ 148,126 |
Less: Preferred stock dividends attributable to noncontrolling interests | 4,593 | 4,594 | 9,187 | 9,188 |
Net income attributable to Pitney Bowes Inc. | 151,770 | 94,265 | 232,382 | 138,938 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translations | 13,157 | 5,149 | (59,022) | (2,202) |
Net unrealized (loss) gain on cash flow hedges, net of tax of $(201), $267, $140 and $505, respectively | (333) | 417 | 216 | 790 |
Net unrealized (loss) gain on investment securities, net of tax of $(1,877), $1,249, $(863) and $2,453, respectively | (3,203) | 2,136 | (1,473) | 4,195 |
Amortization of pension and postretirement costs, net of tax of $3,614, $3,613, $7,781 and $7,254, respectively | 6,520 | 6,280 | 13,929 | 12,422 |
Other comprehensive income (loss), net of tax | 16,141 | 13,982 | (46,350) | 15,205 |
Comprehensive income attributable to Pitney Bowes Inc. | $ 167,911 | $ 108,247 | $ 186,032 | $ 154,143 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net unrealized gain (loss) on cash flow hedges, tax | $ (201) | $ 267 | $ 140 | $ 505 |
Net unrealized loss on investment securities, tax | (1,877) | 1,249 | (863) | 2,453 |
Amortization of pension and postretirement costs, tax | $ 3,614 | $ 3,613 | $ 7,781 | $ 7,254 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 754,171 | $ 1,079,145 |
Short-term investments | 46,256 | 32,121 |
Accounts receivable (net of allowance of $11,448 and $10,742, respectively) | 400,044 | 437,275 |
Short-term finance receivables (net of allowance of $16,508 and $19,108, respectively) | 952,890 | 1,000,304 |
Inventories | 101,072 | 84,827 |
Current income taxes | 37,035 | 40,542 |
Other current assets and prepayments | 72,079 | 57,173 |
Assets held for sale | 0 | 52,271 |
Total current assets | 2,363,547 | 2,783,658 |
Property, plant and equipment, net | 304,990 | 285,091 |
Rental property and equipment, net | 193,939 | 200,380 |
Long-term finance receivables (net of allowance of $7,098 and $9,002, respectively) | 780,968 | 819,721 |
Goodwill | 1,747,950 | 1,672,721 |
Intangible assets, net | 223,320 | 82,173 |
Non-current income taxes | 78,766 | 96,377 |
Other assets | 560,677 | 569,110 |
Total assets | 6,254,157 | 6,509,231 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 1,420,283 | 1,572,971 |
Current income taxes | 92,803 | 90,167 |
Current portion of long-term debt and notes payable | 521,103 | 324,879 |
Advance billings | 372,783 | 386,846 |
Total current liabilities | 2,406,972 | 2,374,863 |
Deferred taxes on income | 119,634 | 64,839 |
Tax uncertainties and other income tax liabilities | 85,191 | 86,127 |
Long-term debt | 2,473,087 | 2,927,127 |
Other non-current liabilities | 681,539 | 682,646 |
Total liabilities | 5,766,423 | 6,135,602 |
Noncontrolling interests (Preferred stockholders’ equity in subsidiaries) | $ 296,370 | $ 296,370 |
Commitments and contingencies (See Note 15) | ||
Stockholders’ equity: | ||
Cumulative preferred stock, $50 par value, 4% convertible | $ 1 | $ 1 |
Cumulative preference stock, no par value, $2.12 convertible | 522 | 548 |
Common stock, $1 par value (480,000,000 shares authorized; 323,337,912 shares issued) | 323,338 | 323,338 |
Additional paid-in capital | 155,371 | 178,852 |
Retained earnings | 5,054,442 | 4,897,708 |
Accumulated other comprehensive loss | (892,506) | (846,156) |
Treasury stock, at cost (121,566,093 and 122,309,948 shares, respectively) | (4,449,804) | (4,477,032) |
Total stockholders’ equity | 191,364 | 77,259 |
Total liabilities, noncontrolling interests and stockholders’ equity | $ 6,254,157 | $ 6,509,231 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Statement of Financial Position [Abstract] | ||
Allowance for Doubtful Accounts Receivable | $ 11,448 | $ 10,742 |
Allowance for Notes, Loans and Financing Receivable, Current | 16,508 | 19,108 |
Allowance for Notes, Loans and Financing Receivable, Noncurrent | $ 7,098 | $ 9,002 |
Preferred stock par value (in dollars per share) | $ 50 | $ 50 |
Preferred stock dividend rate | 4.00% | 4.00% |
Preference stock, par value (in dollars per share) | $ 0 | $ 0 |
Preference stock dividend rate (in dollars per share) | 2.12 | 2.12 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 480,000,000 | 480,000,000 |
Common stock, shares issued | 323,337,912 | 323,337,912 |
Treasury stock, shares | 121,566,093 | 122,309,948 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 241,569 | $ 148,126 |
Restructuring payments | (30,775) | (33,530) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Gain on disposal of businesses | (107,548) | (26,152) |
Depreciation and amortization | 85,153 | 93,717 |
Stock-based compensation | 11,067 | 7,976 |
Restructuring charges, net | 14,269 | 18,140 |
Changes in operating assets and liabilities, net of acquisitions/divestitures: | ||
Decrease in accounts receivable | 32,784 | 66,778 |
Decrease in finance receivables | 77,232 | 82,597 |
Increase in inventories | (17,414) | (1,852) |
Increase in other current assets and prepayments | (16,101) | (8,369) |
Decrease in accounts payable and accrued liabilities | (130,100) | (88,567) |
Increase in current and non-current income taxes | 24,260 | 7,657 |
Increase in advance billings | 15,850 | 11,201 |
Other, net | 85 | 2,725 |
Net cash provided by operating activities | 200,331 | 280,447 |
Cash flows from investing activities: | ||
Purchases of available-for-sale securities | (106,431) | (613,429) |
Proceeds from sales/maturities of available-for-sale securities | 111,993 | 592,799 |
Capital expenditures | (88,935) | (72,350) |
Proceeds from sale of former corporate world headquarters building | 38,640 | 0 |
Acquisition of businesses, net of cash acquired | (391,531) | 0 |
Divestiture of businesses, net of cash transferred | 289,639 | 101,454 |
Change in reserve account deposits | (21,464) | (3,356) |
Other investing activities | 8,886 | 6,889 |
Net cash (used in) provided by investing activities | (159,203) | 12,007 |
Cash flows from financing activities: | ||
Proceeds from the issuance of debt, net of fees and discounts of $7,475 in 2014 | 950 | 492,525 |
Principal payments of long-term debt | (354,909) | (599,850) |
Increase in notes payable, net | 100,000 | 0 |
Dividends paid to stockholders | (75,637) | (76,000) |
Proceeds from the issuance of common stock under employee stock-based compensation plans | 1,585 | 4,027 |
Purchase of subsidiary shares from noncontrolling interest | 0 | (7,718) |
Dividends paid to noncontrolling interests | (9,188) | (9,188) |
Net cash used in financing activities | (337,199) | (196,204) |
Effect of exchange rate changes on cash and cash equivalents | (28,903) | 1,845 |
(Decrease) increase in cash and cash equivalents | (324,974) | 98,095 |
Cash and cash equivalents at beginning of period | 1,079,145 | 907,806 |
Cash and cash equivalents at end of period | 754,171 | 1,005,901 |
Cash interest paid | 86,888 | 93,617 |
Cash income tax payments, net of refunds | $ 75,939 | $ 71,741 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) $ in Thousands | Jun. 30, 2014USD ($) |
Statement of Cash Flows [Abstract] | |
Debt issuance, fees and discounts | $ 7,475 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Pitney Bowes Inc. and its subsidiaries (we, us, our or the Company) is a global technology company offering innovative products and solutions that enable commerce in the areas of customer information management, location intelligence, customer engagement, shipping and mailing, and global ecommerce. We have prepared the accompanying unaudited Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In addition, the December 31, 2014 Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In management's opinion, all adjustments, consisting only of normal recurring adjustments, considered necessary to fairly state our financial position, results of operations and cash flows for the periods presented have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2015 . During the second quarter, we determined that at December 31, 2014, certain customer deposits in a debit position within current liabilities should have been classified as a current asset and certain customer deposits within current liabilities should have been classified as a non-current liability. Accordingly, the Condensed Consolidated Balance Sheet at December 31, 2014 has been revised by increasing accounts receivable, accounts payable and accrued liabilities, and other non-current liabilities by $23 million , $14 million and $9 million , respectively. This revision was not material to any of our previously issued financial statements. Previously issued financial statements will be revised to reflect this revision in future filings. In the fourth quarter of 2014, we noted that certain purchases and sales of available-for-sale securities were reported net in our Condensed Consolidated Statements of Cash Flows. Accordingly, the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 has been revised by increasing purchases of available-for-sale securities and proceeds from sales/maturities of available-for-sale securities by $422 million . This revision did not have any impact on the reported net cash flow from investing activities or overall change in cash in any of our previously issued financial statements. These statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report to Stockholders on Form 10-K for the year ended December 31, 2014 (2014 Annual Report). New Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2015-05, Intangibles - Goodwill and Other - Internal-Use Software, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement , which provides guidance on fees paid by an entity in a cloud computing arrangement and whether an arrangement includes a license to the underlying software. This standard is effective for fiscal periods beginning after December 15, 2015. Early adoption is permitted. We are currently assessing the impact this standard will have on our consolidated financial statements and disclosures. In April 2015, the FASB issued Accounting Standard Update (ASU) 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. This standard is effective for fiscal periods beginning after December 15, 2015. Early adoption is permitted. We do not believe this standard will have a significant impact on our consolidated financial statements or disclosures. In January 2015, the FASB issued ASU 2015-01, Income Statement - Extraordinary and Unusual Items, which removes the concept of extraordinary items, thereby eliminating the need for companies to assess transactions for extraordinary treatment. The standard retained the presentation and disclosure requirements for items that are unusual in nature and/or infrequent in occurrence. The standard is effective for fiscal periods beginning after December 15, 2015. Early adoption is permitted. We do not believe this standard will have a significant impact on our consolidated financial statements or disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The standard requires companies to recognize revenue for the transfer of goods and services to customers in amounts that reflect the consideration the company expects to receive in exchange for those goods and services. The standard will also result in enhanced disclosures about revenue. In July 2015, the FASB approved a one-year deferral of the effective date. This standard is now effective for fiscal periods beginning after December 15, 2017. The standard can be adopted either retrospectively or as a cumulative-effect adjustment. Companies are permitted to adopt the standard as early as the original public entity effective date (fiscal periods beginning after December 15, 2016). Early adoption prior to that date is prohibited. We are currently assessing the impact this standard will have on our consolidated financial statements and disclosures. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information As a result of the acquisition of Borderfree Inc. (Borderfree) and the sale of Imagitas (see Note 3), we realigned our segment reporting to conform to the way we now manage our segments and recast prior period amounts to conform to the current year presentation. Our business continues to be organized around three distinct sets of solutions – Small and Medium Business (SMB) Solutions, Enterprise Business Solutions and Digital Commerce Solutions (DCS). Under the new segment reporting, there are no changes to SMB Solutions or Enterprise Business Solutions; however, within DCS, we now report Software Solutions and Global Ecommerce Solutions as reportable segments. Other is comprised of our Marketing Services business, Imagitas, which was sold in May 2015. Imagitas was previously reported in DCS. The principal products and services of each of our reportable segments are as follows: Small & Medium Business Solutions: North America Mailing : Includes the revenue and related expenses from the sale, rental, financing and servicing of mailing equipment and supplies for small and medium businesses to efficiently create mail and evidence postage in the U.S. and Canada. International Mailing : Includes the revenue and related expenses from the sale, rental, financing and servicing of mailing equipment and supplies for small and medium businesses to efficiently create mail and evidence postage in areas outside the U.S. and Canada. Enterprise Business Solutions: Production Mail: Includes the worldwide revenue and related expenses from the sale of production mail inserting and sortation equipment, high-speed production print systems, supplies and related support services to large enterprise clients to process inbound and outbound mail. Presort Services : Includes revenue and related expenses from presort mail services for our large enterprise clients to qualify large mail volumes for postal worksharing discounts. Digital Commerce Solutions: Software Solutions: Includes the worldwide revenue and related expenses from the sale of non-equipment-based mailing, customer information management, location intelligence and customer engagement solutions and related support services. Global Ecommerce Solutions: Includes the worldwide revenue and related expenses from global ecommerce and shipping solutions. We determine segment earnings before interest and taxes (EBIT) by deducting the related costs and expenses attributable to the segment from segment revenue. Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges and other items, which are not allocated to a particular business segment. Management uses segment EBIT to measure profitability and performance at the segment level. Management believes segment EBIT provides a useful measure of our operating performance and underlying trends of the businesses. Segment EBIT may not be indicative of our overall consolidated performance and therefore, should be read in conjunction with our consolidated results of operations. Revenue and EBIT by business segment is presented below: Revenue Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 North America Mailing $ 356,791 $ 371,194 $ 718,665 $ 752,221 International Mailing 110,610 153,260 226,783 306,528 Small & Medium Business Solutions 467,401 524,454 945,448 1,058,749 Production Mail 97,731 111,756 197,234 216,972 Presort Services 113,922 111,281 235,453 227,772 Enterprise Business Solutions 211,653 223,037 432,687 444,744 Software Solutions 99,041 108,820 185,278 200,194 Global Ecommerce 77,966 68,653 153,352 132,529 Digital Commerce Solutions 177,007 177,473 338,630 332,723 Other 24,830 33,486 54,807 59,731 Total revenue $ 880,891 $ 958,450 $ 1,771,572 $ 1,895,947 EBIT Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 North America Mailing $ 159,392 $ 156,781 $ 323,057 $ 317,119 International Mailing 14,122 26,449 25,846 51,268 Small & Medium Business Solutions 173,514 183,230 348,903 368,387 Production Mail 10,028 10,558 19,060 18,295 Presort Services 23,544 22,412 51,038 46,308 Enterprise Business Solutions 33,572 32,970 70,098 64,603 Software Solutions 16,158 9,877 20,291 11,699 Global Ecommerce 3,056 3,749 11,202 9,776 Digital Commerce Solutions 19,214 13,626 31,493 21,475 Other 5,611 4,303 10,569 5,985 Total EBIT 231,911 234,129 461,063 460,450 Reconciling items: Interest, net (38,839 ) (41,895 ) (81,673 ) (85,612 ) Unallocated corporate expenses (51,921 ) (45,458 ) (102,724 ) (102,062 ) Restructuring charges and asset impairments, net (14,350 ) (8,299 ) (14,269 ) (18,140 ) Acquisition-related compensation expense (10,483 ) — (10,483 ) — Other income (expense), net 93,135 — 93,135 (61,657 ) Income from continuing operations before income taxes $ 209,453 $ 138,477 $ 345,049 $ 192,979 |
Business Combinations and Dives
Business Combinations and Divestiture | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Business Combinations and Divestiture | Business Combinations and Divestiture Business Combinations Borderfree Inc. On June 10, 2015, we acquired 100% of the outstanding shares of Borderfree. Borderfree provides cross-border ecommerce solutions through a proprietary technology and services platform that enables retailers to transact with consumers around the world. Borderfree is reported within our Global Ecommerce segment (see Note 2). The purchase price was $386 million , net of $88 million of cash acquired. In addition, we also paid $10 million for the accelerated vesting and settlement of Borderfree stock-based compensation awards and $8 million of transaction costs. The $10 million of expense related to Borderfree stock-based compensation awards was recognized as selling, general and administrative expenses and the $8 million of transaction costs was recognized within other (income) expense, net in the Condensed Consolidated Statements of Income. The preliminary allocation of the purchase price to the fair values of assets acquired and liabilities assumed was as follows: Accounts receivable $ 16,964 Fixed assets 7,293 Goodwill 285,727 Intangible assets 156,800 Accounts payable and other current liabilities (35,117 ) Deferred taxes, net (46,819 ) Other assets and liabilities, net 1,412 $ 386,260 Goodwill represents the excess of the purchase price over the fair values of assets acquired and liabilities assumed. Goodwill is primarily attributable to expected growth opportunities, synergies and other benefits that we believe will result from combining the operations of Borderfree with our operations. Goodwill is not deductible for tax purposes. Intangible assets acquired consist of the following: Value Amortization period Customer Relationships $ 135,500 10 years Developed Technology 12,600 5 years Trade Names 8,700 5 years $ 156,800 The allocation of the purchase price to the fair values of assets acquired and liabilities assumed is preliminary and subject to further adjustments as we obtain additional information during the measurement period, which will not exceed 12 months from the acquisition date. Adjustments in the purchase price allocation may require a recasting of the amounts allocated to goodwill retroactive to the period in which the acquisition occurred. The results of operations of Borderfree are included in our consolidated results from the date of acquisition. Our consolidated operating results for the three and six months ended June 30, 2015 include revenue of $7 million . On a supplemental pro forma basis, had we acquired Borderfree on January 1, 2014, our revenues would have been higher by $22 million and $31 million for the three months ended June 30, 2015 and 2014 , respectively, and $47 million and $57 million for the six months ended June 30, 2015 and 2014 , respectively. The impact on our earnings would not have been material. Real Time Content, Inc. On May 1, 2015, we acquired Real Time Content, Inc. (RTC) for $6 million , net of cash acquired. RTC provides technology that enables clients to provide personalized interactive video communications to their customers. RTC is reported within our Software Solutions segment. Divestiture On May 29, 2015, we sold Imagitas, for net proceeds of $291 million and recognized a pre-tax gain of $109 million , which was reported within other (income) expense, net in the Condensed Consolidated Statements of Income. |
Discontinued Operations and Ass
Discontinued Operations and Assets Held for Sale | 6 Months Ended |
Jun. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations and Assets Held for Sale | Discontinued Operations and Assets Held For Sale Discontinued Operations Loss from discontinued operations, net of tax for the three and six months ended June 30, 2015 consisted of post-closing and purchase price adjustments in connection with the sale of our Management Services business in 2014. The table below shows selected financial information for discontinued operations for three and six months ended June 30, 2014 : Three Months Ended June 30, 2014 PBMS IMS Nordic furniture business DIS Total Revenue $ — $ — $ — $ 3,567 $ 3,567 Income from operations before taxes $ 580 $ — $ — $ 1,018 $ 1,598 Gain on sale — 831 — 25,198 26,029 Income before taxes 580 831 — 26,216 27,627 Tax provision 217 321 — 20,372 20,910 Income from discontinued operations $ 363 $ 510 $ — $ 5,844 $ 6,717 Six Months Ended June 30, 2014 PBMS IMS Nordic furniture business DIS Total Revenue $ — $ — $ — $ 19,858 $ 19,858 Income before taxes $ 334 $ 308 $ 345 $ 3,429 $ 4,416 Gain on sale 130 1,994 — 25,198 27,322 Income before taxes 464 2,302 345 28,627 31,738 Tax provision 196 850 97 21,077 22,220 Income from discontinued operations $ 268 $ 1,452 $ 248 $ 7,550 $ 9,518 Assets Held for Sale Assets held for sale at December 31, 2014 included the fair value of our former corporate headquarters building and the value of a lease portfolio. The lease portfolio was sold in January 2015 and the corporate headquarters building was sold in June 2015 (see Note 10 for further details). |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The calculations of basic and diluted earnings per share are presented below: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Net income from continuing operations $ 152,509 $ 87,548 $ 232,964 $ 129,420 (Loss) income from discontinued operations, net of tax (739 ) 6,717 (582 ) 9,518 Net income - Pitney Bowes Inc. (numerator for diluted EPS) 151,770 94,265 232,382 138,938 Less: Preference stock dividend 10 11 21 22 Income attributable to common stockholders (numerator for basic EPS) $ 151,760 $ 94,254 $ 232,361 $ 138,916 Denominator: Weighted-average shares used in basic EPS 201,712 202,662 201,504 202,480 Effect of dilutive shares: Conversion of Preferred stock and Preference stock 324 345 329 349 Employee stock plans 804 1,463 801 1,272 Weighted-average shares used in diluted EPS 202,840 204,470 202,634 204,101 Basic earnings per share (1): Continuing operations $ 0.76 $ 0.43 $ 1.16 $ 0.64 Discontinued operations — 0.03 — 0.05 Net income $ 0.75 $ 0.47 $ 1.15 $ 0.69 Diluted earnings per share (1): Continuing operations $ 0.75 $ 0.43 $ 1.15 $ 0.63 Discontinued operations — 0.03 — 0.05 Net income $ 0.75 $ 0.46 $ 1.15 $ 0.68 Anti-dilutive shares not used in calculating diluted weighted-average shares: 6,395 6,062 7,313 7,943 (1) The sum of earnings per share amounts may not equal the totals due to rounding. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are stated at the lower of cost or market. Cost is determined on the last-in, first-out (LIFO) basis for most U.S. inventories and on the first-in, first-out (FIFO) basis for most non-U.S. inventories. Inventories at June 30, 2015 and December 31, 2014 consisted of the following: June 30, December 31, Raw materials and work in process $ 36,804 $ 37,175 Supplies and service parts 45,179 33,760 Finished products 32,445 26,992 Inventory at FIFO cost 114,428 97,927 Excess of FIFO cost over LIFO cost (13,356 ) (13,100 ) Total inventory, net $ 101,072 $ 84,827 |
Finance Assets
Finance Assets | 6 Months Ended |
Jun. 30, 2015 | |
Receivables [Abstract] | |
Finance Assets | Finance Assets Finance Receivables Finance receivables are comprised of sales-type lease receivables and unsecured revolving loan receivables. Sales-type lease receivables are generally due in monthly, quarterly or semi-annual installments over periods ranging from three to five years. Loan receivables arise primarily from financing services offered to our customers for postage and supplies. Loan receivables are generally due each month; however, customers may rollover outstanding balances. Interest is recognized on loan receivables using the effective interest method and related annual fees are initially deferred and recognized ratably over the annual period covered. Customer acquisition costs are expensed as incurred. Finance receivables at June 30, 2015 and December 31, 2014 consisted of the following: June 30, 2015 December 31, 2014 North America International Total North America International Total Sales-type lease receivables Gross finance receivables $ 1,236,030 $ 329,171 $ 1,565,201 $ 1,286,624 $ 366,669 $ 1,653,293 Unguaranteed residual values 101,622 16,825 118,447 105,205 18,291 123,496 Unearned income (262,081 ) (74,024 ) (336,105 ) (270,196 ) (83,110 ) (353,306 ) Allowance for credit losses (7,973 ) (3,721 ) (11,694 ) (10,281 ) (5,129 ) (15,410 ) Net investment in sales-type lease receivables 1,067,598 268,251 1,335,849 1,111,352 296,721 1,408,073 Loan receivables Loan receivables 359,033 50,888 409,921 376,987 47,665 424,652 Allowance for credit losses (10,193 ) (1,719 ) (11,912 ) (10,912 ) (1,788 ) (12,700 ) Net investment in loan receivables 348,840 49,169 398,009 366,075 45,877 411,952 Net investment in finance receivables $ 1,416,438 $ 317,420 $ 1,733,858 $ 1,477,427 $ 342,598 $ 1,820,025 Allowance for Credit Losses and Aging of Receivables We estimate our finance receivable risks and provide an allowance for credit losses accordingly. We evaluate the adequacy of the allowance for credit losses based on historical loss experience, the nature and volume of our portfolios, adverse situations that may affect a client's ability to pay, prevailing economic conditions and our ability to manage the collateral and make adjustments to the allowance as necessary. This evaluation is inherently subjective and actual results may differ significantly from estimated reserves. We establish credit approval limits based on the credit quality of the client and the type of equipment financed. Our policy is to discontinue revenue recognition for lease receivables that are more than 120 days past due and for unsecured loan receivables that are more than 90 days past due. We resume revenue recognition when payments reduce the account balance aging to 60 days or less past due. Finance receivables deemed uncollectible are written off against the allowance after all collection efforts have been exhausted and management deems the account to be uncollectible. We believe that our finance receivable credit risk is limited because of our large number of clients, small account balances for most of our clients, and geographic and industry diversification. Activity in the allowance for credit losses for the six months ended June 30, 2015 and 2014 was as follows: Sales-type Lease Receivables Loan Receivables North America International North America International Total Balance at January 1, 2015 $ 10,281 $ 5,129 $ 10,912 $ 1,788 $ 28,110 Amounts charged to expense 112 (447 ) 3,913 554 4,132 Write-offs and other (2,420 ) (961 ) (4,632 ) (623 ) (8,636 ) Balance at June 30, 2015 $ 7,973 $ 3,721 $ 10,193 $ 1,719 $ 23,606 Sales-type Lease Receivables Loan Receivables North America International North America International Total Balance at January 1, 2014 $ 14,165 $ 9,703 $ 11,165 $ 1,916 $ 36,949 Amounts charged to expense 2,360 (350 ) 4,742 1,034 7,786 Write-offs and other (3,382 ) (1,749 ) (5,132 ) (801 ) (11,064 ) Balance at June 30, 2014 $ 13,143 $ 7,604 $ 10,775 $ 2,149 $ 33,671 Aging of Receivables The aging of gross finance receivables at June 30, 2015 and December 31, 2014 was as follows: June 30, 2015 Sales-type Lease Receivables Loan Receivables North America International North America International Total 1 - 30 days $ 1,171,926 $ 310,382 $ 344,290 $ 48,546 $ 1,875,144 31 - 60 days 22,927 5,785 8,274 1,598 38,584 61 - 90 days 18,667 3,575 2,790 340 25,372 > 90 days 22,510 9,429 3,679 404 36,022 Total $ 1,236,030 $ 329,171 $ 359,033 $ 50,888 $ 1,975,122 Past due amounts > 90 days Still accruing interest $ 6,658 $ 2,819 $ — $ — $ 9,477 Not accruing interest 15,852 6,610 3,679 404 26,545 Total $ 22,510 $ 9,429 $ 3,679 $ 404 $ 36,022 December 31, 2014 Sales-type Lease Receivables Loan Receivables North America International North America International Total 1 - 30 days $ 1,217,623 $ 347,236 $ 359,672 $ 45,678 $ 1,970,209 31 - 60 days 23,242 6,207 9,245 1,201 39,895 61 - 90 days 24,198 4,494 3,498 413 32,603 > 90 days 21,561 8,732 4,572 373 35,238 Total $ 1,286,624 $ 366,669 $ 376,987 $ 47,665 $ 2,077,945 Past due amounts > 90 days Still accruing interest $ 5,931 $ 2,517 $ — $ — $ 8,448 Not accruing interest 15,630 6,215 4,572 373 26,790 Total $ 21,561 $ 8,732 $ 4,572 $ 373 $ 35,238 Credit Quality The extension of credit and management of credit lines to new and existing clients uses a combination of an automated credit score, where available, and a detailed manual review of the client’s financial condition and, when applicable, payment history. Once credit is granted, the payment performance of the client is managed through automated collections processes and is supplemented with direct follow up should an account become delinquent. We have robust automated collections and extensive portfolio management processes. The portfolio management processes ensure that our global strategy is executed, collection resources are allocated appropriately and enhanced tools and processes are implemented as needed. We use a third party to score the majority of the North America portfolio on a quarterly basis using a commercial credit score. We do not use a third party to score our international portfolio because the cost to do so is prohibitive, given that it is a localized process and there is no single credit score model that covers all countries. The table below shows the North America portfolio at June 30, 2015 and December 31, 2014 by relative risk class (low, medium, high) based on the relative scores of the accounts within each class. The relative scores are determined based on a number of factors, including the company type, ownership structure, payment history and financial information. A fourth class is shown for accounts that are not scored. Absence of a score is not indicative of the credit quality of the account. The degree of risk, as defined by the third party, refers to the relative risk that an account in the next 12 month period may become delinquent. • 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, December 31, Sales-type lease receivables Low $ 923,475 $ 936,979 Medium 215,444 230,799 High 43,248 45,202 Not Scored 53,863 73,644 Total $ 1,236,030 $ 1,286,624 Loan receivables Low $ 248,331 $ 259,436 Medium 89,725 96,243 High 10,287 10,913 Not Scored 10,690 10,395 Total $ 359,033 $ 376,987 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets Intangible assets consisted of the following: June 30, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 453,879 $ (257,095 ) $ 196,784 $ 337,438 $ (263,121 ) $ 74,317 Supplier relationships — — — 29,000 (27,913 ) 1,087 Software & technology 168,695 (151,291 ) 17,404 160,825 (154,610 ) 6,215 Trademarks & other 35,959 (26,827 ) 9,132 33,079 (32,525 ) 554 Total intangible assets $ 658,533 $ (435,213 ) $ 223,320 $ 560,342 $ (478,169 ) $ 82,173 Amortization expense was $8 million and $6 million for the three months ended June 30, 2015 and 2014 , respectively and $16 million and $12 million , for the six months ended June 30, 2015 and 2014 , respectively. In 2015, we acquired certain intangible assets in connection with the acquisitions of Borderfree (see Note 3). The change in supplier relationships is the result of the sale of Imagitas. Future amortization expense for intangible assets as of June 30, 2015 was as follows: Remaining for year ending December 31, 2015 $ 22,328 Year ending December 31, 2016 39,995 Year ending December 31, 2017 29,077 Year ending December 31, 2018 26,470 Year ending December 31, 2019 23,415 Thereafter 82,035 Total $ 223,320 Actual amortization expense may differ from the amounts above due to, among other things, fluctuations in foreign currency exchange rates, impairments, acquisitions and accelerated amortization. Goodwill The changes in the carrying value of goodwill for the six months ended June 30, 2015 were as follows: December 31, 2014 Acquisition Divestiture Foreign currency translation June 30, North America Mailing $ 309,448 $ — $ — $ (9,949 ) $ 299,499 International Mailing 162,146 — — (8,662 ) 153,484 Small & Medium Business Solutions 471,594 — — (18,611 ) 452,983 Production Mail 110,837 — — (2,786 ) 108,051 Presort Services 195,140 — — — 195,140 Enterprise Business Solutions 305,977 — — (2,786 ) 303,191 Software Solutions 677,008 5,792 — (661 ) 682,139 Global Ecommerce 23,910 285,727 — — 309,637 Digital Commerce Solutions 700,918 291,519 — (661 ) 991,776 Other 194,232 — (194,232 ) — — Total goodwill $ 1,672,721 $ 291,519 $ (194,232 ) $ (22,058 ) $ 1,747,950 |
Fair Value Measurements and Der
Fair Value Measurements and Derivative Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Derivative Instruments | Fair Value Measurements and Derivative Instruments We measure certain financial assets and liabilities at fair value on a recurring basis. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. An entity is required to classify certain assets and liabilities measured at fair value based on the following fair value hierarchy that prioritizes the inputs used to measure fair value: 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. The following tables show, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis at June 30, 2015 and December 31, 2014 . Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect its placement within the fair value hierarchy. June 30, 2015 Level 1 Level 2 Level 3 Total Assets: Investment securities Money market funds / commercial paper $ 135,822 $ 228,787 $ — $ 364,609 Equity securities — 25,434 — 25,434 Commingled fixed income securities — 22,709 — 22,709 U.S. Government, federal agencies and municipalities 112,508 19,206 — 131,714 Corporate notes and bonds — 65,840 — 65,840 Mortgage-backed / asset-backed securities — 166,326 — 166,326 Derivatives Foreign exchange contracts — 838 — 838 Total assets $ 248,330 $ 529,140 $ — $ 777,470 Liabilities: Derivatives Foreign exchange contracts $ — $ (4,530 ) $ — $ (4,530 ) Total liabilities $ — $ (4,530 ) $ — $ (4,530 ) December 31, 2014 Level 1 Level 2 Level 3 Total Assets: Investment securities Money market funds / commercial paper $ 505,643 $ 193,986 $ — $ 699,629 Equity securities — 27,409 — 27,409 Commingled fixed income securities — 24,077 — 24,077 U.S. Government, federal agencies and municipalities 113,974 24,006 — 137,980 Corporate notes and bonds — 67,448 — 67,448 Mortgage-backed / asset-backed securities — 156,614 — 156,614 Derivatives Foreign exchange contracts — 1,386 — 1,386 Total assets $ 619,617 $ 494,926 $ — $ 1,114,543 Liabilities: Derivatives Foreign exchange contracts $ — $ (2,988 ) $ — $ (2,988 ) Total liabilities $ — $ (2,988 ) $ — $ (2,988 ) Investment Securities The valuation of investment securities is based on the market approach using inputs that are observable, or can be corroborated by observable data, in an active marketplace. The following information relates to our classification into the fair value hierarchy: • 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: Equity securities are comprised of mutual funds investing in U.S. and foreign common stock. These mutual funds are classified as Level 2 as they are not separately listed on an exchange. • Commingled fixed income securities: 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. The value of the funds is based on the market 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 commingled funds are not listed on an exchange in an active market and are classified as Level 2. • U.S. Government, federal agencies and municipalities: Securities are classified as Level 1 where active, high volume trades for identical securities exist. Valuation adjustments are not applied to these securities. Securities valued using quoted market prices for similar securities or benchmarking model derived prices to quoted market prices and trade data for identical or comparable securities are classified as Level 2. • Corporate notes and bonds: Corporate notes and bonds are valued using recently executed transactions, market price quotations where observable, or bond spreads. The spread data used are for the same maturity as the security. These securities are classified as Level 2. • Mortgage-backed / asset-backed securities: These securities are valued based on external pricing indices. When external index pricing is not observable, these securities are valued based on external price/spread data. These securities are classified as Level 2. Available-For-Sale Securities Certain investment securities are classified as available-for-sale and recorded at fair value in the unaudited Condensed Consolidated Balance Sheets as cash and cash equivalents, short-term investments and other assets depending on the type of investment and maturity. Unrealized holding gains and losses are recorded, net of tax, in accumulated other comprehensive loss (AOCL). Available-for-sale securities at June 30, 2015 and December 31, 2014 consisted of the following: June 30, 2015 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Government, federal agencies and municipalities $ 131,031 $ 1,927 $ (1,244 ) $ 131,714 Corporate notes and bonds 65,396 1,112 (668 ) 65,840 Mortgage-backed / asset-backed securities 165,095 2,360 (1,129 ) 166,326 Total $ 361,522 $ 5,399 $ (3,041 ) $ 363,880 December 31, 2014 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Government, federal agencies and municipalities $ 135,839 $ 2,905 $ (764 ) $ 137,980 Corporate notes and bonds 66,170 1,569 (291 ) 67,448 Mortgage-backed / asset-backed securities 155,330 2,362 (1,078 ) 156,614 Total $ 357,339 $ 6,836 $ (2,133 ) $ 362,042 At June 30, 2015 , investment securities that were in a loss position for 12 or more continuous months had aggregate unrealized holding losses of $1 million and an estimated fair value of $33 million , and investment securities that were in a loss position for less than 12 continuous months had aggregate unrealized holding losses of $2 million and an estimated fair value of $95 million . At December 31, 2014 , investment securities that were in a loss position for 12 or more continuous months had aggregate unrealized holding losses of $1 million and an estimated fair value of $42 million , and investment securities that were in a loss position for less than 12 continuous months had aggregate unrealized holding losses of $1 million and an estimated fair value of $88 million . We have not recognized an other-than-temporary impairment on any of the investment securities in an unrealized loss position because we do not intend to sell these securities, it is more likely than not that we will not be required to sell these securities before recovery of the unrealized losses and we expect to receive the contractual principal and interest on these investment securities. Scheduled maturities of available-for-sale securities at June 30, 2015 were as follows: Amortized cost Estimated fair value Within 1 year $ 64,668 $ 64,716 After 1 year through 5 years 63,180 64,229 After 5 years through 10 years 57,909 58,599 After 10 years 175,765 176,336 Total $ 361,522 $ 363,880 The expected payments on mortgage-backed and asset-backed securities may not coincide with their contractual maturities as borrowers have the right to prepay obligations with or without prepayment penalties. We have not experienced any significant write-offs in our investment portfolio. The majority of our mortgage-backed securities are either guaranteed or supported by the U.S. Government. We have no investments in inactive markets that would warrant a possible change in our pricing methods or classification within the fair value hierarchy. Further, we have no investments in auction rate securities. Derivative Instruments In the normal course of business, we are exposed to the impact of changes in foreign currency exchange rates and interest rates. We limit these risks by following established risk management policies and procedures, including the use of derivatives. We use derivative instruments to limit the effects of exchange rate fluctuations on financial results and manage the related cost of debt. We do not use derivatives for trading or speculative purposes. We record our derivative instruments at fair value and the accounting for changes in the fair value depends on the intended use of the derivative, the resulting designation and the effectiveness of the instrument in offsetting the risk exposure it is designed to hedge. The valuation of foreign exchange derivatives is based on the market approach using observable market inputs, such as foreign currency spot and forward rates and yield curves. As required by the fair value measurements guidance, we also incorporate counterparty credit risk and our credit risk into the fair value measurement of our derivative assets and liabilities, respectively. We derive credit risk from observable data in the credit default swap market. We have not seen a material change in the creditworthiness of those banks acting as derivative counterparties. The fair value of derivative instruments at June 30, 2015 and December 31, 2014 was as follows: Designation of Derivatives Balance Sheet Location June 30, December 31, Derivatives designated as hedging instruments Foreign exchange contracts Other current assets and prepayments $ 518 $ 762 Accounts payable and accrued liabilities: (415 ) — Derivatives not designated as hedging instruments Foreign exchange contracts Other current assets and prepayments 320 624 Accounts payable and accrued liabilities: (4,115 ) (2,988 ) Total derivative assets $ 838 $ 1,386 Total derivative liabilities (4,530 ) (2,988 ) Total net derivative liabilities $ (3,692 ) $ (1,602 ) Foreign Exchange Contracts We enter into foreign exchange contracts to mitigate the currency risk associated with the anticipated purchase of inventory between affiliates and from third parties. These contracts are designated as cash flow hedges. The effective portion of the gain or loss on cash flow hedges is included in AOCL in the period that the change in fair value occurs and is reclassified to earnings in the period that the hedged item is recorded in earnings. At June 30, 2015 and December 31, 2014 , we had outstanding contracts associated with these anticipated transactions with notional amounts of $18 million . The amounts included in AOCL at June 30, 2015 will be recognized in earnings within the next 12 months . No amount of ineffectiveness was recorded in earnings for these designated cash flow hedges. The following represents the results of cash flow hedging relationships for the three and six months ended June 30, 2015 and 2014 : Three 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 2015 2014 2015 2014 Foreign exchange contracts $ (418 ) $ 17 Revenue $ 432 $ (346 ) Cost of sales 190 153 $ 622 $ (193 ) 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 2015 2014 2015 2014 Foreign exchange contracts $ 755 $ (52 ) Revenue $ 828 $ (580 ) Cost of sales 585 352 $ 1,413 $ (228 ) We also enter into foreign exchange contracts to minimize the impact of exchange rate fluctuations on short-term intercompany loans and related interest that are denominated in a foreign currency. The revaluation of the intercompany loans and interest and the mark-to-market adjustment on the derivatives are both recorded in earnings. All outstanding contracts at June 30, 2015 mature within 12 months. The following represents the results of our non-designated derivative instruments for the three and six months ended June 30, 2015 and 2014 : Three Months Ended June 30, Derivative Gain (Loss) Recognized in Earnings Derivatives Instrument Location of Derivative Gain (Loss) 2015 2014 Foreign exchange contracts Selling, general and administrative expense $ (4,131 ) $ (2,622 ) Six Months Ended June 30, Derivative Gain (Loss) Recognized in Earnings Derivatives Instrument Location of Derivative Gain (Loss) 2015 2014 Foreign exchange contracts Selling, general and administrative expense $ (3,577 ) $ (3,304 ) Credit-Risk-Related Contingent Features Certain derivative instruments contain credit-risk-related contingent features that would require us to post collateral based on a combination of our long-term senior unsecured debt ratings and the net fair value of our derivatives. At June 30, 2015 , the maximum amount of collateral that we would have been required to post had the credit-risk-related contingent features been triggered was $4 million . Fair Value of Financial Instruments Our financial instruments include cash and cash equivalents, investment securities, accounts receivable, loan receivables, derivative instruments, accounts payable and debt. The carrying value for cash and cash equivalents, accounts receivable, loans receivable, and accounts payable approximate fair value because of the short maturity of these instruments. The fair value of our debt is estimated based on recently executed transactions and market price quotations. These inputs used to determine the fair value of our debt were classified as Level 2 in the fair value hierarchy. The carrying value and estimated fair value of our debt at June 30, 2015 and December 31, 2014 were as follows: June 30, 2015 December 31, 2014 Carrying value $ 2,994,190 $ 3,252,006 Fair value $ 3,140,259 $ 3,440,383 |
Restructuring Charges and Asset
Restructuring Charges and Asset Impairment | 6 Months Ended |
Jun. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges and Asset Impairment | Restructuring Charges and Asset Impairment Restructuring charges The tables below show the activity in restructuring reserves for our Operational Excellence plan, implemented in 2014, and our other plans for the six months ended June 30, 2015 and 2014 and includes amounts for both continuing operations and discontinued operations. Operational Excellence Severance and benefits costs Other exit costs Total Balance at January 1, 2015 $ 78,105 $ 8,154 $ 86,259 Expenses, net 9,984 (198 ) 9,786 Cash payments (26,447 ) (2,389 ) (28,836 ) Balance at June 30, 2015 $ 61,642 $ 5,567 $ 67,209 Balance at January 1, 2014 $ 42,427 $ 7,622 $ 50,049 Expenses, net (1) 17,162 2,852 20,014 Cash payments (26,732 ) (4,699 ) (31,431 ) Balance at June 30, 2014 $ 32,857 $ 5,775 $ 38,632 (1) See Note 12 for additional restructuring charge. Other Plans Severance and benefits costs Other exit costs Total Balance at January 1, 2015 $ 3,731 $ 189 $ 3,920 Expenses, net (726 ) — (726 ) Cash payments (1,824 ) (115 ) (1,939 ) Balance at June 30, 2015 $ 1,181 $ 74 $ 1,255 Balance at January 1, 2014 $ 16,131 $ 392 $ 16,523 Expenses, net (5,245 ) — (5,245 ) Cash payments (2,026 ) (73 ) (2,099 ) Balance at June 30, 2014 $ 8,860 $ 319 $ 9,179 The majority of the remaining restructuring reserves are expected to be paid over the next 12 to 24 months ; however, due to certain international labor laws and long-term lease agreements, some payments will extend beyond 24 months . We expect to fund these payments from cash flows from operations. Asset impairment During the second quarter of 2015, we sold our world headquarters building for $39 million and recorded a loss on the sale of $5 million . The loss was recognized in restructuring charges and asset impairments, net in the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2015. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt Commercial Paper At June 30, 2015 , we had $100 million of commercial paper outstanding at an effective interest rate of 0.49% . This amount is included in current portion of long-term debt and notes payable in the Condensed Consolidated Balance Sheets. There were no outstanding commercial paper borrowings at December 31, 2014 . Long-term Debt Interest rate June 30, 2015 December 31, 2014 Notes due March 2015 5.0% $ — $ 274,879 Notes due January 2016 4.75% 370,914 370,914 Notes due September 2017 5.75% 385,109 385,109 Notes due March 2018 5.6% 250,000 250,000 Notes due May 2018 4.75% 350,000 350,000 Notes due March 2019 6.25% 300,000 300,000 Notes due November 2022 5.25% 110,000 110,000 Notes due March 2024 4.625% 500,000 500,000 Notes due January 2037 5.25% 115,041 115,041 Notes due March 2043 6.7% 425,000 425,000 Term loans Variable 50,000 130,000 Other debt 16,919 16,000 Principal amount 2,872,983 3,226,943 Less: unamortized discount 5,921 6,653 Plus: unamortized interest rate swap proceeds 27,128 31,716 Total debt 2,894,190 3,252,006 Less: current portion long-term debt 421,103 324,879 Long-term debt $ 2,473,087 $ 2,927,127 Through the six months ended June 30, 2015 , we repaid the $275 million , 5.0% notes that matured in March and $80 million of term loans. |
Pensions and Other Benefit Prog
Pensions and Other Benefit Programs | 6 Months Ended |
Jun. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Pensions and Other Benefit Programs | Pensions and Other Benefit Programs The components of net periodic benefit cost (income) were as follows: Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans United States Foreign Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2015 2014 2015 2014 2015 2014 Service cost $ 38 $ 2,023 $ 555 $ 913 $ 640 $ 697 Interest cost 18,305 19,416 6,122 7,276 2,151 2,480 Expected return on plan assets (25,958 ) (25,956 ) (8,935 ) (9,980 ) — — Amortization of transition credit — — (3 ) (3 ) — — Amortization of prior service cost (credit) 2 2 (16 ) (15 ) 74 40 Amortization of net actuarial loss 7,007 6,264 1,509 2,103 1,562 1,502 Settlement / curtailment (1) — 821 — — — — Net periodic benefit (income) cost $ (606 ) $ 2,570 $ (768 ) $ 294 $ 4,427 $ 4,719 Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans United States Foreign Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 2015 2014 Service cost $ 76 $ 4,438 $ 1,120 $ 1,821 $ 1,319 $ 1,425 Interest cost 37,164 38,832 12,185 14,445 4,526 4,942 Expected return on plan assets (52,002 ) (51,912 ) (17,774 ) (19,805 ) — — Amortization of transition credit — — (5 ) (5 ) — — Amortization of prior service cost (credit) 4 4 (33 ) (30 ) 148 80 Amortization of net actuarial loss 14,655 12,424 2,989 4,179 3,953 3,024 Settlement / curtailment (1) — 3,371 — — — — Net periodic benefit (income) cost $ (103 ) $ 7,157 $ (1,518 ) $ 605 $ 9,946 $ 9,471 (1) Included in restructuring charges and asset impairments, net in the Condensed Consolidated Statements of Income. Through June 30, 2015 and June 30, 2014 , contributions to our U.S. pension plans were $4 million and $14 million , respectively, and contributions to our foreign plans were $11 million and $14 million , respectively. Nonpension postretirement benefit plan contributions were $11 million and $12 million through June 30, 2015 and June 30, 2014 , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate for the three months ended June 30, 2015 and 2014 was 25.0% and 33.5% , respectively, and the effective tax rate for the six months ended June 30, 2015 and 2014 was 29.8% and 28.2% , respectively. The effective tax rate for the three and six months ended June 30, 2015 includes a $20 million benefit resulting from the disposition of Imagitas. The effective tax rate for the six months ended June 30, 2015 also includes a $3 million charge from the write-off of deferred tax assets associated with the expiration of out-of-the-money vested stock options and the vesting of restricted stock units. The effective tax rate for six months ended June 30, 2014 includes a benefit of $6 million from the resolution of tax examinations and incremental tax benefit associated with the early extinguishment of debt. As is the case with other large corporations, our tax returns are examined each year by tax authorities in the U.S., other countries and local jurisdictions in which we have operations. The Internal Revenue Service examinations of tax years prior to 2011 are closed to audit. Other than the pending application of legal principles to specific issues arising in earlier years, only post-2009 Canadian tax years are subject to examination. Other significant tax filings subject to examination include various post-2004 U.S. state and local, post-2007 German, and post-2010 French and U.K. tax filings. We have other less significant tax filings currently under examination or subject to examination. |
Noncontrolling Interests (Prefe
Noncontrolling Interests (Preferred Stockholders' Equity in Subsidiaries) | 6 Months Ended |
Jun. 30, 2015 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests (Preferred Stockholders' Equity in Subsidiaries) | Noncontrolling Interests (Preferred Stockholders’ Equity in Subsidiaries) Pitney Bowes International Holdings, Inc. (PBIH), a subsidiary of the Company, has 300,000 shares, or $300 million , of outstanding perpetual voting preferred stock (PBIH Preferred Stock) held by certain institutional investors. The holders of PBIH Preferred Stock are entitled as a group to 25% of the combined voting power of all classes of capital stock of PBIH. All outstanding common stock of PBIH, representing the remaining 75% of the combined voting power of all classes of capital stock, is owned directly or indirectly by the Company. The PBIH Preferred Stock is entitled to cumulative dividends at a rate of 6.125% through April 30, 2016. Commencing October 30, 2016, the PBIH Preferred Stock is redeemable, in whole or in part, at the option of PBIH. If the PBIH Preferred Stock is not redeemed in whole on October 30, 2016, the dividend rate increases 50% and will increase 50% every six months thereafter. No dividends were in arrears at June 30, 2015 or December 31, 2014 . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the ordinary course of business, we are routinely defendants in, or party to a number of pending and threatened legal actions. These may involve litigation by or against us relating to, among other things, contractual rights under vendor, insurance or other contracts; intellectual property or patent rights; equipment, service, payment or other disputes with clients; or disputes with employees. Some of these actions may be brought as a purported class action on behalf of a purported class of employees, customers or others. In management's opinion, the potential liability, if any, that may result from these actions, either individually or collectively, is not reasonably expected to have a material effect on our financial position, results of operations or cash flows. However, as litigation is inherently unpredictable, there can be no assurances in this regard. In December 2013, we received a Civil Investigative Demand (CID) from the Department of Justice (DOJ) pursuant to the False Claims Act requesting documents and information relating to compliance with certain postal regulatory requirements in our Presort Services business. We provided information to the DOJ in response to letter requests and the CID. Our ongoing discussions with the DOJ regarding a resolution of this matter have now resulted in a settlement in principle. As a result, we accrued $7 million , net of estimated recoveries. The charge is recorded in other (income) expense, net in the Condensed Consolidated Statements of Income. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders ’ Equity Changes in stockholders’ equity for the six months ended June 30, 2015 and 2014 were as follows: Preferred stock Preference stock Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock Total equity Balance at January 1, 2015 $ 1 $ 548 $ 323,338 $ 178,852 $ 4,897,708 $ (846,156 ) $ (4,477,032 ) $ 77,259 Net income — — — — 232,382 — — 232,382 Other comprehensive loss — — — — — (46,350 ) — (46,350 ) Dividends paid - Common stock — — — — (75,627 ) — — (75,627 ) Dividends paid - Preference stock — — — — (21 ) — — (21 ) Issuance of common stock — — — (34,005 ) — — 26,659 (7,346 ) Conversion to common stock (26 ) — (543 ) — — 569 — Stock-based compensation expense — — — 11,067 — — — 11,067 Balance at June 30, 2015 $ 1 $ 522 $ 323,338 $ 155,371 $ 5,054,442 $ (892,506 ) $ (4,449,804 ) $ 191,364 Preferred stock Preference stock Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock Total equity Balance at January 1, 2014 $ 4 $ 591 $ 323,338 $ 196,977 $ 4,715,564 $ (574,556 ) $ (4,456,742 ) $ 205,176 Net income — — — — 138,938 — — 138,938 Other comprehensive loss — — — — — 15,205 — 15,205 Dividends paid - Common stock — — — — (75,974 ) — — (75,974 ) Dividends paid - Preference stock — — — — (22 ) — — (22 ) Issuance of common stock — — — (24,212 ) — — 22,189 (2,023 ) Conversion to common stock (3 ) (28 ) — (656 ) — — 687 — Stock-based compensation expense — — — 7,976 — — — 7,976 Purchase of subsidiary shares from noncontrolling interest — — — (7,520 ) — — — (7,520 ) Balance at June 30, 2014 $ 1 $ 563 $ 323,338 $ 172,565 $ 4,778,506 $ (559,351 ) $ (4,433,866 ) $ 281,756 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Reclassifications out of accumulated other comprehensive loss for the three and six months ended June 30, 2015 and 2014 were as follows: Amount Reclassified from AOCL (a) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Gains (losses) on cash flow hedges Revenue $ (432 ) $ (346 ) $ (828 ) $ (580 ) Cost of sales (190 ) 153 (585 ) 352 Interest expense (507 ) (507 ) (1,014 ) (1,014 ) Total before tax (1,129 ) (700 ) (2,427 ) (1,242 ) Tax benefit 436 269 938 479 Net of tax $ (693 ) $ (431 ) $ (1,489 ) $ (763 ) Losses on available for sale securities Unrealized losses $ (18 ) $ (505 ) $ (42 ) $ (852 ) Tax benefit 7 186 16 314 Net of tax $ (11 ) $ (319 ) $ (26 ) $ (538 ) Pension and Postretirement Benefit Plans (b) Transition credit $ 3 $ 3 $ 5 $ 5 Prior service costs (61 ) (27 ) (120 ) (54 ) Actuarial losses (10,056 ) (9,869 ) (21,595 ) (19,627 ) Total before tax (10,114 ) (9,893 ) (21,710 ) (19,676 ) Tax benefit 3,614 3,613 7,781 7,254 Net of tax $ (6,500 ) $ (6,280 ) $ (13,929 ) $ (12,422 ) (a) Amounts in parentheses indicate debits (reductions) to income. (b) These items are included in the computation of net periodic costs of defined benefit pension plans and nonpension postretirement benefit plans (see Note 12 for additional details). Changes in accumulated other comprehensive loss for the six months ended June 30, 2015 and 2014 were as follows: (Gains) losses on cash flow hedges (Gains) losses on available for sale securities Pension and postretirement benefit plans Foreign currency items Total Balance at January 1, 2015 $ (4,689 ) $ 2,966 $ (786,079 ) $ (58,354 ) $ (846,156 ) Other comprehensive loss before reclassifications (a) (1,273 ) (1,499 ) — (59,022 ) (61,794 ) Amounts reclassified from accumulated other comprehensive loss (a), (b) 1,489 26 13,929 — 15,444 Net current period other comprehensive income (loss) 216 (1,473 ) 13,929 (59,022 ) (46,350 ) Balance at June 30, 2015 $ (4,473 ) $ 1,493 $ (772,150 ) $ (117,376 ) $ (892,506 ) (Gains) losses on cash flow hedges (Gains) losses on available for sale securities Pension and postretirement benefit plans Foreign currency items Total Balance at January 1, 2014 $ (6,380 ) $ (1,769 ) $ (601,421 ) $ 35,014 $ (574,556 ) Other comprehensive income (loss) before reclassifications (a) 27 3,657 — (2,202 ) 1,482 Amounts reclassified from accumulated other comprehensive loss (a), (b) 763 538 12,422 — 13,723 Net current period other comprehensive income (loss) 790 4,195 12,422 (2,202 ) 15,205 Balance at June 30, 2014 $ (5,590 ) $ 2,426 $ (588,999 ) $ 32,812 $ (559,351 ) (a) Amounts are net of tax. Amounts in parentheses indicate debits to AOCL. (b) See table above for additional details of these reclassifications. |
Description of Business and B26
Description of Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2015-05, Intangibles - Goodwill and Other - Internal-Use Software, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement , which provides guidance on fees paid by an entity in a cloud computing arrangement and whether an arrangement includes a license to the underlying software. This standard is effective for fiscal periods beginning after December 15, 2015. Early adoption is permitted. We are currently assessing the impact this standard will have on our consolidated financial statements and disclosures. In April 2015, the FASB issued Accounting Standard Update (ASU) 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. This standard is effective for fiscal periods beginning after December 15, 2015. Early adoption is permitted. We do not believe this standard will have a significant impact on our consolidated financial statements or disclosures. In January 2015, the FASB issued ASU 2015-01, Income Statement - Extraordinary and Unusual Items, which removes the concept of extraordinary items, thereby eliminating the need for companies to assess transactions for extraordinary treatment. The standard retained the presentation and disclosure requirements for items that are unusual in nature and/or infrequent in occurrence. The standard is effective for fiscal periods beginning after December 15, 2015. Early adoption is permitted. We do not believe this standard will have a significant impact on our consolidated financial statements or disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The standard requires companies to recognize revenue for the transfer of goods and services to customers in amounts that reflect the consideration the company expects to receive in exchange for those goods and services. The standard will also result in enhanced disclosures about revenue. In July 2015, the FASB approved a one-year deferral of the effective date. This standard is now effective for fiscal periods beginning after December 15, 2017. The standard can be adopted either retrospectively or as a cumulative-effect adjustment. Companies are permitted to adopt the standard as early as the original public entity effective date (fiscal periods beginning after December 15, 2016). Early adoption prior to that date is prohibited. We are currently assessing the impact this standard will have on our consolidated financial statements and disclosures. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated Statements | Revenue and EBIT by business segment is presented below: Revenue Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 North America Mailing $ 356,791 $ 371,194 $ 718,665 $ 752,221 International Mailing 110,610 153,260 226,783 306,528 Small & Medium Business Solutions 467,401 524,454 945,448 1,058,749 Production Mail 97,731 111,756 197,234 216,972 Presort Services 113,922 111,281 235,453 227,772 Enterprise Business Solutions 211,653 223,037 432,687 444,744 Software Solutions 99,041 108,820 185,278 200,194 Global Ecommerce 77,966 68,653 153,352 132,529 Digital Commerce Solutions 177,007 177,473 338,630 332,723 Other 24,830 33,486 54,807 59,731 Total revenue $ 880,891 $ 958,450 $ 1,771,572 $ 1,895,947 |
Reconciliation of EBIT from Segments to Consolidated | EBIT Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 North America Mailing $ 159,392 $ 156,781 $ 323,057 $ 317,119 International Mailing 14,122 26,449 25,846 51,268 Small & Medium Business Solutions 173,514 183,230 348,903 368,387 Production Mail 10,028 10,558 19,060 18,295 Presort Services 23,544 22,412 51,038 46,308 Enterprise Business Solutions 33,572 32,970 70,098 64,603 Software Solutions 16,158 9,877 20,291 11,699 Global Ecommerce 3,056 3,749 11,202 9,776 Digital Commerce Solutions 19,214 13,626 31,493 21,475 Other 5,611 4,303 10,569 5,985 Total EBIT 231,911 234,129 461,063 460,450 Reconciling items: Interest, net (38,839 ) (41,895 ) (81,673 ) (85,612 ) Unallocated corporate expenses (51,921 ) (45,458 ) (102,724 ) (102,062 ) Restructuring charges and asset impairments, net (14,350 ) (8,299 ) (14,269 ) (18,140 ) Acquisition-related compensation expense (10,483 ) — (10,483 ) — Other income (expense), net 93,135 — 93,135 (61,657 ) Income from continuing operations before income taxes $ 209,453 $ 138,477 $ 345,049 $ 192,979 |
Business Combinations and Div28
Business Combinations and Divestiture (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The preliminary allocation of the purchase price to the fair values of assets acquired and liabilities assumed was as follows: Accounts receivable $ 16,964 Fixed assets 7,293 Goodwill 285,727 Intangible assets 156,800 Accounts payable and other current liabilities (35,117 ) Deferred taxes, net (46,819 ) Other assets and liabilities, net 1,412 $ 386,260 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Intangible assets acquired consist of the following: Value Amortization period Customer Relationships $ 135,500 10 years Developed Technology 12,600 5 years Trade Names 8,700 5 years $ 156,800 |
Discontinued Operations and A29
Discontinued Operations and Assets Held for Sale (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations, Income Statement and Balance Sheet Items | The table below shows selected financial information for discontinued operations for three and six months ended June 30, 2014 : Three Months Ended June 30, 2014 PBMS IMS Nordic furniture business DIS Total Revenue $ — $ — $ — $ 3,567 $ 3,567 Income from operations before taxes $ 580 $ — $ — $ 1,018 $ 1,598 Gain on sale — 831 — 25,198 26,029 Income before taxes 580 831 — 26,216 27,627 Tax provision 217 321 — 20,372 20,910 Income from discontinued operations $ 363 $ 510 $ — $ 5,844 $ 6,717 Six Months Ended June 30, 2014 PBMS IMS Nordic furniture business DIS Total Revenue $ — $ — $ — $ 19,858 $ 19,858 Income before taxes $ 334 $ 308 $ 345 $ 3,429 $ 4,416 Gain on sale 130 1,994 — 25,198 27,322 Income before taxes 464 2,302 345 28,627 31,738 Tax provision 196 850 97 21,077 22,220 Income from discontinued operations $ 268 $ 1,452 $ 248 $ 7,550 $ 9,518 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | The calculations of basic and diluted earnings per share are presented below: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Net income from continuing operations $ 152,509 $ 87,548 $ 232,964 $ 129,420 (Loss) income from discontinued operations, net of tax (739 ) 6,717 (582 ) 9,518 Net income - Pitney Bowes Inc. (numerator for diluted EPS) 151,770 94,265 232,382 138,938 Less: Preference stock dividend 10 11 21 22 Income attributable to common stockholders (numerator for basic EPS) $ 151,760 $ 94,254 $ 232,361 $ 138,916 Denominator: Weighted-average shares used in basic EPS 201,712 202,662 201,504 202,480 Effect of dilutive shares: Conversion of Preferred stock and Preference stock 324 345 329 349 Employee stock plans 804 1,463 801 1,272 Weighted-average shares used in diluted EPS 202,840 204,470 202,634 204,101 Basic earnings per share (1): Continuing operations $ 0.76 $ 0.43 $ 1.16 $ 0.64 Discontinued operations — 0.03 — 0.05 Net income $ 0.75 $ 0.47 $ 1.15 $ 0.69 Diluted earnings per share (1): Continuing operations $ 0.75 $ 0.43 $ 1.15 $ 0.63 Discontinued operations — 0.03 — 0.05 Net income $ 0.75 $ 0.46 $ 1.15 $ 0.68 Anti-dilutive shares not used in calculating diluted weighted-average shares: 6,395 6,062 7,313 7,943 (1) The sum of earnings per share amounts may not equal the totals due to rounding. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory Components | Inventories at June 30, 2015 and December 31, 2014 consisted of the following: June 30, December 31, Raw materials and work in process $ 36,804 $ 37,175 Supplies and service parts 45,179 33,760 Finished products 32,445 26,992 Inventory at FIFO cost 114,428 97,927 Excess of FIFO cost over LIFO cost (13,356 ) (13,100 ) Total inventory, net $ 101,072 $ 84,827 |
Finance Assets (Tables)
Finance Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Receivables [Abstract] | |
Financing Receivables | Finance receivables at June 30, 2015 and December 31, 2014 consisted of the following: June 30, 2015 December 31, 2014 North America International Total North America International Total Sales-type lease receivables Gross finance receivables $ 1,236,030 $ 329,171 $ 1,565,201 $ 1,286,624 $ 366,669 $ 1,653,293 Unguaranteed residual values 101,622 16,825 118,447 105,205 18,291 123,496 Unearned income (262,081 ) (74,024 ) (336,105 ) (270,196 ) (83,110 ) (353,306 ) Allowance for credit losses (7,973 ) (3,721 ) (11,694 ) (10,281 ) (5,129 ) (15,410 ) Net investment in sales-type lease receivables 1,067,598 268,251 1,335,849 1,111,352 296,721 1,408,073 Loan receivables Loan receivables 359,033 50,888 409,921 376,987 47,665 424,652 Allowance for credit losses (10,193 ) (1,719 ) (11,912 ) (10,912 ) (1,788 ) (12,700 ) Net investment in loan receivables 348,840 49,169 398,009 366,075 45,877 411,952 Net investment in finance receivables $ 1,416,438 $ 317,420 $ 1,733,858 $ 1,477,427 $ 342,598 $ 1,820,025 |
Allowance for Credit Losses on Financing Receivables | Activity in the allowance for credit losses for the six months ended June 30, 2015 and 2014 was as follows: Sales-type Lease Receivables Loan Receivables North America International North America International Total Balance at January 1, 2015 $ 10,281 $ 5,129 $ 10,912 $ 1,788 $ 28,110 Amounts charged to expense 112 (447 ) 3,913 554 4,132 Write-offs and other (2,420 ) (961 ) (4,632 ) (623 ) (8,636 ) Balance at June 30, 2015 $ 7,973 $ 3,721 $ 10,193 $ 1,719 $ 23,606 Sales-type Lease Receivables Loan Receivables North America International North America International Total Balance at January 1, 2014 $ 14,165 $ 9,703 $ 11,165 $ 1,916 $ 36,949 Amounts charged to expense 2,360 (350 ) 4,742 1,034 7,786 Write-offs and other (3,382 ) (1,749 ) (5,132 ) (801 ) (11,064 ) Balance at June 30, 2014 $ 13,143 $ 7,604 $ 10,775 $ 2,149 $ 33,671 |
Past Due Financing Receivables | The aging of gross finance receivables at June 30, 2015 and December 31, 2014 was as follows: June 30, 2015 Sales-type Lease Receivables Loan Receivables North America International North America International Total 1 - 30 days $ 1,171,926 $ 310,382 $ 344,290 $ 48,546 $ 1,875,144 31 - 60 days 22,927 5,785 8,274 1,598 38,584 61 - 90 days 18,667 3,575 2,790 340 25,372 > 90 days 22,510 9,429 3,679 404 36,022 Total $ 1,236,030 $ 329,171 $ 359,033 $ 50,888 $ 1,975,122 Past due amounts > 90 days Still accruing interest $ 6,658 $ 2,819 $ — $ — $ 9,477 Not accruing interest 15,852 6,610 3,679 404 26,545 Total $ 22,510 $ 9,429 $ 3,679 $ 404 $ 36,022 December 31, 2014 Sales-type Lease Receivables Loan Receivables North America International North America International Total 1 - 30 days $ 1,217,623 $ 347,236 $ 359,672 $ 45,678 $ 1,970,209 31 - 60 days 23,242 6,207 9,245 1,201 39,895 61 - 90 days 24,198 4,494 3,498 413 32,603 > 90 days 21,561 8,732 4,572 373 35,238 Total $ 1,286,624 $ 366,669 $ 376,987 $ 47,665 $ 2,077,945 Past due amounts > 90 days Still accruing interest $ 5,931 $ 2,517 $ — $ — $ 8,448 Not accruing interest 15,630 6,215 4,572 373 26,790 Total $ 21,561 $ 8,732 $ 4,572 $ 373 $ 35,238 |
Financing Receivable Credit Quality Indicators | June 30, December 31, Sales-type lease receivables Low $ 923,475 $ 936,979 Medium 215,444 230,799 High 43,248 45,202 Not Scored 53,863 73,644 Total $ 1,236,030 $ 1,286,624 Loan receivables Low $ 248,331 $ 259,436 Medium 89,725 96,243 High 10,287 10,913 Not Scored 10,690 10,395 Total $ 359,033 $ 376,987 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure | Intangible assets consisted of the following: June 30, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 453,879 $ (257,095 ) $ 196,784 $ 337,438 $ (263,121 ) $ 74,317 Supplier relationships — — — 29,000 (27,913 ) 1,087 Software & technology 168,695 (151,291 ) 17,404 160,825 (154,610 ) 6,215 Trademarks & other 35,959 (26,827 ) 9,132 33,079 (32,525 ) 554 Total intangible assets $ 658,533 $ (435,213 ) $ 223,320 $ 560,342 $ (478,169 ) $ 82,173 |
Amortization Expense In Future Periods | Future amortization expense for intangible assets as of June 30, 2015 was as follows: Remaining for year ending December 31, 2015 $ 22,328 Year ending December 31, 2016 39,995 Year ending December 31, 2017 29,077 Year ending December 31, 2018 26,470 Year ending December 31, 2019 23,415 Thereafter 82,035 Total $ 223,320 |
Schedule of Goodwill | The changes in the carrying value of goodwill for the six months ended June 30, 2015 were as follows: December 31, 2014 Acquisition Divestiture Foreign currency translation June 30, North America Mailing $ 309,448 $ — $ — $ (9,949 ) $ 299,499 International Mailing 162,146 — — (8,662 ) 153,484 Small & Medium Business Solutions 471,594 — — (18,611 ) 452,983 Production Mail 110,837 — — (2,786 ) 108,051 Presort Services 195,140 — — — 195,140 Enterprise Business Solutions 305,977 — — (2,786 ) 303,191 Software Solutions 677,008 5,792 — (661 ) 682,139 Global Ecommerce 23,910 285,727 — — 309,637 Digital Commerce Solutions 700,918 291,519 — (661 ) 991,776 Other 194,232 — (194,232 ) — — Total goodwill $ 1,672,721 $ 291,519 $ (194,232 ) $ (22,058 ) $ 1,747,950 |
Fair Value Measurements and D34
Fair Value Measurements and Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables show, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis at June 30, 2015 and December 31, 2014 . Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect its placement within the fair value hierarchy. June 30, 2015 Level 1 Level 2 Level 3 Total Assets: Investment securities Money market funds / commercial paper $ 135,822 $ 228,787 $ — $ 364,609 Equity securities — 25,434 — 25,434 Commingled fixed income securities — 22,709 — 22,709 U.S. Government, federal agencies and municipalities 112,508 19,206 — 131,714 Corporate notes and bonds — 65,840 — 65,840 Mortgage-backed / asset-backed securities — 166,326 — 166,326 Derivatives Foreign exchange contracts — 838 — 838 Total assets $ 248,330 $ 529,140 $ — $ 777,470 Liabilities: Derivatives Foreign exchange contracts $ — $ (4,530 ) $ — $ (4,530 ) Total liabilities $ — $ (4,530 ) $ — $ (4,530 ) December 31, 2014 Level 1 Level 2 Level 3 Total Assets: Investment securities Money market funds / commercial paper $ 505,643 $ 193,986 $ — $ 699,629 Equity securities — 27,409 — 27,409 Commingled fixed income securities — 24,077 — 24,077 U.S. Government, federal agencies and municipalities 113,974 24,006 — 137,980 Corporate notes and bonds — 67,448 — 67,448 Mortgage-backed / asset-backed securities — 156,614 — 156,614 Derivatives Foreign exchange contracts — 1,386 — 1,386 Total assets $ 619,617 $ 494,926 $ — $ 1,114,543 Liabilities: Derivatives Foreign exchange contracts $ — $ (2,988 ) $ — $ (2,988 ) Total liabilities $ — $ (2,988 ) $ — $ (2,988 ) |
Schedule of Available-for-sale Securities Reconciliation | Available-for-sale securities at June 30, 2015 and December 31, 2014 consisted of the following: June 30, 2015 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Government, federal agencies and municipalities $ 131,031 $ 1,927 $ (1,244 ) $ 131,714 Corporate notes and bonds 65,396 1,112 (668 ) 65,840 Mortgage-backed / asset-backed securities 165,095 2,360 (1,129 ) 166,326 Total $ 361,522 $ 5,399 $ (3,041 ) $ 363,880 December 31, 2014 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Government, federal agencies and municipalities $ 135,839 $ 2,905 $ (764 ) $ 137,980 Corporate notes and bonds 66,170 1,569 (291 ) 67,448 Mortgage-backed / asset-backed securities 155,330 2,362 (1,078 ) 156,614 Total $ 357,339 $ 6,836 $ (2,133 ) $ 362,042 |
Available-for-sale Securities | Scheduled maturities of available-for-sale securities at June 30, 2015 were as follows: Amortized cost Estimated fair value Within 1 year $ 64,668 $ 64,716 After 1 year through 5 years 63,180 64,229 After 5 years through 10 years 57,909 58,599 After 10 years 175,765 176,336 Total $ 361,522 $ 363,880 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of derivative instruments at June 30, 2015 and December 31, 2014 was as follows: Designation of Derivatives Balance Sheet Location June 30, December 31, Derivatives designated as hedging instruments Foreign exchange contracts Other current assets and prepayments $ 518 $ 762 Accounts payable and accrued liabilities: (415 ) — Derivatives not designated as hedging instruments Foreign exchange contracts Other current assets and prepayments 320 624 Accounts payable and accrued liabilities: (4,115 ) (2,988 ) Total derivative assets $ 838 $ 1,386 Total derivative liabilities (4,530 ) (2,988 ) Total net derivative liabilities $ (3,692 ) $ (1,602 ) |
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following represents the results of cash flow hedging relationships for the three and six months ended June 30, 2015 and 2014 : Three 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 2015 2014 2015 2014 Foreign exchange contracts $ (418 ) $ 17 Revenue $ 432 $ (346 ) Cost of sales 190 153 $ 622 $ (193 ) 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 2015 2014 2015 2014 Foreign exchange contracts $ 755 $ (52 ) Revenue $ 828 $ (580 ) Cost of sales 585 352 $ 1,413 $ (228 ) |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following represents the results of our non-designated derivative instruments for the three and six months ended June 30, 2015 and 2014 : Three Months Ended June 30, Derivative Gain (Loss) Recognized in Earnings Derivatives Instrument Location of Derivative Gain (Loss) 2015 2014 Foreign exchange contracts Selling, general and administrative expense $ (4,131 ) $ (2,622 ) Six Months Ended June 30, Derivative Gain (Loss) Recognized in Earnings Derivatives Instrument Location of Derivative Gain (Loss) 2015 2014 Foreign exchange contracts Selling, general and administrative expense $ (3,577 ) $ (3,304 ) |
Fair Value, by Balance Sheet Grouping | The carrying value and estimated fair value of our debt at June 30, 2015 and December 31, 2014 were as follows: June 30, 2015 December 31, 2014 Carrying value $ 2,994,190 $ 3,252,006 Fair value $ 3,140,259 $ 3,440,383 |
Restructuring Charges and Ass35
Restructuring Charges and Asset Impairment (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The tables below show the activity in restructuring reserves for our Operational Excellence plan, implemented in 2014, and our other plans for the six months ended June 30, 2015 and 2014 and includes amounts for both continuing operations and discontinued operations. Operational Excellence Severance and benefits costs Other exit costs Total Balance at January 1, 2015 $ 78,105 $ 8,154 $ 86,259 Expenses, net 9,984 (198 ) 9,786 Cash payments (26,447 ) (2,389 ) (28,836 ) Balance at June 30, 2015 $ 61,642 $ 5,567 $ 67,209 Balance at January 1, 2014 $ 42,427 $ 7,622 $ 50,049 Expenses, net (1) 17,162 2,852 20,014 Cash payments (26,732 ) (4,699 ) (31,431 ) Balance at June 30, 2014 $ 32,857 $ 5,775 $ 38,632 (1) See Note 12 for additional restructuring charge. Other Plans Severance and benefits costs Other exit costs Total Balance at January 1, 2015 $ 3,731 $ 189 $ 3,920 Expenses, net (726 ) — (726 ) Cash payments (1,824 ) (115 ) (1,939 ) Balance at June 30, 2015 $ 1,181 $ 74 $ 1,255 Balance at January 1, 2014 $ 16,131 $ 392 $ 16,523 Expenses, net (5,245 ) — (5,245 ) Cash payments (2,026 ) (73 ) (2,099 ) Balance at June 30, 2014 $ 8,860 $ 319 $ 9,179 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | There were no outstanding commercial paper borrowings at December 31, 2014 . Long-term Debt Interest rate June 30, 2015 December 31, 2014 Notes due March 2015 5.0% $ — $ 274,879 Notes due January 2016 4.75% 370,914 370,914 Notes due September 2017 5.75% 385,109 385,109 Notes due March 2018 5.6% 250,000 250,000 Notes due May 2018 4.75% 350,000 350,000 Notes due March 2019 6.25% 300,000 300,000 Notes due November 2022 5.25% 110,000 110,000 Notes due March 2024 4.625% 500,000 500,000 Notes due January 2037 5.25% 115,041 115,041 Notes due March 2043 6.7% 425,000 425,000 Term loans Variable 50,000 130,000 Other debt 16,919 16,000 Principal amount 2,872,983 3,226,943 Less: unamortized discount 5,921 6,653 Plus: unamortized interest rate swap proceeds 27,128 31,716 Total debt 2,894,190 3,252,006 Less: current portion long-term debt 421,103 324,879 Long-term debt $ 2,473,087 $ 2,927,127 |
Pensions and Other Benefit Pr37
Pensions and Other Benefit Programs (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | The components of net periodic benefit cost (income) were as follows: Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans United States Foreign Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2015 2014 2015 2014 2015 2014 Service cost $ 38 $ 2,023 $ 555 $ 913 $ 640 $ 697 Interest cost 18,305 19,416 6,122 7,276 2,151 2,480 Expected return on plan assets (25,958 ) (25,956 ) (8,935 ) (9,980 ) — — Amortization of transition credit — — (3 ) (3 ) — — Amortization of prior service cost (credit) 2 2 (16 ) (15 ) 74 40 Amortization of net actuarial loss 7,007 6,264 1,509 2,103 1,562 1,502 Settlement / curtailment (1) — 821 — — — — Net periodic benefit (income) cost $ (606 ) $ 2,570 $ (768 ) $ 294 $ 4,427 $ 4,719 Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans United States Foreign Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 2015 2014 Service cost $ 76 $ 4,438 $ 1,120 $ 1,821 $ 1,319 $ 1,425 Interest cost 37,164 38,832 12,185 14,445 4,526 4,942 Expected return on plan assets (52,002 ) (51,912 ) (17,774 ) (19,805 ) — — Amortization of transition credit — — (5 ) (5 ) — — Amortization of prior service cost (credit) 4 4 (33 ) (30 ) 148 80 Amortization of net actuarial loss 14,655 12,424 2,989 4,179 3,953 3,024 Settlement / curtailment (1) — 3,371 — — — — Net periodic benefit (income) cost $ (103 ) $ 7,157 $ (1,518 ) $ 605 $ 9,946 $ 9,471 (1) Included in restructuring charges and asset impairments, net in the Condensed Consolidated Statements of Income. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders Equity | Changes in stockholders’ equity for the six months ended June 30, 2015 and 2014 were as follows: Preferred stock Preference stock Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock Total equity Balance at January 1, 2015 $ 1 $ 548 $ 323,338 $ 178,852 $ 4,897,708 $ (846,156 ) $ (4,477,032 ) $ 77,259 Net income — — — — 232,382 — — 232,382 Other comprehensive loss — — — — — (46,350 ) — (46,350 ) Dividends paid - Common stock — — — — (75,627 ) — — (75,627 ) Dividends paid - Preference stock — — — — (21 ) — — (21 ) Issuance of common stock — — — (34,005 ) — — 26,659 (7,346 ) Conversion to common stock (26 ) — (543 ) — — 569 — Stock-based compensation expense — — — 11,067 — — — 11,067 Balance at June 30, 2015 $ 1 $ 522 $ 323,338 $ 155,371 $ 5,054,442 $ (892,506 ) $ (4,449,804 ) $ 191,364 Preferred stock Preference stock Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock Total equity Balance at January 1, 2014 $ 4 $ 591 $ 323,338 $ 196,977 $ 4,715,564 $ (574,556 ) $ (4,456,742 ) $ 205,176 Net income — — — — 138,938 — — 138,938 Other comprehensive loss — — — — — 15,205 — 15,205 Dividends paid - Common stock — — — — (75,974 ) — — (75,974 ) Dividends paid - Preference stock — — — — (22 ) — — (22 ) Issuance of common stock — — — (24,212 ) — — 22,189 (2,023 ) Conversion to common stock (3 ) (28 ) — (656 ) — — 687 — Stock-based compensation expense — — — 7,976 — — — 7,976 Purchase of subsidiary shares from noncontrolling interest — — — (7,520 ) — — — (7,520 ) Balance at June 30, 2014 $ 1 $ 563 $ 323,338 $ 172,565 $ 4,778,506 $ (559,351 ) $ (4,433,866 ) $ 281,756 |
Accumulated Other Comprehensi39
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Reclassifications out of accumulated other comprehensive loss for the three and six months ended June 30, 2015 and 2014 were as follows: Amount Reclassified from AOCL (a) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Gains (losses) on cash flow hedges Revenue $ (432 ) $ (346 ) $ (828 ) $ (580 ) Cost of sales (190 ) 153 (585 ) 352 Interest expense (507 ) (507 ) (1,014 ) (1,014 ) Total before tax (1,129 ) (700 ) (2,427 ) (1,242 ) Tax benefit 436 269 938 479 Net of tax $ (693 ) $ (431 ) $ (1,489 ) $ (763 ) Losses on available for sale securities Unrealized losses $ (18 ) $ (505 ) $ (42 ) $ (852 ) Tax benefit 7 186 16 314 Net of tax $ (11 ) $ (319 ) $ (26 ) $ (538 ) Pension and Postretirement Benefit Plans (b) Transition credit $ 3 $ 3 $ 5 $ 5 Prior service costs (61 ) (27 ) (120 ) (54 ) Actuarial losses (10,056 ) (9,869 ) (21,595 ) (19,627 ) Total before tax (10,114 ) (9,893 ) (21,710 ) (19,676 ) Tax benefit 3,614 3,613 7,781 7,254 Net of tax $ (6,500 ) $ (6,280 ) $ (13,929 ) $ (12,422 ) (a) Amounts in parentheses indicate debits (reductions) to income. (b) These items are included in the computation of net periodic costs of defined benefit pension plans and nonpension postretirement benefit plans (see Note 12 for additional details). |
Schedule of Comprehensive Income Loss | Changes in accumulated other comprehensive loss for the six months ended June 30, 2015 and 2014 were as follows: (Gains) losses on cash flow hedges (Gains) losses on available for sale securities Pension and postretirement benefit plans Foreign currency items Total Balance at January 1, 2015 $ (4,689 ) $ 2,966 $ (786,079 ) $ (58,354 ) $ (846,156 ) Other comprehensive loss before reclassifications (a) (1,273 ) (1,499 ) — (59,022 ) (61,794 ) Amounts reclassified from accumulated other comprehensive loss (a), (b) 1,489 26 13,929 — 15,444 Net current period other comprehensive income (loss) 216 (1,473 ) 13,929 (59,022 ) (46,350 ) Balance at June 30, 2015 $ (4,473 ) $ 1,493 $ (772,150 ) $ (117,376 ) $ (892,506 ) (Gains) losses on cash flow hedges (Gains) losses on available for sale securities Pension and postretirement benefit plans Foreign currency items Total Balance at January 1, 2014 $ (6,380 ) $ (1,769 ) $ (601,421 ) $ 35,014 $ (574,556 ) Other comprehensive income (loss) before reclassifications (a) 27 3,657 — (2,202 ) 1,482 Amounts reclassified from accumulated other comprehensive loss (a), (b) 763 538 12,422 — 13,723 Net current period other comprehensive income (loss) 790 4,195 12,422 (2,202 ) 15,205 Balance at June 30, 2014 $ (5,590 ) $ 2,426 $ (588,999 ) $ 32,812 $ (559,351 ) (a) Amounts are net of tax. Amounts in parentheses indicate debits to AOCL. (b) See table above for additional details of these reclassifications. |
Description of Business and B40
Description of Business and Basis of Presentation (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Increase in accounts receivable | $ (32,784) | $ (66,778) | |
Increase in accounts payable and accrued liabilities | (130,100) | (88,567) | |
Cash used for purchases of available-for-sale securities | 106,431 | 613,429 | |
Cash provided by proceeds from sales/maturities of available-for-sale securities | $ 111,993 | 592,799 | |
Restatement Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Increase in accounts receivable | $ 23,000 | ||
Increase in accounts payable and accrued liabilities | 14,000 | ||
Increase in other noncurrent liabilities | $ 9,000 | ||
Cash used for purchases of available-for-sale securities | 422,000 | ||
Cash provided by proceeds from sales/maturities of available-for-sale securities | $ 422,000 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 3 | |||
Segment reporting information profit (loss) | ||||
Revenues | $ 880,891 | $ 958,450 | $ 1,771,572 | $ 1,895,947 |
EBIT | 231,911 | 234,129 | 461,063 | 460,450 |
Reconciling items: | ||||
Interest, net | (38,839) | (41,895) | (81,673) | (85,612) |
Unallocated corporate expenses | (51,921) | (45,458) | (102,724) | (102,062) |
Restructuring charges and asset impairments, net | (14,350) | (8,299) | (14,269) | (18,140) |
Acquisition-related compensation expense | (10,483) | 0 | (10,483) | 0 |
Other income (expense), net | 93,135 | 0 | 93,135 | (61,657) |
Income from continuing operations before income taxes | 209,453 | 138,477 | 345,049 | 192,979 |
Small & Medium Business Solutions | ||||
Segment reporting information profit (loss) | ||||
Revenues | 467,401 | 524,454 | 945,448 | 1,058,749 |
EBIT | 173,514 | 183,230 | 348,903 | 368,387 |
North America Mailing | ||||
Segment reporting information profit (loss) | ||||
Revenues | 356,791 | 371,194 | 718,665 | 752,221 |
EBIT | 159,392 | 156,781 | 323,057 | 317,119 |
International Mailing | ||||
Segment reporting information profit (loss) | ||||
Revenues | 110,610 | 153,260 | 226,783 | 306,528 |
EBIT | 14,122 | 26,449 | 25,846 | 51,268 |
Enterprise Business Solutions | ||||
Segment reporting information profit (loss) | ||||
Revenues | 211,653 | 223,037 | 432,687 | 444,744 |
EBIT | 33,572 | 32,970 | 70,098 | 64,603 |
Production Mail | ||||
Segment reporting information profit (loss) | ||||
Revenues | 97,731 | 111,756 | 197,234 | 216,972 |
EBIT | 10,028 | 10,558 | 19,060 | 18,295 |
Presort Services | ||||
Segment reporting information profit (loss) | ||||
Revenues | 113,922 | 111,281 | 235,453 | 227,772 |
EBIT | 23,544 | 22,412 | 51,038 | 46,308 |
Digital Commerce Solutions | ||||
Segment reporting information profit (loss) | ||||
Revenues | 177,007 | 177,473 | 338,630 | 332,723 |
EBIT | 19,214 | 13,626 | 31,493 | 21,475 |
Software Solutions | ||||
Segment reporting information profit (loss) | ||||
Revenues | 99,041 | 108,820 | 185,278 | 200,194 |
EBIT | 16,158 | 9,877 | 20,291 | 11,699 |
Global Ecommerce | ||||
Segment reporting information profit (loss) | ||||
Revenues | 77,966 | 68,653 | 153,352 | 132,529 |
EBIT | 3,056 | 3,749 | 11,202 | 9,776 |
Other | ||||
Segment reporting information profit (loss) | ||||
Revenues | 24,830 | 33,486 | 54,807 | 59,731 |
EBIT | $ 5,611 | $ 4,303 | $ 10,569 | $ 5,985 |
Business Combinations and Div42
Business Combinations and Divestiture (Narrative) (Details) - USD ($) $ in Thousands | Jun. 10, 2015 | May. 29, 2015 | May. 01, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||||||
Purchase price | $ 391,531 | $ 0 | ||||||
Goodwill | $ 1,747,950 | 1,747,950 | $ 1,672,721 | |||||
Sale price of business | 289,639 | 101,454 | ||||||
Gain on sale of business | 107,548 | 26,152 | ||||||
Imagitas | ||||||||
Business Acquisition [Line Items] | ||||||||
Sale price of business | $ 291,000 | |||||||
Gain on sale of business | $ 109,000 | |||||||
Borderfree | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of business acquired | 100.00% | |||||||
Purchase price | $ 386,000 | |||||||
Cash acquired | 88,000 | |||||||
Revenues | 7,000 | 7,000 | ||||||
Pro forma revenues | $ 22,000 | $ 31,000 | $ 47,000 | $ 57,000 | ||||
Goodwill | 285,727 | |||||||
Intangible assets | 156,800 | |||||||
Borderfree | Software & technology | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible assets | $ 12,600 | |||||||
Amortization period | 5 years | |||||||
Borderfree | Selling, general and administrative expense | ||||||||
Business Acquisition [Line Items] | ||||||||
Accelerated stock-based compensation expense | $ 10,000 | |||||||
Borderfree | Other (Income) Expense, Net | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition-related costs | $ 8,000 | |||||||
Real Time Content | ||||||||
Business Acquisition [Line Items] | ||||||||
Payment to acquire business | $ 6,000 |
Business Combinations and Div43
Business Combinations and Divestiture (Preliminary Allocation of Purchase Price) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 10, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,747,950 | $ 1,672,721 | |
Borderfree | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 16,964 | ||
Fixed assets | 7,293 | ||
Goodwill | 285,727 | ||
Intangible assets | 156,800 | ||
Accounts payable and other current liabilities | (35,117) | ||
Deferred taxes, net | (46,819) | ||
Other assets and liabilities, net | 1,412 | ||
Net assets acquired | $ 386,260 |
Business Combinations and Div44
Business Combinations and Divestiture (Intangible Assets) (Details) - Jun. 10, 2015 - Borderfree - USD ($) $ in Thousands | Total |
Business Acquisition [Line Items] | |
Value | $ 156,800 |
Customer relationships | |
Business Acquisition [Line Items] | |
Value | $ 135,500 |
Amortization period | 10 years |
Developed Technology | |
Business Acquisition [Line Items] | |
Value | $ 12,600 |
Amortization period | 5 years |
Trade Names | |
Business Acquisition [Line Items] | |
Value | $ 8,700 |
Amortization period | 5 years |
Discontinued Operations and A45
Discontinued Operations and Assets Held for Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Revenue | $ 3,567 | $ 19,858 | ||
Income from operations before taxes | 1,598 | 4,416 | ||
Gain on sale | 26,029 | 27,322 | ||
Income before taxes | 27,627 | 31,738 | ||
Tax provision | 20,910 | 22,220 | ||
Income from discontinued operations | $ (739) | 6,717 | $ (582) | 9,518 |
PBMS | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Revenue | 0 | 0 | ||
Income from operations before taxes | 580 | 334 | ||
Gain on sale | 0 | 130 | ||
Income before taxes | 580 | 464 | ||
Tax provision | 217 | 196 | ||
Income from discontinued operations | 363 | 268 | ||
IMS | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Revenue | 0 | 0 | ||
Income from operations before taxes | 0 | 308 | ||
Gain on sale | 831 | 1,994 | ||
Income before taxes | 831 | 2,302 | ||
Tax provision | 321 | 850 | ||
Income from discontinued operations | 510 | 1,452 | ||
Nordic furniture business | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Revenue | 0 | 0 | ||
Income from operations before taxes | 0 | 345 | ||
Gain on sale | 0 | 0 | ||
Income before taxes | 0 | 345 | ||
Tax provision | 0 | 97 | ||
Income from discontinued operations | 0 | 248 | ||
DIS | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Revenue | 3,567 | 19,858 | ||
Income from operations before taxes | 1,018 | 3,429 | ||
Gain on sale | 25,198 | 25,198 | ||
Income before taxes | 26,216 | 28,627 | ||
Tax provision | 20,372 | 21,077 | ||
Income from discontinued operations | $ 5,844 | $ 7,550 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Numerator: | |||||
Net income from continuing operations | $ 152,509 | $ 87,548 | $ 232,964 | $ 129,420 | |
Income from discontinued operations | (739) | 6,717 | (582) | 9,518 | |
Net income - Pitney Bowes Inc. (numerator for diluted EPS) | 151,770 | 94,265 | 232,382 | 138,938 | |
Less: Preference stock dividend | 10 | 11 | 21 | 22 | |
Income attributable to common stockholders (numerator for basic EPS) | $ 151,760 | $ 94,254 | $ 232,361 | $ 138,916 | |
Weighted-average shares used in basic EPS | 201,712 | 202,662 | 201,504 | 202,480 | |
Effect of dilutive shares: | |||||
Conversion of Preferred stock and Preference stock | 324 | 345 | 329 | 349 | |
Employee stock plans | 804 | 1,463 | 801 | 1,272 | |
Weighted-average shares used in diluted EPS | 202,840 | 204,470 | 202,634 | 204,101 | |
Basic earnings per share (1): | |||||
Continuing operations (in dollars per share) | [1],[2] | $ 0.76 | $ 0.43 | $ 1.16 | $ 0.64 |
Discontinued operations (in dollars per share) | [1],[2] | 0 | 0.03 | 0 | 0.05 |
Net income attributable to Pitney Bowes Inc. (in dollars per share) | [1],[2] | 0.75 | 0.47 | 1.15 | 0.69 |
Diluted earnings per share (1): | |||||
Continuing operations (in dollars per share) | [1],[2] | 0.75 | 0.43 | 1.15 | 0.63 |
Discontinued operations (in dollars per share) | [1],[2] | 0 | 0.03 | 0 | 0.05 |
Net income attributable to Pitney Bowes Inc. (in dollars per share) | [1],[2] | $ 0.75 | $ 0.46 | $ 1.15 | $ 0.68 |
Anti-dilutive shares not used in calculating diluted weighted-average shares: | 6,395 | 6,062 | 7,313 | 7,943 | |
[1] | The sum of earnings per share amounts may not equal the totals due to rounding. | ||||
[2] | The sum of earnings per share amounts may not equal the totals due to rounding. |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials and work in process | $ 36,804 | $ 37,175 |
Supplies and service parts | 45,179 | 33,760 |
Finished products | 32,445 | 26,992 |
Inventory at FIFO cost | 114,428 | 97,927 |
Excess of FIFO cost over LIFO cost | (13,356) | (13,100) |
Total inventory, net | $ 101,072 | $ 84,827 |
Finance Assets (Details)
Finance Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Loans and Leases Receivable, Net Amount [Abstract] | |||
Net investment in finance receivables | $ 1,733,858 | $ 1,820,025 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Balance Beginning | 28,110 | $ 36,949 | |
Amounts charged to expense | 4,132 | 7,786 | |
Write-offs and other | (8,636) | (11,064) | |
Balance Closing | 23,606 | 33,671 | |
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
1 to 30 days | 1,875,144 | 1,970,209 | |
31 to 60 days | 38,584 | 39,895 | |
61 to 90 days | 25,372 | 32,603 | |
More than 90 days | 36,022 | 35,238 | |
Total | 1,975,122 | 2,077,945 | |
Still accruing interest | 9,477 | 8,448 | |
Not accruing interest | 26,545 | 26,790 | |
Total | $ 36,022 | 35,238 | |
Revenue recognition resume period | 60 days | ||
Low | |||
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
Approximate percentage of portfolio | 30.00% | ||
Medium | |||
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
Approximate percentage of portfolio | 40.00% | ||
High | |||
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
Approximate percentage of portfolio | 30.00% | ||
North America | |||
Loans and Leases Receivable, Net Amount [Abstract] | |||
Net investment in finance receivables | $ 1,416,438 | 1,477,427 | |
International | |||
Loans and Leases Receivable, Net Amount [Abstract] | |||
Net investment in finance receivables | 317,420 | 342,598 | |
Sales-type lease receivables | |||
Sales-type lease receivables | |||
Gross finance receivables | 1,565,201 | 1,653,293 | |
Unguaranteed residual values | 118,447 | 123,496 | |
Unearned income | (336,105) | (353,306) | |
Allowance for credit losses | (11,694) | (15,410) | |
Net investment in sales-type lease receivables | 1,335,849 | 1,408,073 | |
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
Sales-type Lease Receivables - Total | $ 1,565,201 | 1,653,293 | |
Revenue recognition discontinuation period | 120 days | ||
Sales-type lease receivables | North America | |||
Sales-type lease receivables | |||
Gross finance receivables | $ 1,236,030 | 1,286,624 | |
Unguaranteed residual values | 101,622 | 105,205 | |
Unearned income | (262,081) | (270,196) | |
Allowance for credit losses | (7,973) | (10,281) | |
Net investment in sales-type lease receivables | 1,067,598 | 1,111,352 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Balance Beginning | 10,281 | 14,165 | |
Amounts charged to expense | 112 | 2,360 | |
Write-offs and other | (2,420) | (3,382) | |
Balance Closing | 7,973 | 13,143 | |
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
1 to 30 days | 1,171,926 | 1,217,623 | |
31 to 60 days | 22,927 | 23,242 | |
61 to 90 days | 18,667 | 24,198 | |
More than 90 days | 22,510 | 21,561 | |
Sales-type Lease Receivables - Total | 1,236,030 | 1,286,624 | |
Still accruing interest | 6,658 | 5,931 | |
Not accruing interest | 15,852 | 15,630 | |
Total | 22,510 | 21,561 | |
Sales-type lease receivables | North America | Low | |||
Sales-type lease receivables | |||
Gross finance receivables | 923,475 | 936,979 | |
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
Sales-type Lease Receivables - Total | 923,475 | 936,979 | |
Sales-type lease receivables | North America | Medium | |||
Sales-type lease receivables | |||
Gross finance receivables | 215,444 | 230,799 | |
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
Sales-type Lease Receivables - Total | 215,444 | 230,799 | |
Sales-type lease receivables | North America | High | |||
Sales-type lease receivables | |||
Gross finance receivables | 43,248 | 45,202 | |
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
Sales-type Lease Receivables - Total | 43,248 | 45,202 | |
Sales-type lease receivables | North America | Not Scored | |||
Sales-type lease receivables | |||
Gross finance receivables | 53,863 | 73,644 | |
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
Sales-type Lease Receivables - Total | 53,863 | 73,644 | |
Sales-type lease receivables | International | |||
Sales-type lease receivables | |||
Gross finance receivables | 329,171 | 366,669 | |
Unguaranteed residual values | 16,825 | 18,291 | |
Unearned income | (74,024) | (83,110) | |
Allowance for credit losses | (3,721) | (5,129) | |
Net investment in sales-type lease receivables | 268,251 | 296,721 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Balance Beginning | 5,129 | 9,703 | |
Amounts charged to expense | (447) | (350) | |
Write-offs and other | (961) | (1,749) | |
Balance Closing | 3,721 | 7,604 | |
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
1 to 30 days | 310,382 | 347,236 | |
31 to 60 days | 5,785 | 6,207 | |
61 to 90 days | 3,575 | 4,494 | |
More than 90 days | 9,429 | 8,732 | |
Sales-type Lease Receivables - Total | 329,171 | 366,669 | |
Still accruing interest | 2,819 | 2,517 | |
Not accruing interest | 6,610 | 6,215 | |
Total | 9,429 | 8,732 | |
Loan receivables | |||
Loans and Leases Receivable, Net Amount [Abstract] | |||
Loan receivables | 409,921 | 424,652 | |
Allowance for credit losses | (11,912) | (12,700) | |
Net investment in loan receivables | $ 398,009 | 411,952 | |
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
Revenue recognition discontinuation period | 90 days | ||
Loan receivables | North America | |||
Loans and Leases Receivable, Net Amount [Abstract] | |||
Loan receivables | $ 359,033 | 376,987 | |
Allowance for credit losses | (10,193) | (10,912) | |
Net investment in loan receivables | 348,840 | 366,075 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Balance Beginning | 10,912 | 11,165 | |
Amounts charged to expense | 3,913 | 4,742 | |
Write-offs and other | (4,632) | (5,132) | |
Balance Closing | 10,193 | 10,775 | |
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
1 to 30 days | 344,290 | 359,672 | |
31 to 60 days | 8,274 | 9,245 | |
61 to 90 days | 2,790 | 3,498 | |
More than 90 days | 3,679 | 4,572 | |
Total | 376,987 | ||
Still accruing interest | 0 | 0 | |
Not accruing interest | 3,679 | 4,572 | |
Total | 3,679 | 4,572 | |
Loan receivables | North America | Low | |||
Loans and Leases Receivable, Net Amount [Abstract] | |||
Loan receivables | 248,331 | 259,436 | |
Loan receivables | North America | Medium | |||
Loans and Leases Receivable, Net Amount [Abstract] | |||
Loan receivables | 89,725 | 96,243 | |
Loan receivables | North America | High | |||
Loans and Leases Receivable, Net Amount [Abstract] | |||
Loan receivables | 10,287 | 10,913 | |
Loan receivables | North America | Not Scored | |||
Loans and Leases Receivable, Net Amount [Abstract] | |||
Loan receivables | 10,690 | 10,395 | |
Loan receivables | International | |||
Loans and Leases Receivable, Net Amount [Abstract] | |||
Loan receivables | 50,888 | 47,665 | |
Allowance for credit losses | (1,719) | (1,788) | |
Net investment in loan receivables | 49,169 | 45,877 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Balance Beginning | 1,788 | 1,916 | |
Amounts charged to expense | 554 | 1,034 | |
Write-offs and other | (623) | (801) | |
Balance Closing | 1,719 | $ 2,149 | |
Financing Receivable, Recorded Investment, Aging [Abstract] | |||
1 to 30 days | 48,546 | 45,678 | |
31 to 60 days | 1,598 | 1,201 | |
61 to 90 days | 340 | 413 | |
More than 90 days | 404 | 373 | |
Total | 47,665 | ||
Still accruing interest | 0 | 0 | |
Not accruing interest | 404 | 373 | |
Total | $ 404 | $ 373 |
Intangible Assets and Goodwil49
Intangible Assets and Goodwill (Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Finite lived intangible assets | |||||
Gross Carrying Amount | $ 658,533 | $ 658,533 | $ 560,342 | ||
Accumulated Amortization | (435,213) | (435,213) | (478,169) | ||
Net Carrying Amount | 223,320 | 223,320 | 82,173 | ||
Finite Lived Intangible Assets Amortization Expense | 8,000 | $ 6,000 | 16,000 | $ 12,000 | |
Customer relationships | |||||
Finite lived intangible assets | |||||
Gross Carrying Amount | 453,879 | 453,879 | 337,438 | ||
Accumulated Amortization | (257,095) | (257,095) | (263,121) | ||
Net Carrying Amount | 196,784 | 196,784 | 74,317 | ||
Supplier relationships | |||||
Finite lived intangible assets | |||||
Gross Carrying Amount | 0 | 0 | 29,000 | ||
Accumulated Amortization | 0 | 0 | (27,913) | ||
Net Carrying Amount | 0 | 0 | 1,087 | ||
Software & technology | |||||
Finite lived intangible assets | |||||
Gross Carrying Amount | 168,695 | 168,695 | 160,825 | ||
Accumulated Amortization | (151,291) | (151,291) | (154,610) | ||
Net Carrying Amount | 17,404 | 17,404 | 6,215 | ||
Trademarks & other | |||||
Finite lived intangible assets | |||||
Gross Carrying Amount | 35,959 | 35,959 | 33,079 | ||
Accumulated Amortization | (26,827) | (26,827) | (32,525) | ||
Net Carrying Amount | $ 9,132 | $ 9,132 | $ 554 |
Intangible Assets and Goodwil50
Intangible Assets and Goodwill (Future Amortization Expense) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Finite lived intangible assets future amortization expense | ||
Remaining for year ending December 31, 2015 | $ 22,328 | |
Year ending December 31, 2016 | 39,995 | |
Year ending December 31, 2017 | 29,077 | |
Year ending December 31, 2018 | 26,470 | |
Year ending December 31, 2019 | 23,415 | |
Thereafter | 82,035 | |
Net Carrying Amount | $ 223,320 | $ 82,173 |
Intangible Assets and Goodwil51
Intangible Assets and Goodwill (Goodwill) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |
Goodwill | $ 1,672,721 |
Acquisition | 291,519 |
Foreign currency translation | (22,058) |
Divestiture | (194,232) |
Goodwill | 1,747,950 |
Small & Medium Business Solutions | |
Goodwill [Roll Forward] | |
Goodwill | 471,594 |
Acquisition | 0 |
Foreign currency translation | (18,611) |
Divestiture | 0 |
Goodwill | 452,983 |
North America Mailing | |
Goodwill [Roll Forward] | |
Goodwill | 309,448 |
Acquisition | 0 |
Foreign currency translation | (9,949) |
Divestiture | 0 |
Goodwill | 299,499 |
International Mailing | |
Goodwill [Roll Forward] | |
Goodwill | 162,146 |
Acquisition | 0 |
Foreign currency translation | (8,662) |
Divestiture | 0 |
Goodwill | 153,484 |
Enterprise Business Solutions | |
Goodwill [Roll Forward] | |
Goodwill | 305,977 |
Acquisition | 0 |
Foreign currency translation | (2,786) |
Divestiture | 0 |
Goodwill | 303,191 |
Production Mail | |
Goodwill [Roll Forward] | |
Goodwill | 110,837 |
Acquisition | 0 |
Foreign currency translation | (2,786) |
Divestiture | 0 |
Goodwill | 108,051 |
Presort Services | |
Goodwill [Roll Forward] | |
Goodwill | 195,140 |
Acquisition | 0 |
Foreign currency translation | 0 |
Divestiture | 0 |
Goodwill | 195,140 |
Digital Commerce Solutions | |
Goodwill [Roll Forward] | |
Goodwill | 700,918 |
Acquisition | 291,519 |
Foreign currency translation | (661) |
Divestiture | 0 |
Goodwill | 991,776 |
Software Solutions | |
Goodwill [Roll Forward] | |
Goodwill | 677,008 |
Acquisition | 5,792 |
Foreign currency translation | (661) |
Divestiture | 0 |
Goodwill | 682,139 |
Global Ecommerce | |
Goodwill [Roll Forward] | |
Goodwill | 23,910 |
Acquisition | 285,727 |
Foreign currency translation | 0 |
Divestiture | 0 |
Goodwill | 309,637 |
Other | |
Goodwill [Roll Forward] | |
Goodwill | 194,232 |
Acquisition | 0 |
Foreign currency translation | 0 |
Divestiture | (194,232) |
Goodwill | $ 0 |
Fair Value Measurements and D52
Fair Value Measurements and Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | $ 777,470 | $ 1,114,543 |
Liabilities: | (4,530) | (2,988) |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 248,330 | 619,617 |
Liabilities: | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 529,140 | 494,926 |
Liabilities: | (4,530) | (2,988) |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Liabilities: | 0 | 0 |
Money market funds / commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 364,609 | 699,629 |
Money market funds / commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 135,822 | 505,643 |
Money market funds / commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 228,787 | 193,986 |
Money market funds / commercial paper | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 25,434 | 27,409 |
Equity securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Equity securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 25,434 | 27,409 |
Equity securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Commingled fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 22,709 | 24,077 |
Commingled fixed income securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Commingled fixed income securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 22,709 | 24,077 |
Commingled fixed income securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
U.S. Government, federal agencies and municipalities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 131,714 | 137,980 |
U.S. Government, federal agencies and municipalities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 112,508 | 113,974 |
U.S. Government, federal agencies and municipalities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 19,206 | 24,006 |
U.S. Government, federal agencies and municipalities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 65,840 | 67,448 |
Corporate notes and bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Corporate notes and bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 65,840 | 67,448 |
Corporate notes and bonds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Mortgage-backed / asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 166,326 | 156,614 |
Mortgage-backed / asset-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Mortgage-backed / asset-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 166,326 | 156,614 |
Mortgage-backed / asset-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Foreign exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 838 | 1,386 |
Liabilities: | (4,530) | (2,988) |
Foreign exchange contracts | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Liabilities: | 0 | 0 |
Foreign exchange contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 838 | 1,386 |
Liabilities: | (4,530) | (2,988) |
Foreign exchange contracts | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | 0 |
Liabilities: | $ 0 | $ 0 |
Fair Value Measurements and D53
Fair Value Measurements and Derivative Instruments (Available-for-sale Securities) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized cost | $ 361,522 | $ 357,339 |
Gross unrealized gains | 5,399 | 6,836 |
Gross unrealized losses | (3,041) | (2,133) |
Estimated fair value | 363,880 | 362,042 |
U.S. Government, federal agencies and municipalities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized cost | 131,031 | 135,839 |
Gross unrealized gains | 1,927 | 2,905 |
Gross unrealized losses | (1,244) | (764) |
Estimated fair value | 131,714 | 137,980 |
Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized cost | 65,396 | 66,170 |
Gross unrealized gains | 1,112 | 1,569 |
Gross unrealized losses | (668) | (291) |
Estimated fair value | 65,840 | 67,448 |
Mortgage-backed / asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized cost | 165,095 | 155,330 |
Gross unrealized gains | 2,360 | 2,362 |
Gross unrealized losses | (1,129) | (1,078) |
Estimated fair value | $ 166,326 | $ 156,614 |
Fair Value Measurements and D54
Fair Value Measurements and Derivative Instruments (Narrative) (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value Disclosures [Abstract] | ||
Investment securities at a loss position for more than 12 months, aggregate unrealized holding losses | $ 1 | $ 1 |
Investment securities at a loss position for more than 12 months, estimated fair value | 33 | 42 |
Investment securities at a loss position for less than 12 months, aggregate unrealized holding losses | 2 | 1 |
Investment securities at a loss position for less than 12 months, estimated fair value | 95 | 88 |
Total notional amount of outstanding contracts in cash flow hedging relationships | 18 | $ 18 |
Maximum collateral required | $ 4 |
Fair Value Measurements and D55
Fair Value Measurements and Derivative Instruments (Available-for-sale Securities Maturities) (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Fair Value Disclosures [Abstract] | |
Amortized cost - Within 1 year | $ 64,668 |
Amortized cost - After 1 year through 5 years | 63,180 |
Amortized cost - After 5 years through 10 years | 57,909 |
Amortized cost - After 10 years | 175,765 |
Amortized cost - Total | 361,522 |
Estimated fair value - Within 1 year | 64,716 |
Estimated fair value - After 1 year through 5 years | 64,229 |
Estimated fair value - After 5 years through 10 years | 58,599 |
Estimated fair value - After 10 years | 176,336 |
Estimated fair value - Total | $ 363,880 |
Fair Value Measurements and D56
Fair Value Measurements and Derivative Instruments (Derivative Instruments) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Total net derivative liabilities | $ (3,692) | $ (1,602) |
Total derivative assets | ||
Derivative [Line Items] | ||
Total net derivative liabilities | 838 | 1,386 |
Total derivative liabilities | ||
Derivative [Line Items] | ||
Total net derivative liabilities | (4,530) | (2,988) |
Foreign exchange contracts | Derivatives designated as hedging instruments | Other current assets and prepayments | ||
Derivative [Line Items] | ||
Total net derivative liabilities | 518 | 762 |
Foreign exchange contracts | Derivatives designated as hedging instruments | Accounts payable and accrued liabilities: | ||
Derivative [Line Items] | ||
Total net derivative liabilities | (415) | 0 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | Other current assets and prepayments | ||
Derivative [Line Items] | ||
Total net derivative liabilities | 320 | 624 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | Accounts payable and accrued liabilities: | ||
Derivative [Line Items] | ||
Total net derivative liabilities | $ (4,115) | $ (2,988) |
Fair Value Measurements and D57
Fair Value Measurements and Derivative Instruments (Foreign Exchange Contracts) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL to Earnings (Effective Portion) | $ 622 | $ (193) | $ 1,413 | $ (228) |
Revenue | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL to Earnings (Effective Portion) | 432 | (346) | 828 | (580) |
Cost of sales | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL to Earnings (Effective Portion) | 190 | 153 | 585 | 352 |
Foreign exchange contracts | ||||
Derivative [Line Items] | ||||
Derivative Gain (Loss) Recognized in AOCL (Effective Portion) | (418) | 17 | 755 | (52) |
Foreign exchange contracts | Selling, general and administrative expense | ||||
Derivative [Line Items] | ||||
Derivative Gain (Loss) Recognized in Earnings | $ (4,131) | $ (2,622) | $ (3,577) | $ (3,304) |
Fair Value Measurements and D58
Fair Value Measurements and Derivative Instruments (Fair Value of Debt) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Carrying value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | $ 2,994,190 | $ 3,252,006 |
Fair value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | $ 3,140,259 | $ 3,440,383 |
Restructuring Charges and Ass59
Restructuring Charges and Asset Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Restructuring Costs [Abstract] | ||||
Cash payments | $ (30,775) | $ (33,530) | ||
Proceeds from sale of former corporate world headquarters building | $ 39,000 | 38,640 | 0 | |
Restructuring Charges and Asset Impairments, Net | ||||
Restructuring Costs [Abstract] | ||||
Asset impairment charge | 5,000 | $ 5,000 | ||
International | ||||
Restructuring Costs [Abstract] | ||||
Restructuring reserve, payment period | 24 months | |||
Minimum | ||||
Restructuring Costs [Abstract] | ||||
Restructuring reserve, payment period | 12 months | |||
Maximum | ||||
Restructuring Costs [Abstract] | ||||
Restructuring reserve, payment period | 24 months | |||
Operational Excellence | ||||
Restructuring Costs [Abstract] | ||||
Balance Beginning | $ 86,259 | 50,049 | ||
Expenses, net | 9,786 | 20,014 | [1] | |
Cash payments | (28,836) | (31,431) | ||
Balance Ending | 67,209 | 67,209 | 38,632 | |
Operational Excellence | Severance and benefits costs | ||||
Restructuring Costs [Abstract] | ||||
Balance Beginning | 78,105 | 42,427 | ||
Expenses, net | 9,984 | 17,162 | [1] | |
Cash payments | (26,447) | (26,732) | ||
Balance Ending | 61,642 | 61,642 | 32,857 | |
Operational Excellence | Other exit costs | ||||
Restructuring Costs [Abstract] | ||||
Balance Beginning | 8,154 | 7,622 | ||
Expenses, net | (198) | 2,852 | [1] | |
Cash payments | (2,389) | (4,699) | ||
Balance Ending | 5,567 | 5,567 | 5,775 | |
Other Plans | ||||
Restructuring Costs [Abstract] | ||||
Balance Beginning | 3,920 | 16,523 | ||
Expenses, net | (726) | (5,245) | ||
Cash payments | (1,939) | (2,099) | ||
Balance Ending | 1,255 | 1,255 | 9,179 | |
Other Plans | Severance and benefits costs | ||||
Restructuring Costs [Abstract] | ||||
Balance Beginning | 3,731 | 16,131 | ||
Expenses, net | (726) | (5,245) | ||
Cash payments | (1,824) | (2,026) | ||
Balance Ending | 1,181 | 1,181 | 8,860 | |
Other Plans | Other exit costs | ||||
Restructuring Costs [Abstract] | ||||
Balance Beginning | 189 | 392 | ||
Expenses, net | 0 | 0 | ||
Cash payments | (115) | (73) | ||
Balance Ending | $ 74 | $ 74 | $ 319 | |
[1] | See Note 12 for additional restructuring charge. |
Debt (Details)
Debt (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Commercial paper outstanding | $ 100,000,000 | ||
Principal amount | 2,872,983,000 | $ 3,226,943,000 | |
Less: unamortized discount | 5,921,000 | 6,653,000 | |
Plus: unamortized interest rate swap proceeds | 27,128,000 | 31,716,000 | |
Total debt | 2,894,190,000 | 3,252,006,000 | |
Less: current portion long-term debt | 421,103,000 | 324,879,000 | |
Long-term debt | 2,473,087,000 | $ 2,927,127,000 | |
Repayments of debt | $ 354,909,000 | $ 599,850,000 | |
Notes due March 2015 | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.00% | 5.00% | |
Debt instrument, face amount | $ 0 | $ 274,879,000 | |
Repayments of debt | $ 275,000,000 | ||
Notes due January 2016 | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.75% | 4.75% | |
Debt instrument, face amount | $ 370,914,000 | $ 370,914,000 | |
Notes due September 2017 | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.75% | 5.75% | |
Debt instrument, face amount | $ 385,109,000 | $ 385,109,000 | |
Notes due March 2018 | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.60% | 5.60% | |
Debt instrument, face amount | $ 250,000,000 | $ 250,000,000 | |
Notes due May 2018 | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.75% | 4.75% | |
Debt instrument, face amount | $ 350,000,000 | $ 350,000,000 | |
Notes due March 2019 | |||
Debt Instrument [Line Items] | |||
Interest rate | 6.25% | 6.25% | |
Debt instrument, face amount | $ 300,000,000 | $ 300,000,000 | |
Notes due November 2022 | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.25% | 5.25% | |
Debt instrument, face amount | $ 110,000,000 | $ 110,000,000 | |
Notes due March 2024 | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.625% | 4.625% | |
Debt instrument, face amount | $ 500,000,000 | $ 500,000,000 | |
Notes due January 2037 | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.25% | 5.25% | |
Debt instrument, face amount | $ 115,041,000 | $ 115,041,000 | |
Notes due March 2043 | |||
Debt Instrument [Line Items] | |||
Interest rate | 6.70% | 6.70% | |
Debt instrument, face amount | $ 425,000,000 | $ 425,000,000 | |
Term loans | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | 50,000,000 | 130,000,000 | |
Repayments of debt | 80,000,000 | ||
Other debt | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 16,919,000 | $ 16,000,000 | |
Commercial Paper | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 0.49% |
Pensions and Other Benefit Pr61
Pensions and Other Benefit Programs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |||
United States | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Service cost | $ 38 | $ 2,023 | $ 76 | $ 4,438 | ||
Interest cost | 18,305 | 19,416 | 37,164 | 38,832 | ||
Expected return on plan assets | (25,958) | (25,956) | (52,002) | (51,912) | ||
Amortization of transition credit | 0 | 0 | 0 | 0 | ||
Amortization of prior service cost (credit) | 2 | 2 | 4 | 4 | ||
Amortization of net actuarial loss | 7,007 | 6,264 | 14,655 | 12,424 | ||
Settlement / curtailment | 0 | [1] | 821 | [1] | 0 | 3,371 |
Net periodic benefit (income) cost | (606) | 2,570 | (103) | 7,157 | ||
Foreign | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Service cost | 555 | 913 | 1,120 | 1,821 | ||
Interest cost | 6,122 | 7,276 | 12,185 | 14,445 | ||
Expected return on plan assets | (8,935) | (9,980) | (17,774) | (19,805) | ||
Amortization of transition credit | (3) | (3) | (5) | (5) | ||
Amortization of prior service cost (credit) | (16) | (15) | (33) | (30) | ||
Amortization of net actuarial loss | 1,509 | 2,103 | 2,989 | 4,179 | ||
Settlement / curtailment | 0 | [1] | 0 | [1] | 0 | 0 |
Net periodic benefit (income) cost | (768) | 294 | (1,518) | 605 | ||
Nonpension Postretirement Benefit Plans | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Service cost | 640 | 697 | 1,319 | 1,425 | ||
Interest cost | 2,151 | 2,480 | 4,526 | 4,942 | ||
Expected return on plan assets | 0 | 0 | 0 | 0 | ||
Amortization of transition credit | 0 | 0 | 0 | 0 | ||
Amortization of prior service cost (credit) | 74 | 40 | 148 | 80 | ||
Amortization of net actuarial loss | 1,562 | 1,502 | 3,953 | 3,024 | ||
Settlement / curtailment | 0 | [1] | 0 | [1] | 0 | 0 |
Net periodic benefit (income) cost | $ 4,427 | $ 4,719 | $ 9,946 | $ 9,471 | ||
[1] | Included in restructuring charges and asset impairments, net in the Condensed Consolidated Statements of Income. |
Pensions and Other Benefit Pr62
Pensions and Other Benefit Programs (Narrative) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Contributions By Employer | $ 4 | $ 14 |
Foreign | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Contributions By Employer | 11 | 14 |
Nonpension Postretirement Benefit Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Contributions By Employer | $ 11 | $ 12 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Loss Carryforwards [Line Items] | ||||
Effective tax rate (percent) | 25.00% | 33.50% | 29.80% | 28.20% |
Charge from write-off of deferred tax assets | $ 3 | |||
Tax benefits from resolution of tax examination | $ 6 | |||
Imagitas | ||||
Operating Loss Carryforwards [Line Items] | ||||
Disposition of Imagitas | $ 20 |
Noncontrolling Interests (Pre64
Noncontrolling Interests (Preferred Stockholders' Equity in Subsidiaries) (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Noncontrolling Interest [Line Items] | ||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 25.00% | |
Noncontrolling Interest, Ownership Percentage by Parent | 75.00% | |
Preferred Stock, Dividend Rate, Percentage | 4.00% | 4.00% |
Preferred Stock, Cumulative Dividend Increase Interval if Outstanding Once Callable | 6 months | |
Dividends in arrears | $ 0 | $ 0 |
Redeemable Preferred Stock Member | ||
Noncontrolling Interest [Line Items] | ||
Shares, Outstanding | 300,000 | |
Preferred Stock, Value, Issued | $ 300,000,000 | |
Preferred Stock, Dividend Rate, Percentage | 6.125% | |
Preferred Stock, Dividend Rate, Increase if Outstanding Once Callable | 50.00% | |
Preferred stock-perpetual voting, dividend increase percentage each interval once shares become callable | 50.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2015USD ($) |
Civil Investigative Demand from Department of Justice | Other (Income) Expense, Net | |
Loss Contingencies [Line Items] | |
Estimate of outcome | $ 7 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balances, beginning of period | $ 77,259 | $ 205,176 | ||
Net income | $ 151,770 | $ 94,265 | 232,382 | 138,938 |
Other comprehensive loss | 16,141 | 13,982 | (46,350) | 15,205 |
Cash dividends | ||||
Common | (75,627) | (75,974) | ||
Dividends paid - Preference stock | (10) | (11) | (21) | (22) |
Issuance of common stock | (7,346) | (2,023) | ||
Conversion to common stock | 0 | |||
Stock-based compensation expense | 11,067 | 7,976 | ||
Purchase of subsidiary shares from noncontrolling interest | (7,520) | |||
Balances, end of period | 191,364 | 281,756 | 191,364 | 281,756 |
Preferred stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balances, beginning of period | 1 | 4 | ||
Cash dividends | ||||
Conversion to common stock | (3) | |||
Balances, end of period | 1 | 1 | 1 | 1 |
Preference stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balances, beginning of period | 548 | 591 | ||
Cash dividends | ||||
Conversion to common stock | (26) | (28) | ||
Balances, end of period | 522 | 563 | 522 | 563 |
Common stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balances, beginning of period | 323,338 | 323,338 | ||
Cash dividends | ||||
Balances, end of period | 323,338 | 323,338 | 323,338 | 323,338 |
Additional paid-in capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balances, beginning of period | 178,852 | 196,977 | ||
Cash dividends | ||||
Issuance of common stock | (34,005) | (24,212) | ||
Conversion to common stock | (543) | (656) | ||
Stock-based compensation expense | 11,067 | 7,976 | ||
Purchase of subsidiary shares from noncontrolling interest | (7,520) | |||
Balances, end of period | 155,371 | 172,565 | 155,371 | 172,565 |
Retained earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balances, beginning of period | 4,897,708 | 4,715,564 | ||
Net income | 232,382 | 138,938 | ||
Cash dividends | ||||
Common | (75,627) | (75,974) | ||
Dividends paid - Preference stock | (21) | (22) | ||
Balances, end of period | 5,054,442 | 4,778,506 | 5,054,442 | 4,778,506 |
Accumulated other comprehensive loss | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balances, beginning of period | (846,156) | (574,556) | ||
Other comprehensive loss | (46,350) | 15,205 | ||
Cash dividends | ||||
Balances, end of period | (892,506) | (559,351) | (892,506) | (559,351) |
Treasury stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balances, beginning of period | (4,477,032) | (4,456,742) | ||
Cash dividends | ||||
Dividends paid - Preference stock | 0 | |||
Issuance of common stock | 26,659 | 22,189 | ||
Conversion to common stock | 569 | 687 | ||
Balances, end of period | $ (4,449,804) | $ (4,433,866) | $ (4,449,804) | $ (4,433,866) |
Accumulated Other Comprehensi67
Accumulated Other Comprehensive Loss (Reclassifications) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Gains (losses) on cash flow hedges | |||||
Revenues | $ 880,891 | $ 958,450 | $ 1,771,572 | $ 1,895,947 | |
Interest expense | (20,971) | (21,482) | (45,035) | (45,546) | |
Tax benefit | (52,351) | (46,335) | (102,898) | (54,371) | |
Net income | 156,363 | 98,859 | 241,569 | 148,126 | |
Pension and Postretirement Benefit Plans | |||||
Tax benefit | (3,614) | (3,613) | (7,781) | (7,254) | |
Reclassification out of Accumulated Other Comprehensive Loss | |||||
Gains (losses) on cash flow hedges | |||||
Revenues | [1] | (432) | (346) | (828) | (580) |
Cost of sales | [1] | (190) | 153 | (585) | 352 |
Interest expense | [1] | (507) | (507) | (1,014) | (1,014) |
Total before tax | [1] | (1,129) | (700) | (2,427) | (1,242) |
Tax benefit | [1] | 436 | 269 | 938 | 479 |
Net income | [1] | (693) | (431) | (1,489) | (763) |
Losses on available for sale securities | |||||
Unrealized losses | [1] | (18) | (505) | (42) | (852) |
Tax benefit | [1] | 7 | 186 | 16 | 314 |
Net of tax | [1] | (11) | (319) | (26) | (538) |
Pension and Postretirement Benefit Plans | |||||
Transition credit | [1],[2] | 3 | 3 | 5 | 5 |
Prior service costs | [1],[2] | (61) | (27) | (120) | (54) |
Actuarial losses | [1],[2] | (10,056) | (9,869) | (21,595) | (19,627) |
Total before tax | [1],[2] | (10,114) | (9,893) | (21,710) | (19,676) |
Tax benefit | [1],[2] | 3,614 | 3,613 | 7,781 | 7,254 |
Net of tax | [1],[2] | $ (6,500) | $ (6,280) | $ (13,929) | $ (12,422) |
[1] | Amounts in parentheses indicate debits (reductions) to income. | ||||
[2] | These items are included in the computation of net periodic costs of defined benefit pension plans and nonpension postretirement benefit plans (see Note 12 for additional details). |
Accumulated Other Comprehensi68
Accumulated Other Comprehensive Loss (Changes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Balance at | $ (846,156) | $ (574,556) | |||
Other comprehensive income (loss) before reclassifications | [1] | (61,794) | 1,482 | ||
Amounts reclassified from accumulated other comprehensive loss | [1],[2] | 15,444 | 13,723 | ||
Net current period other comprehensive income (loss) | $ 16,141 | $ 13,982 | (46,350) | 15,205 | |
Balance at | (892,506) | (559,351) | (892,506) | (559,351) | |
(Gains) losses on cash flow hedges | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Balance at | (4,689) | (6,380) | |||
Other comprehensive income (loss) before reclassifications | [1] | (1,273) | 27 | ||
Amounts reclassified from accumulated other comprehensive loss | [1],[2] | 1,489 | 763 | ||
Net current period other comprehensive income (loss) | 216 | 790 | |||
Balance at | (4,473) | (5,590) | (4,473) | (5,590) | |
(Gains) losses on available for sale securities | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Balance at | 2,966 | (1,769) | |||
Other comprehensive income (loss) before reclassifications | [1] | (1,499) | 3,657 | ||
Amounts reclassified from accumulated other comprehensive loss | [1],[2] | 26 | 538 | ||
Net current period other comprehensive income (loss) | (1,473) | 4,195 | |||
Balance at | 1,493 | 2,426 | 1,493 | 2,426 | |
Pension and postretirement benefit plans | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Balance at | (786,079) | (601,421) | |||
Other comprehensive income (loss) before reclassifications | [1] | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive loss | [1],[2] | 13,929 | 12,422 | ||
Net current period other comprehensive income (loss) | 13,929 | 12,422 | |||
Balance at | (772,150) | (588,999) | (772,150) | (588,999) | |
Foreign currency items | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Balance at | (58,354) | 35,014 | |||
Other comprehensive income (loss) before reclassifications | [1] | (59,022) | (2,202) | ||
Amounts reclassified from accumulated other comprehensive loss | [1],[2] | 0 | 0 | ||
Net current period other comprehensive income (loss) | (59,022) | (2,202) | |||
Balance at | $ (117,376) | $ 32,812 | $ (117,376) | $ 32,812 | |
[1] | Amounts are net of tax. Amounts in parentheses indicate debits to AOCL. | ||||
[2] | See table above for additional details of these reclassifications. |