Delaware | 06-0495050 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
3001 Summer Street, Stamford, Connecticut | 06926 | |
(Address of principal executive offices) | (Zip Code) |
(203) 356-5000 |
(Registrant’s telephone number, including area code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o |
Smaller reporting company o | Emerging growth company o |
Page Number | ||
Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2017 and 2016 | ||
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2017 and 2016 | ||
Condensed Consolidated Balance Sheets at June 30, 2017 and December 31, 2016 | ||
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016 | ||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue: | |||||||||||||||
Equipment sales | $ | 158,625 | $ | 152,641 | $ | 321,599 | $ | 312,002 | |||||||
Supplies | 63,228 | 65,274 | 130,046 | 137,325 | |||||||||||
Software | 86,664 | 90,615 | 164,531 | 168,673 | |||||||||||
Rentals | 95,999 | 102,869 | 195,869 | 206,959 | |||||||||||
Financing | 83,653 | 91,609 | 169,398 | 189,032 | |||||||||||
Support services | 115,299 | 131,418 | 234,146 | 259,678 | |||||||||||
Business services | 217,903 | 201,460 | 442,422 | 406,806 | |||||||||||
Total revenue | 821,371 | 835,886 | 1,658,011 | 1,680,475 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of equipment sales | 77,189 | 78,055 | 146,751 | 149,594 | |||||||||||
Cost of supplies | 19,909 | 19,624 | 41,380 | 40,314 | |||||||||||
Cost of software | 24,795 | 26,983 | 50,103 | 53,798 | |||||||||||
Cost of rentals | 21,576 | 18,415 | 42,238 | 38,910 | |||||||||||
Financing interest expense | 12,843 | 13,495 | 25,817 | 28,410 | |||||||||||
Cost of support services | 73,190 | 74,742 | 146,544 | 149,991 | |||||||||||
Cost of business services | 153,063 | 140,830 | 303,906 | 276,368 | |||||||||||
Selling, general and administrative | 297,468 | 289,116 | 603,771 | 615,998 | |||||||||||
Research and development | 32,958 | 34,513 | 64,814 | 61,081 | |||||||||||
Restructuring charges and asset impairments, net | 26,927 | 26,076 | 29,009 | 33,009 | |||||||||||
Interest expense, net | 27,600 | 20,799 | 53,276 | 40,100 | |||||||||||
Total costs and expenses | 767,518 | 742,648 | 1,507,609 | 1,487,573 | |||||||||||
Income before income taxes | 53,853 | 93,238 | 150,402 | 192,902 | |||||||||||
Provision for income taxes | 4,952 | 33,394 | 36,368 | 70,418 | |||||||||||
Income from continuing operations | 48,901 | 59,844 | 114,034 | 122,484 | |||||||||||
Loss from discontinued operations, net of tax | — | (1,660 | ) | — | (1,660 | ) | |||||||||
Net income | 48,901 | 58,184 | 114,034 | 120,824 | |||||||||||
Less: Preferred stock dividends attributable to noncontrolling interests | — | 4,594 | — | 9,188 | |||||||||||
Net income attributable to Pitney Bowes Inc. | $ | 48,901 | $ | 53,590 | $ | 114,034 | $ | 111,636 | |||||||
Amounts attributable to common stockholders: | |||||||||||||||
Net income from continuing operations | $ | 48,901 | $ | 55,250 | $ | 114,034 | $ | 113,296 | |||||||
Loss from discontinued operations, net of tax | — | (1,660 | ) | — | (1,660 | ) | |||||||||
Net income attributable to Pitney Bowes Inc. | $ | 48,901 | $ | 53,590 | $ | 114,034 | $ | 111,636 | |||||||
Basic earnings per share attributable to common stockholders (1): | |||||||||||||||
Continuing operations | $ | 0.26 | $ | 0.29 | $ | 0.61 | $ | 0.60 | |||||||
Discontinued operations | — | (0.01 | ) | — | (0.01 | ) | |||||||||
Net income attributable to Pitney Bowes Inc. | $ | 0.26 | $ | 0.29 | $ | 0.61 | $ | 0.59 | |||||||
Diluted earnings per share attributable to common stockholders (1): | |||||||||||||||
Continuing operations | $ | 0.26 | $ | 0.29 | $ | 0.61 | $ | 0.59 | |||||||
Discontinued operations | — | (0.01 | ) | — | (0.01 | ) | |||||||||
Net income attributable to Pitney Bowes Inc. | $ | 0.26 | $ | 0.28 | $ | 0.61 | $ | 0.59 | |||||||
Dividends declared per share of common stock | $ | 0.1875 | $ | 0.1875 | $ | 0.375 | $ | 0.375 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 48,901 | $ | 58,184 | $ | 114,034 | $ | 120,824 | |||||||
Less: Preferred stock dividends attributable to noncontrolling interests | — | 4,594 | — | 9,188 | |||||||||||
Net income attributable to Pitney Bowes Inc. | 48,901 | 53,590 | 114,034 | 111,636 | |||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translations | 46,791 | (9,520 | ) | 66,706 | 30,325 | ||||||||||
Net unrealized (loss) gain on cash flow hedges, net of tax of $(120), $281, $235 and $264, respectively | (196 | ) | 450 | 383 | 422 | ||||||||||
Net unrealized gain on investment securities, net of tax of $758, $1,415, $1,102 and $3,443, respectively | 1,291 | 2,409 | 1,876 | 5,863 | |||||||||||
Adjustments to pension and postretirement plans, net of tax of $(304) and $(777) for the six months ended June 30, 2017 and 2016, respectively. | — | — | (1,482 | ) | (1,230 | ) | |||||||||
Amortization of pension and postretirement costs, net of tax of $3,442, $4,122, $6,956 and $7,921, respectively | 6,624 | 6,080 | 13,335 | 12,828 | |||||||||||
Other comprehensive income (loss), net of tax | 54,510 | (581 | ) | 80,818 | 48,208 | ||||||||||
Comprehensive income attributable to Pitney Bowes Inc. | $ | 103,411 | $ | 53,009 | $ | 194,852 | $ | 159,844 |
June 30, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 840,564 | $ | 764,522 | |||
Short-term investments | 164,716 | 38,448 | |||||
Accounts receivable (net of allowance of $14,709 and $14,372, respectively) | 389,262 | 455,527 | |||||
Short-term finance receivables (net of allowance of $14,491 and $13,323, respectively) | 857,764 | 893,950 | |||||
Inventories | 121,478 | 92,726 | |||||
Current income taxes | 28,732 | 11,373 | |||||
Other current assets and prepayments | 89,061 | 68,637 | |||||
Total current assets | 2,491,577 | 2,325,183 | |||||
Property, plant and equipment, net | 327,140 | 314,603 | |||||
Rental property and equipment, net | 182,997 | 188,054 | |||||
Long-term finance receivables (net of allowance of $5,121 and $7,177, respectively) | 662,384 | 673,207 | |||||
Goodwill | 1,604,320 | 1,571,335 | |||||
Intangible assets, net | 152,019 | 165,172 | |||||
Noncurrent income taxes | 75,105 | 74,806 | |||||
Other assets | 541,806 | 524,773 | |||||
Total assets | $ | 6,037,348 | $ | 5,837,133 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 1,339,287 | $ | 1,378,822 | |||
Current income taxes | 17,349 | 34,434 | |||||
Current portion of long-term debt | 985,291 | 614,485 | |||||
Advance billings | 291,180 | 299,878 | |||||
Total current liabilities | 2,633,107 | 2,327,619 | |||||
Deferred taxes on income | 214,287 | 204,289 | |||||
Tax uncertainties and other income tax liabilities | 51,112 | 61,276 | |||||
Long-term debt | 2,543,476 | 2,750,405 | |||||
Other noncurrent liabilities | 565,993 | 597,204 | |||||
Total liabilities | 6,007,975 | 5,940,793 | |||||
Commitments and contingencies (See Note 12) | |||||||
Stockholders’ equity (deficit): | |||||||
Cumulative preferred stock, $50 par value, 4% convertible | 1 | 1 | |||||
Cumulative preference stock, no par value, $2.12 convertible | 463 | 483 | |||||
Common stock, $1 par value (480,000,000 shares authorized; 323,337,912 shares issued) | 323,338 | 323,338 | |||||
Additional paid-in capital | 131,691 | 148,125 | |||||
Retained earnings | 5,152,241 | 5,107,734 | |||||
Accumulated other comprehensive loss | (859,315 | ) | (940,133 | ) | |||
Treasury stock, at cost (136,967,821 and 137,669,194 shares, respectively) | (4,719,046 | ) | (4,743,208 | ) | |||
Total Pitney Bowes Inc. stockholders’ equity (deficit) | 29,373 | (103,660 | ) | ||||
Total liabilities and stockholders’ equity (deficit) | $ | 6,037,348 | $ | 5,837,133 |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 114,034 | $ | 120,824 | |||
Restructuring payments | (19,016 | ) | (33,866 | ) | |||
Special pension plan contributions | — | (36,731 | ) | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss on disposal of businesses | — | 2,099 | |||||
Gain on sale of technology | (6,085 | ) | — | ||||
Depreciation and amortization | 88,160 | 89,538 | |||||
Gain on debt forgiveness | — | (10,000 | ) | ||||
Stock-based compensation | 12,531 | 9,511 | |||||
Restructuring charges and asset impairments, net | 29,009 | 33,009 | |||||
Changes in operating assets and liabilities, net of acquisitions/divestitures: | |||||||
Decrease in accounts receivable | 78,279 | 46,828 | |||||
Decrease in finance receivables | 77,877 | 73,496 | |||||
Increase in inventories | (26,812 | ) | (22,601 | ) | |||
(Increase) decrease in other current assets and prepayments | (18,850 | ) | 7,206 | ||||
Decrease in accounts payable and accrued liabilities | (71,783 | ) | (75,042 | ) | |||
Decrease in current and noncurrent income taxes | (40,774 | ) | (10,801 | ) | |||
Decrease in advance billings | (20,218 | ) | (45,410 | ) | |||
Other, net | (11,705 | ) | 10,524 | ||||
Net cash provided by operating activities | 184,647 | 158,584 | |||||
Cash flows from investing activities: | |||||||
Purchases of available-for-sale securities | (70,405 | ) | (77,185 | ) | |||
Proceeds from sales/maturities of available-for-sale securities | 61,913 | 84,854 | |||||
Net change in short-term and other investments | (131,303 | ) | 55,702 | ||||
Capital expenditures | (76,621 | ) | (71,359 | ) | |||
Proceeds from sale of buildings | — | 17,671 | |||||
Acquisition of businesses, net of cash acquired | (7,889 | ) | (13,417 | ) | |||
Divestiture of businesses, net of cash transferred | — | (3,039 | ) | ||||
Change in reserve account deposits | 2,514 | (7,143 | ) | ||||
Other investing activities | (3,000 | ) | (4,480 | ) | |||
Net cash used in investing activities | (224,791 | ) | (18,396 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from the issuance of long-term debt | 395,772 | 300,000 | |||||
Principal payments of long-term debt | (229,323 | ) | (370,952 | ) | |||
Net change in short-term borrowings | — | 229,875 | |||||
Dividends paid to stockholders | (69,527 | ) | (70,979 | ) | |||
Common stock repurchases | — | (194,776 | ) | ||||
Dividends paid to noncontrolling interests | — | (9,188 | ) | ||||
Other financing activities | (5,551 | ) | (4,997 | ) | |||
Net cash provided by (used in) financing activities | 91,371 | (121,017 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 24,815 | 4,355 | |||||
Increase in cash and cash equivalents | 76,042 | 23,526 | |||||
Cash and cash equivalents at beginning of period | 764,522 | 640,190 | |||||
Cash and cash equivalents at end of period | $ | 840,564 | $ | 663,716 | |||
Cash interest paid | $ | 82,405 | $ | 78,311 | |||
Cash income tax payments, net of refunds | $ | 78,649 | $ | 84,225 |
Revenue | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
North America Mailing | $ | 341,096 | $ | 343,218 | $ | 696,674 | $ | 714,671 | |||||||
International Mailing | 95,322 | 107,581 | 188,380 | 212,567 | |||||||||||
Small & Medium Business Solutions | 436,418 | 450,799 | 885,054 | 927,238 | |||||||||||
Production Mail | 85,570 | 95,874 | 174,525 | 183,299 | |||||||||||
Presort Services | 118,452 | 115,765 | 251,129 | 243,161 | |||||||||||
Enterprise Business Solutions | 204,022 | 211,639 | 425,654 | 426,460 | |||||||||||
Software Solutions | 86,425 | 90,464 | 164,645 | 168,386 | |||||||||||
Global Ecommerce | 94,506 | 82,984 | 182,658 | 158,391 | |||||||||||
Digital Commerce Solutions | 180,931 | 173,448 | 347,303 | 326,777 | |||||||||||
Total revenue | $ | 821,371 | $ | 835,886 | $ | 1,658,011 | $ | 1,680,475 |
EBIT | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
North America Mailing | $ | 120,877 | $ | 146,897 | $ | 261,885 | $ | 307,728 | |||||||
International Mailing | 13,969 | 12,468 | 27,238 | 23,644 | |||||||||||
Small & Medium Business Solutions | 134,846 | 159,365 | 289,123 | 331,372 | |||||||||||
Production Mail | 7,631 | 12,914 | 16,595 | 19,738 | |||||||||||
Presort Services | 19,270 | 21,214 | 49,987 | 50,124 | |||||||||||
Enterprise Business Solutions | 26,901 | 34,128 | 66,582 | 69,862 | |||||||||||
Software Solutions | 7,555 | 10,151 | 10,304 | 7,579 | |||||||||||
Global Ecommerce | (4,030 | ) | (683 | ) | (8,300 | ) | (4,152 | ) | |||||||
Digital Commerce Solutions | 3,525 | 9,468 | 2,004 | 3,427 | |||||||||||
Total segment EBIT | 165,272 | 202,961 | 357,709 | 404,661 | |||||||||||
Reconciling items: | |||||||||||||||
Interest, net | (40,443 | ) | (34,294 | ) | (79,093 | ) | (68,510 | ) | |||||||
Unallocated corporate expenses | (50,134 | ) | (48,777 | ) | (105,290 | ) | (106,544 | ) | |||||||
Restructuring charges and asset impairments, net | (26,927 | ) | (26,076 | ) | (29,009 | ) | (33,009 | ) | |||||||
Gain from the sale of technology | 6,085 | — | 6,085 | — | |||||||||||
Acquisition and disposition-related expenses | — | (576 | ) | — | (3,696 | ) | |||||||||
Income before income taxes | 53,853 | 93,238 | 150,402 | 192,902 | |||||||||||
Provision for income taxes | 4,952 | 33,394 | 36,368 | 70,418 | |||||||||||
Loss from discontinued operations, net of tax | — | (1,660 | ) | — | (1,660 | ) | |||||||||
Net income | $ | 48,901 | $ | 58,184 | $ | 114,034 | $ | 120,824 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Numerator: | |||||||||||||||
Amounts attributable to common stockholders: | |||||||||||||||
Net income from continuing operations | $ | 48,901 | $ | 55,250 | $ | 114,034 | $ | 113,296 | |||||||
Loss from discontinued operations, net of tax | — | (1,660 | ) | — | (1,660 | ) | |||||||||
Net income attributable to Pitney Bowes Inc. (numerator for diluted EPS) | 48,901 | 53,590 | 114,034 | $ | 111,636 | ||||||||||
Less: Preference stock dividend | 10 | 9 | 19 | 19 | |||||||||||
Income attributable to common stockholders (numerator for basic EPS) | $ | 48,891 | $ | 53,581 | $ | 114,015 | $ | 111,617 | |||||||
Denominator: | |||||||||||||||
Weighted-average shares used in basic EPS | 186,333 | 187,395 | 186,136 | 189,929 | |||||||||||
Effect of dilutive shares: | |||||||||||||||
Conversion of Preferred stock and Preference stock | 288 | 300 | 290 | 302 | |||||||||||
Employee stock plans | 756 | 667 | 519 | 575 | |||||||||||
Weighted-average shares used in diluted EPS | 187,377 | 188,362 | 186,945 | 190,806 | |||||||||||
Basic earnings per share: | |||||||||||||||
Continuing operations | $ | 0.26 | $ | 0.29 | $ | 0.61 | $ | 0.60 | |||||||
Discontinued operations | — | (0.01 | ) | — | (0.01 | ) | |||||||||
Net Income | $ | 0.26 | $ | 0.29 | $ | 0.61 | $ | 0.59 | |||||||
Diluted earnings per share: | |||||||||||||||
Continuing operations | $ | 0.26 | $ | 0.29 | $ | 0.61 | $ | 0.59 | |||||||
Discontinued operations | — | (0.01 | ) | — | (0.01 | ) | |||||||||
Net Income | $ | 0.26 | $ | 0.28 | $ | 0.61 | $ | 0.59 | |||||||
Anti-dilutive shares not used in calculating diluted weighted-average shares | 9,916 | 6,878 | 11,379 | 8,892 |
June 30, 2017 | December 31, 2016 | ||||||
Raw materials | $ | 38,322 | $ | 28,541 | |||
Work in process | 10,541 | 6,498 | |||||
Supplies and service parts | 53,265 | 45,152 | |||||
Finished products | 31,493 | 24,678 | |||||
Inventory at FIFO cost | 133,621 | 104,869 | |||||
Excess of FIFO cost over LIFO cost | (12,143 | ) | (12,143 | ) | |||
Total inventory, net | $ | 121,478 | $ | 92,726 |
June 30, 2017 | December 31, 2016 | ||||||||||||||||||||||
North America | International | Total | North America | International | Total | ||||||||||||||||||
Sales-type lease receivables | |||||||||||||||||||||||
Gross finance receivables | $ | 1,061,888 | $ | 276,795 | $ | 1,338,683 | $ | 1,088,053 | $ | 273,262 | $ | 1,361,315 | |||||||||||
Unguaranteed residual values | 82,581 | 14,083 | 96,664 | 90,190 | 13,655 | 103,845 | |||||||||||||||||
Unearned income | (221,083 | ) | (61,768 | ) | (282,851 | ) | (223,908 | ) | (60,458 | ) | (284,366 | ) | |||||||||||
Allowance for credit losses | (8,456 | ) | (2,496 | ) | (10,952 | ) | (8,247 | ) | (2,647 | ) | (10,894 | ) | |||||||||||
Net investment in sales-type lease receivables | 914,930 | 226,614 | 1,141,544 | 946,088 | 223,812 | 1,169,900 | |||||||||||||||||
Loan receivables | |||||||||||||||||||||||
Loan receivables | 351,077 | 36,187 | 387,264 | 374,147 | 32,716 | 406,863 | |||||||||||||||||
Allowance for credit losses | (7,503 | ) | (1,157 | ) | (8,660 | ) | (8,517 | ) | (1,089 | ) | (9,606 | ) | |||||||||||
Net investment in loan receivables | 343,574 | 35,030 | 378,604 | 365,630 | 31,627 | 397,257 | |||||||||||||||||
Net investment in finance receivables | $ | 1,258,504 | $ | 261,644 | $ | 1,520,148 | $ | 1,311,718 | $ | 255,439 | $ | 1,567,157 |
Sales-type Lease Receivables | Loan Receivables | ||||||||||||||||||
North America | International | North America | International | Total | |||||||||||||||
Balance at January 1, 2017 | $ | 8,247 | $ | 2,647 | $ | 8,517 | $ | 1,089 | $ | 20,500 | |||||||||
Amounts charged to expense | 5,182 | 466 | 2,891 | 450 | 8,989 | ||||||||||||||
Write-offs and other | (4,973 | ) | (617 | ) | (3,905 | ) | (382 | ) | (9,877 | ) | |||||||||
Balance at June 30, 2017 | $ | 8,456 | $ | 2,496 | $ | 7,503 | $ | 1,157 | $ | 19,612 | |||||||||
Sales-type Lease Receivables | Loan Receivables | ||||||||||||||||||
North America | International | North America | International | Total | |||||||||||||||
Balance at January 1, 2016 | $ | 6,606 | $ | 3,542 | $ | 10,024 | $ | 1,518 | $ | 21,690 | |||||||||
Amounts charged to expense | 1,895 | 186 | 2,765 | 390 | 5,236 | ||||||||||||||
Write-offs and other | (2,784 | ) | (1,031 | ) | (3,798 | ) | (569 | ) | (8,182 | ) | |||||||||
Balance at June 30, 2016 | $ | 5,717 | $ | 2,697 | $ | 8,991 | $ | 1,339 | $ | 18,744 |
June 30, 2017 | |||||||||||||||||||
Sales-type Lease Receivables | Loan Receivables | ||||||||||||||||||
North America | International | North America | International | Total | |||||||||||||||
1 - 90 days | $ | 1,006,333 | $ | 271,713 | $ | 343,205 | $ | 36,044 | $ | 1,657,295 | |||||||||
> 90 days | 55,555 | 5,082 | 7,872 | 143 | 68,652 | ||||||||||||||
Total | $ | 1,061,888 | $ | 276,795 | $ | 351,077 | $ | 36,187 | $ | 1,725,947 | |||||||||
Past due amounts > 90 days | |||||||||||||||||||
Still accruing interest | $ | 7,484 | $ | 1,578 | $ | — | $ | — | $ | 9,062 | |||||||||
Not accruing interest | 48,071 | 3,504 | 7,872 | 143 | 59,590 | ||||||||||||||
Total | $ | 55,555 | $ | 5,082 | $ | 7,872 | $ | 143 | $ | 68,652 |
December 31, 2016 | |||||||||||||||||||
Sales-type Lease Receivables | Loan Receivables | ||||||||||||||||||
North America | International | North America | International | Total | |||||||||||||||
1 - 90 days | $ | 1,025,313 | $ | 269,247 | $ | 366,726 | $ | 32,420 | $ | 1,693,706 | |||||||||
> 90 days | 62,740 | 4,015 | 7,421 | 296 | 74,472 | ||||||||||||||
Total | $ | 1,088,053 | $ | 273,262 | $ | 374,147 | $ | 32,716 | $ | 1,768,178 | |||||||||
Past due amounts > 90 days | |||||||||||||||||||
Still accruing interest | $ | 8,831 | $ | 972 | $ | — | $ | — | $ | 9,803 | |||||||||
Not accruing interest | 53,909 | 3,043 | 7,421 | 296 | 64,669 | ||||||||||||||
Total | $ | 62,740 | $ | 4,015 | $ | 7,421 | $ | 296 | $ | 74,472 |
• | 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, 2017 | December 31, 2016 | ||||||
Sales-type lease receivables | |||||||
Low | $ | 837,486 | $ | 879,823 | |||
Medium | 152,362 | 135,953 | |||||
High | 21,767 | 22,600 | |||||
Not Scored | 50,273 | 49,677 | |||||
Total | $ | 1,061,888 | $ | 1,088,053 | |||
Loan receivables | |||||||
Low | $ | 272,022 | $ | 296,598 | |||
Medium | 55,493 | 53,647 | |||||
High | 6,672 | 7,216 | |||||
Not Scored | 16,890 | 16,686 | |||||
Total | $ | 351,077 | $ | 374,147 |
June 30, 2017 | December 31, 2016 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Customer relationships | $ | 452,614 | $ | (319,812 | ) | $ | 132,802 | $ | 445,039 | $ | (300,906 | ) | $ | 144,133 | |||||||||
Software & technology | 152,589 | (139,947 | ) | 12,642 | 150,037 | (136,508 | ) | 13,529 | |||||||||||||||
Trademarks & other | 36,981 | (30,406 | ) | 6,575 | 36,212 | (28,702 | ) | 7,510 | |||||||||||||||
Total intangible assets | $ | 642,184 | $ | (490,165 | ) | $ | 152,019 | $ | 631,288 | $ | (466,116 | ) | $ | 165,172 |
Remaining for year ending December 31, 2017 | $ | 14,245 | |
Year ending December 31, 2018 | 27,632 | ||
Year ending December 31, 2019 | 24,260 | ||
Year ending December 31, 2020 | 19,126 | ||
Year ending December 31, 2021 | 15,401 | ||
Thereafter | 51,355 | ||
Total | $ | 152,019 |
December 31, 2016 | Acquisitions | Foreign currency translation | June 30, 2017 | ||||||||||||
North America Mailing | $ | 354,000 | $ | — | $ | 9,095 | $ | 363,095 | |||||||
International Mailing | 145,566 | — | 8,085 | 153,651 | |||||||||||
Small & Medium Business Solutions | 499,566 | — | 17,180 | 516,746 | |||||||||||
Production Mail | 101,099 | — | 3,963 | 105,062 | |||||||||||
Presort Services | 196,890 | 6,229 | — | 203,119 | |||||||||||
Enterprise Business Solutions | 297,989 | 6,229 | 3,963 | 308,181 | |||||||||||
Software Solutions | 501,591 | — | 5,613 | 507,204 | |||||||||||
Global Ecommerce | 272,189 | — | — | 272,189 | |||||||||||
Digital Commerce Solutions | 773,780 | — | 5,613 | 779,393 | |||||||||||
Total goodwill | $ | 1,571,335 | $ | 6,229 | $ | 26,756 | $ | 1,604,320 |
Level 1 – | Unadjusted quoted prices in active markets for identical assets and liabilities. |
Level 2 – | Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
Level 3 – | Unobservable inputs that are supported by little or no market activity, may be derived from internally developed methodologies based on management’s best estimate of fair value and that are significant to the fair value of the asset or liability. |
June 30, 2017 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Investment securities | |||||||||||||||
Money market funds / commercial paper | $ | 169,023 | $ | 464,970 | $ | — | $ | 633,993 | |||||||
Equity securities | — | 24,186 | — | 24,186 | |||||||||||
Commingled fixed income securities | 1,560 | 21,871 | — | 23,431 | |||||||||||
Debt securities - U.S. and foreign governments, agencies and municipalities | 115,852 | 16,646 | — | 132,498 | |||||||||||
Debt securities - corporate | — | 77,352 | — | 77,352 | |||||||||||
Mortgage-backed / asset-backed securities | — | 162,081 | — | 162,081 | |||||||||||
Derivatives | |||||||||||||||
Interest rate swap | — | 1,909 | — | 1,909 | |||||||||||
Foreign exchange contracts | — | 298 | — | 298 | |||||||||||
Total assets | $ | 286,435 | $ | 769,313 | $ | — | $ | 1,055,748 | |||||||
Liabilities: | |||||||||||||||
Derivatives | |||||||||||||||
Foreign exchange contracts | $ | — | $ | (539 | ) | $ | — | $ | (539 | ) | |||||
Total liabilities | $ | — | $ | (539 | ) | $ | — | $ | (539 | ) |
December 31, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Investment securities | |||||||||||||||
Money market funds / commercial paper | $ | 114,471 | $ | 217,175 | $ | — | $ | 331,646 | |||||||
Equity securities | — | 24,571 | — | 24,571 | |||||||||||
Commingled fixed income securities | 1,536 | 22,132 | — | 23,668 | |||||||||||
Debt securities - U.S. and foreign governments, agencies and municipalities | 116,822 | 19,358 | — | 136,180 | |||||||||||
Debt securities - corporate | — | 69,891 | — | 69,891 | |||||||||||
Mortgage-backed / asset-backed securities | — | 158,996 | — | 158,996 | |||||||||||
Derivatives | |||||||||||||||
Interest rate swap | — | 1,588 | — | 1,588 | |||||||||||
Foreign exchange contracts | — | 637 | — | 637 | |||||||||||
Total assets | $ | 232,829 | $ | 514,348 | $ | — | $ | 747,177 | |||||||
Liabilities: | |||||||||||||||
Derivatives | |||||||||||||||
Foreign exchange contracts | $ | — | $ | (3,717 | ) | $ | — | $ | (3,717 | ) | |||||
Total liabilities | $ | — | $ | (3,717 | ) | $ | — | $ | (3,717 | ) |
• | 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. |
• | Debt Securities – U.S. and Foreign Governments, Agencies and Municipalities: Debt securities are classified as Level 1 where active, high volume trades for identical securities exist. Valuation adjustments are not applied to these securities. Debt securities 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. |
• | Debt Securities – Corporate: Corporate debt securities 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 Securities / 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. |
June 30, 2017 | |||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||
U.S. and foreign governments, agencies and municipalities | $ | 124,051 | $ | 2,142 | $ | (1,092 | ) | $ | 125,101 | ||||||
Corporate notes and bonds | 75,876 | 1,779 | (303 | ) | 77,352 | ||||||||||
Commingled fixed income securities | 1,584 | — | (24 | ) | 1,560 | ||||||||||
Mortgage-backed / asset-backed securities | 161,676 | 1,776 | (1,371 | ) | 162,081 | ||||||||||
Total | $ | 363,187 | $ | 5,697 | $ | (2,790 | ) | $ | 366,094 |
December 31, 2016 | |||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||
U.S. and foreign governments, agencies and municipalities | $ | 136,316 | $ | 1,571 | $ | (1,707 | ) | $ | 136,180 | ||||||
Corporate notes and bonds | 69,376 | 1,180 | (665 | ) | 69,891 | ||||||||||
Commingled fixed income securities | 1,568 | — | (32 | ) | 1,536 | ||||||||||
Mortgage-backed / asset-backed securities | 159,312 | 1,566 | (1,882 | ) | 158,996 | ||||||||||
Total | $ | 366,572 | $ | 4,317 | $ | (4,286 | ) | $ | 366,603 |
Amortized cost | Estimated fair value | ||||||
Within 1 year | $ | 24,079 | $ | 24,146 | |||
After 1 year through 5 years | 116,356 | 116,910 | |||||
After 5 years through 10 years | 65,193 | 65,864 | |||||
After 10 years | 157,559 | 159,174 | |||||
Total | $ | 363,187 | $ | 366,094 |
Designation of Derivatives | Balance Sheet Location | June 30, 2017 | December 31, 2016 | |||||||
Derivatives designated as hedging instruments | ||||||||||
Foreign exchange contracts | Other current assets and prepayments | $ | 50 | $ | 487 | |||||
Accounts payable and accrued liabilities | (401 | ) | (136 | ) | ||||||
Interest rate swap | Other assets | 1,909 | 1,588 | |||||||
Derivatives not designated as hedging instruments | ||||||||||
Foreign exchange contracts | Other current assets and prepayments | 248 | 150 | |||||||
Accounts payable and accrued liabilities | (138 | ) | (3,581 | ) | ||||||
Total derivative assets | $ | 2,207 | $ | 2,225 | ||||||
Total derivative liabilities | (539 | ) | (3,717 | ) | ||||||
Total net derivative asset (liabilities) | $ | 1,668 | $ | (1,492 | ) |
Three Months Ended June 30, | ||||||||||||||||||
Derivative Gain (Loss) Recognized in AOCI (Effective Portion) | Location of Gain (Loss) (Effective Portion) | Gain (Loss) Reclassified from AOCI to Earnings (Effective Portion) | ||||||||||||||||
Derivative Instrument | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
Foreign exchange contracts | $ | (599 | ) | $ | 437 | Revenue | $ | 34 | (353 | ) | ||||||||
Cost of sales | 36 | 145 | ||||||||||||||||
Interest rate swap | (147 | ) | — | Interest Expense | — | — | ||||||||||||
$ | (746 | ) | $ | 437 | $ | 70 | $ | (208 | ) | |||||||||
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 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
Foreign exchange contracts | $ | (549 | ) | $ | 45 | Revenue | $ | 6 | $ | (733 | ) | |||||||
Cost of sales | 148 | 370 | ||||||||||||||||
Interest rate swap | 321 | — | Interest Expense | — | — | |||||||||||||
$ | (228 | ) | $ | 45 | $ | 154 | $ | (363 | ) |
Three Months Ended June 30, | ||||||||||
Derivative Gain (Loss) Recognized in Earnings | ||||||||||
Derivatives Instrument | Location of Derivative Gain (Loss) | 2017 | 2016 | |||||||
Foreign exchange contracts | Selling, general and administrative expense | $ | 789 | $ | 4,580 | |||||
Six Months Ended June 30, | ||||||||||
Derivative Gain (Loss) Recognized in Earnings | ||||||||||
Derivatives Instrument | Location of Derivative Gain (Loss) | 2017 | 2016 | |||||||
Foreign exchange contracts | Selling, general and administrative expense | $ | (1,061 | ) | $ | (1,397 | ) |
June 30, 2017 | December 31, 2016 | ||||||
Carrying value | $ | 3,528,767 | $ | 3,364,890 | |||
Fair value | $ | 3,616,922 | $ | 3,412,581 |
Severance and benefits costs | Other exit costs | Total | |||||||||
Balance at January 1, 2017 | $ | 28,376 | $ | 281 | $ | 28,657 | |||||
Expenses, net | 23,859 | 1,560 | 25,419 | ||||||||
Cash payments | (18,519 | ) | (497 | ) | (19,016 | ) | |||||
Balance at June 30, 2017 | $ | 33,716 | $ | 1,344 | $ | 35,060 | |||||
Balance at January 1, 2016 | $ | 43,700 | $ | 3,722 | $ | 47,422 | |||||
Expenses, net | 21,399 | 1,322 | 22,721 | ||||||||
Cash payments | (30,969 | ) | (2,897 | ) | (33,866 | ) | |||||
Balance at June 30, 2016 | $ | 34,130 | $ | 2,147 | $ | 36,277 |
Interest rate | June 30, 2017 | December 31, 2016 | |||||||
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 October 2021 | 3.375% | 600,000 | 600,000 | ||||||
Notes due May 2022 | 3.875% | 400,000 | — | ||||||
Notes due March 2024 | 4.625% | 500,000 | 500,000 | ||||||
Notes due January 2037 | 5.25% | 35,841 | 115,041 | ||||||
Notes due March 2043 | 6.7% | 425,000 | 425,000 | ||||||
Term loans | Variable | 300,000 | 450,000 | ||||||
Other debt | 5,552 | 5,677 | |||||||
Principal amount | 3,551,502 | 3,380,827 | |||||||
Less: unamortized debt discount and issuance costs | 30,630 | 28,796 | |||||||
Plus: unamortized interest rate swap proceeds | 7,895 | 12,859 | |||||||
Total debt | 3,528,767 | 3,364,890 | |||||||
Less: current portion long-term debt | 985,291 | 614,485 | |||||||
Long-term debt | $ | 2,543,476 | $ | 2,750,405 |
Defined Benefit Pension Plans | Nonpension Postretirement Benefit Plans | ||||||||||||||||||||||
United States | Foreign | ||||||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||
June 30, | June 30, | June 30, | |||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Service cost | $ | 34 | $ | 22 | $ | 559 | $ | 546 | $ | 434 | $ | 521 | |||||||||||
Interest cost | 17,121 | 18,072 | 4,640 | 5,746 | 1,770 | 1,847 | |||||||||||||||||
Expected return on plan assets | (24,369 | ) | (25,370 | ) | (7,961 | ) | (8,581 | ) | — | — | |||||||||||||
Amortization of transition credit | — | — | (2 | ) | (2 | ) | — | — | |||||||||||||||
Amortization of prior service (credit) cost | (15 | ) | (15 | ) | (17 | ) | (18 | ) | 74 | 74 | |||||||||||||
Amortization of net actuarial loss | 7,229 | 6,851 | 1,892 | 1,373 | 905 | 447 | |||||||||||||||||
Settlement (1) | — | 690 | — | — | — | — | |||||||||||||||||
Net periodic benefit cost (income) | $ | — | $ | 250 | $ | (889 | ) | $ | (936 | ) | $ | 3,183 | $ | 2,889 | |||||||||
Defined Benefit Pension Plans | Nonpension Postretirement Benefit Plans | ||||||||||||||||||||||
United States | Foreign | ||||||||||||||||||||||
Six Months Ended | Six Months Ended | Six Months Ended | |||||||||||||||||||||
June 30, | June 30, | June 30, | |||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Service cost | $ | 64 | $ | 54 | $ | 1,101 | $ | 1,073 | $ | 853 | $ | 1,022 | |||||||||||
Interest cost | 34,366 | 36,902 | 9,184 | 11,407 | 3,541 | $ | 3,983 | ||||||||||||||||
Expected return on plan assets | (48,917 | ) | (50,959 | ) | (15,742 | ) | (17,053 | ) | — | — | |||||||||||||
Amortization of transition credit | — | — | (4 | ) | (4 | ) | — | — | |||||||||||||||
Amortization of prior service (credit) cost | (30 | ) | (30 | ) | (35 | ) | (35 | ) | 148 | 148 | |||||||||||||
Amortization of net actuarial loss | 14,497 | 13,557 | 3,926 | 2,716 | 1,789 | 1,807 | |||||||||||||||||
Settlement (1) | — | 1,788 | — | — | — | — | |||||||||||||||||
Net periodic benefit cost (income) | $ | (20 | ) | $ | 1,312 | $ | (1,570 | ) | $ | (1,896 | ) | $ | 6,331 | $ | 6,960 |
Preferred stock | Preference stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | Total equity (deficit) | ||||||||||||||||||||||||
Balance at January 1, 2017 | $ | 1 | $ | 483 | $ | 323,338 | $ | 148,125 | $ | 5,107,734 | $ | (940,133 | ) | $ | (4,743,208 | ) | $ | (103,660 | ) | ||||||||||||
Net income | — | — | — | — | 114,034 | — | — | 114,034 | |||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 80,818 | — | 80,818 | |||||||||||||||||||||||
Dividends paid | — | — | — | — | (69,527 | ) | — | — | (69,527 | ) | |||||||||||||||||||||
Issuance of common stock | — | — | — | (28,567 | ) | — | — | 23,744 | (4,823 | ) | |||||||||||||||||||||
Conversion to common stock | (20 | ) | — | (398 | ) | — | — | 418 | — | ||||||||||||||||||||||
Stock-based compensation expense | — | — | — | 12,531 | — | — | — | 12,531 | |||||||||||||||||||||||
Balance at June 30, 2017 | $ | 1 | $ | 463 | $ | 323,338 | $ | 131,691 | $ | 5,152,241 | $ | (859,315 | ) | $ | (4,719,046 | ) | $ | 29,373 |
Preferred stock | Preference stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | Total equity | ||||||||||||||||||||||||
Balance at January 1, 2016 | $ | 1 | $ | 505 | $ | 323,338 | $ | 161,280 | $ | 5,155,537 | $ | (888,635 | ) | $ | (4,573,305 | ) | $ | 178,721 | |||||||||||||
Net income | — | — | — | — | 111,636 | — | — | 111,636 | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | 48,208 | — | 48,208 | |||||||||||||||||||||||
Dividends paid | — | — | — | — | (70,979 | ) | — | — | (70,979 | ) | |||||||||||||||||||||
Issuance of common stock | — | — | — | (22,592 | ) | — | — | 18,809 | (3,783 | ) | |||||||||||||||||||||
Conversion to common stock | — | (16 | ) | — | (320 | ) | — | — | 336 | — | |||||||||||||||||||||
Stock-based compensation expense | — | — | — | 9,786 | — | — | — | 9,786 | |||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | — | (194,776 | ) | (194,776 | ) | |||||||||||||||||||||
Balance at June 30, 2016 | $ | 1 | $ | 489 | $ | 323,338 | $ | 148,154 | $ | 5,196,194 | $ | (840,427 | ) | $ | (4,748,936 | ) | $ | 78,813 |
Amount Reclassified from AOCI (a) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Gains (losses) on cash flow hedges | |||||||||||||||
Revenue | $ | 34 | $ | (353 | ) | $ | 6 | $ | (733 | ) | |||||
Cost of sales | 36 | 145 | 148 | 370 | |||||||||||
Interest expense, net | (507 | ) | (507 | ) | (1,014 | ) | (1,014 | ) | |||||||
Total before tax | (437 | ) | (715 | ) | (860 | ) | (1,377 | ) | |||||||
Benefit for income tax | 170 | 277 | 336 | 535 | |||||||||||
Net of tax | $ | (267 | ) | $ | (438 | ) | $ | (524 | ) | $ | (842 | ) | |||
Gains (losses) on available for sale securities | |||||||||||||||
Interest expense, net | $ | (117 | ) | $ | (19 | ) | $ | (226 | ) | $ | (1 | ) | |||
Benefit provision for income tax | 44 | 7 | 84 | — | |||||||||||
Net of tax | $ | (73 | ) | $ | (12 | ) | $ | (142 | ) | $ | (1 | ) | |||
Pension and Postretirement Benefit Plans (b) | |||||||||||||||
Transition credit | $ | 2 | $ | 2 | $ | 4 | $ | 4 | |||||||
Prior service costs | (42 | ) | (41 | ) | (83 | ) | (83 | ) | |||||||
Actuarial losses | (10,026 | ) | (9,361 | ) | (20,212 | ) | (19,868 | ) | |||||||
Total before tax | (10,066 | ) | (9,400 | ) | (20,291 | ) | (19,947 | ) | |||||||
Benefit from income tax | 3,442 | 4,122 | 6,956 | 7,919 | |||||||||||
Net of tax | $ | (6,624 | ) | $ | (5,278 | ) | $ | (13,335 | ) | $ | (12,028 | ) |
(b) | Reclassified from accumulated other comprehensive loss into selling, general and administrative expenses. These amounts are included in the computation of net periodic costs (see Note 10 for additional details). |
Cash flow hedges | Available for sale securities | Pension and postretirement benefit plans | Foreign currency adjustments | Total | |||||||||||||||
Balance at January 1, 2017 | $ | (1,485 | ) | $ | 120 | $ | (787,813 | ) | $ | (150,955 | ) | $ | (940,133 | ) | |||||
Other comprehensive income (loss) before reclassifications (a) | (141 | ) | 1,734 | (1,482 | ) | 66,706 | 66,817 | ||||||||||||
Reclassifications into earnings (a), (b) | 524 | 142 | 13,335 | — | 14,001 | ||||||||||||||
Net other comprehensive income | 383 | 1,876 | 11,853 | 66,706 | 80,818 | ||||||||||||||
Balance at June 30, 2017 | $ | (1,102 | ) | $ | 1,996 | $ | (775,960 | ) | $ | (84,249 | ) | $ | (859,315 | ) |
Cash flow hedges | Available for sale securities | Pension and postretirement benefit plans | Foreign currency adjustments | Total | |||||||||||||||
Balance at January 1, 2016 | $ | (3,912 | ) | $ | 536 | $ | (738,768 | ) | $ | (146,491 | ) | $ | (888,635 | ) | |||||
Other comprehensive (loss) income before reclassifications (a) | (420 | ) | 5,862 | (430 | ) | 30,325 | 35,337 | ||||||||||||
Reclassifications into earnings (a), (b) | 842 | 1 | 12,028 | — | 12,871 | ||||||||||||||
Net other comprehensive (loss) income | 422 | 5,863 | 11,598 | 30,325 | 48,208 | ||||||||||||||
Balance at June 30, 2016 | $ | (3,490 | ) | $ | 6,399 | $ | (727,170 | ) | $ | (116,166 | ) | $ | (840,427 | ) |
• | declining physical mail volumes |
• | competitive factors, including pricing pressures; technological developments; the introduction of new products and services by competitors, and fuel prices |
• | our success in developing new products and services, including digital-based products and services, obtaining regulatory approval if required, and the market’s acceptance of these new products and services |
• | our ability to fully utilize the new enterprise business platform in North America and successfully implement it internationally without significant disruption to existing operations |
• | the continued availability and security of key information systems and the cost to comply with information security requirements and privacy laws |
• | a breach of security, including a cyberattack or other comparable event |
• | the success of our investment in rebranding the company to build market awareness and to create new demand for our products, services and solutions |
• | changes in postal or banking regulations |
• | the loss of some of our larger clients in the Global Ecommerce segment |
• | macroeconomic factors, including global and regional business conditions that adversely impact customer demand, foreign currency exchange rates, interest rates and labor conditions |
• | capital market disruptions or credit rating downgrades that adversely impact our ability to access capital markets at reasonable costs |
• | third-party suppliers' ability to provide product components, assemblies or inventories |
• | our success at managing the relationships with our outsource providers, including the costs of outsourcing functions and operations not central to our business |
• | integrating newly acquired businesses, including operations and product and service offerings |
• | intellectual property infringement claims |
• | our success at managing customer credit risk |
• | significant changes in pension, health care and retiree medical costs |
• | income tax adjustments or other regulatory levies for prior audit years and changes in tax laws, rulings or regulations |
• | a disruption of our businesses due to changes in international or national political conditions, including the use of the mail for transmitting harmful biological agents or other terrorist attacks |
• | acts of nature |
2017 | 2016 | Change | ||||||
Revenue | $ | 821,371 | $ | 835,886 | (2 | )% | ||
Income from continuing operations | $ | 48,901 | $ | 59,844 | (18 | )% | ||
Loss from discontinued operations, net of tax | $ | — | $ | (1,660 | ) | 100 | % | |
Net income | $ | 48,901 | $ | 58,184 | (16 | )% | ||
Earnings per share from continuing operations - diluted | $ | 0.26 | $ | 0.29 | (8 | )% |
• | The results reflect growth in business services revenue and equipment sales and declines in financing, support services, supplies, rentals and software revenue. |
• | SMB revenue declined 3% as reported and 2% on a constant currency basis. North America Mailing revenue declined 1% driven by continued declines in recurring revenue streams, partially offset by growth in equipment sales. The growth in equipment sales reflects new product offerings, including the initial SendPro products launched last year and digital offerings. Equipment sales growth also benefited from a favorable comparison to the prior year, which was impacted by the enterprise business platform implementation in the second quarter of 2016. International Mailing revenue declined 11% as reported and 7% on a constant currency basis. |
• | EBS revenue declined 4% as reported and 3% on a constant currency basis. Presort Services revenue grew 2% driven by higher standard mail volumes processed and higher revenue per piece in flats. Production Mail revenue declined 11% as reported and 10% on a constant currency basis driven by a decline in equipment sales and a continued decline in support services revenues as a result of the shift from in-house mail production to third party service bureaus who service their own equipment. |
• | DCS revenue grew 4% as reported and 7% on a constant currency basis. Global Ecommerce revenue grew 14% as reported and 16% on a constant currency basis driven by growth in domestic shipping and the U.K. outbound marketplace. We continued to add retailers and invest in market-growth opportunities and innovation. Software Solutions revenue declined 4% as reported and 2% on a constant currency basis, as growth in data and maintenance were more than offset by a decline in license revenue. We continued to build our partner channels, which contributed to revenue. |
2017 | 2016 | Change | ||||||
Revenue | $ | 1,658,011 | $ | 1,680,475 | (1 | )% | ||
Income from continuing operations | $ | 114,034 | $ | 122,484 | (7 | )% | ||
Loss from discontinued operations, net of tax | $ | — | $ | (1,660 | ) | 100 | % | |
Net income | $ | 114,034 | $ | 120,824 | (6 | )% | ||
Earnings per share from continuing operations - diluted | $ | 0.61 | $ | 0.59 | 4 | % | ||
Net Cash Provided by Operations | $ | 184,647 | $ | 158,584 | 16 | % |
• | The results reflect growth in business services revenue and equipment sales and declines in financing, support services, supplies and rentals revenue. |
• | SMB revenue declined 5% as reported and 4% on a constant currency basis. North America Mailing revenue declined 3% driven by continued declines in recurring revenue streams, partially offset by growth in equipment sales. The equipment sales growth reflects new product offerings, including the initial SendPro products launched last year and digital offerings. Equipment sales growth also benefited from a favorable comparison to the prior year, which was impacted by the enterprise business platform implementation in the second quarter of 2016. International Mailing revenue declined 11% as reported and 7% on a constant currency basis. |
• | EBS revenue was flat on both a reported and constant currency basis. Presort Services revenue grew 3% driven by higher standard mail volumes processed and higher revenue per piece in flats. Production Mail revenue declined 5% as reported and 3% on a constant currency basis driven by a continued decline in support services revenues as a result of the shift from in-house mail production to third party service bureaus who service their own equipment, and a decline in equipment sales. |
• | DCS revenue grew 6% as reported and 9% on a constant currency basis. Global Ecommerce revenue grew 15% as reported and 18% on a constant currency basis driven by growth in domestic shipping and the UK outbound marketplace. We continued to invest in market-growth opportunities and innovation. Software Solutions revenue declined 2% as reported and was flat on a constant currency basis, as growth in data and maintenance was more than offset by a decline in license revenue. |
• | reduce debt by $229 million; |
• | pay dividends of $70 million to our common stockholders; and |
• | invest $77 million in capital expenditures. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
2017 | 2016 | Actual % change | Constant Currency % change | 2017 | 2016 | Actual % change | Constant Currency % change | ||||||||||||||||||||
Equipment sales | $ | 158,625 | $ | 152,641 | 4 | % | 5 | % | $ | 321,599 | $ | 312,002 | 3 | % | 4 | % | |||||||||||
Supplies | 63,228 | 65,274 | (3 | )% | (1 | )% | 130,046 | 137,325 | (5 | )% | (4 | )% | |||||||||||||||
Software | 86,664 | 90,615 | (4 | )% | (2 | )% | 164,531 | 168,673 | (2 | )% | — | % | |||||||||||||||
Rentals | 95,999 | 102,869 | (7 | )% | (6 | )% | 195,869 | 206,959 | (5 | )% | (5 | )% | |||||||||||||||
Financing | 83,653 | 91,609 | (9 | )% | (8 | )% | 169,398 | 189,032 | (10 | )% | (9 | )% | |||||||||||||||
Support services | 115,299 | 131,418 | (12 | )% | (11 | )% | 234,146 | 259,678 | (10 | )% | (9 | )% | |||||||||||||||
Business services | 217,903 | 201,460 | 8 | % | 9 | % | 442,422 | 406,806 | 9 | % | 10 | % | |||||||||||||||
Total revenue | $ | 821,371 | $ | 835,886 | (2 | )% | — | % | $ | 1,658,011 | $ | 1,680,475 | (1 | )% | — | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
Percentage of Revenue | Percentage of Revenue | ||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
Cost of equipment sales | $ | 77,189 | $ | 78,055 | 48.7 | % | 51.1 | % | $ | 146,751 | $ | 149,594 | 45.6 | % | 47.9 | % | |||||||||||
Cost of supplies | 19,909 | 19,624 | 31.5 | % | 30.1 | % | 41,380 | 40,314 | 31.8 | % | 29.4 | % | |||||||||||||||
Cost of software | 24,795 | 26,983 | 28.6 | % | 29.8 | % | 50,103 | 53,798 | 30.5 | % | 31.9 | % | |||||||||||||||
Cost of rentals | 21,576 | 18,415 | 22.5 | % | 17.9 | % | 42,238 | 38,910 | 21.6 | % | 18.8 | % | |||||||||||||||
Financing interest expense | 12,843 | 13,495 | 15.4 | % | 14.7 | % | 25,817 | 28,410 | 15.2 | % | 15.0 | % | |||||||||||||||
Cost of support services | 73,190 | 74,742 | 63.5 | % | 56.9 | % | 146,544 | 149,991 | 62.6 | % | 57.8 | % | |||||||||||||||
Cost of business services | 153,063 | 140,830 | 70.2 | % | 69.9 | % | 303,906 | 276,368 | 68.7 | % | 67.9 | % | |||||||||||||||
Total cost of revenue | $ | 382,565 | $ | 372,144 | 46.6 | % | 44.5 | % | $ | 756,739 | $ | 737,385 | 45.6 | % | 43.9 | % |
• | 12% from higher equipment sales in North America Mailing due to increased sales in Mail Finishing, which includes the initial SendPro products launched last year and, in part, reflecting a favorable comparison to prior year, which was affected by the enterprise business platform implementation in the second quarter of 2016; partially offset by |
• | 4% from lower sorter placements in Production Mail; and |
• | 2% from a decline in equipment sales in International Mailing. |
• | 7% from higher equipment sales in North America Mailing, reflecting a favorable comparison to prior year, which was impacted by the enterprise business platform implementation in the second quarter of 2016; partially offset by |
• | 2% from a decline in equipment sales in International Mailing. |
• | 2% from lower supplies revenue in International Mailing; partially offset by |
• | 1% increase from North America Mailing primarily due to the impact of the enterprise business platform implementation in the second quarter of 2016. |
• | 3% from North America mailing primarily due to a decline in installed mailing equipment and postage volumes; and |
• | 1% from a decline in International Mailing revenue. |
• | 4% from lower licensing fees; partially offset by |
• | 2% from higher data revenue. |
• | 9% from a decline in installed mailing equipment worldwide; and |
• | 2% from lower maintenance revenue on production mail equipment as some in-house mailers moved their mail processing to third-party service bureaus who service their own equipment. |
• | 7% from a decline in installed mailing equipment worldwide; and |
• | 2% from lower maintenance revenue on production mail equipment as some in-house mailers moved their mail processing to third-party service bureaus who service their own equipment. |
• | 7% from growth in Global Ecommerce due to higher cross-border and retail volumes, particularly in the U.K.; |
• | 1% from higher revenue in Presort Services from higher volumes of mail processed; and |
• | 1% from higher revenue in North America Mailing. |
• | 7% from growth in Global Ecommerce due to higher cross-border and retail volumes; and |
• | 2% from higher revenue in Presort Services from higher volumes of mail processed. |
Revenue | |||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
2017 | 2016 | Actual % change | Constant Currency % change | 2017 | 2016 | Actual % change | Constant Currency % change | ||||||||||||||||||||
North America Mailing | $ | 341,096 | $ | 343,218 | (1 | )% | — | % | $ | 696,674 | $ | 714,671 | (3 | )% | (3 | )% | |||||||||||
International Mailing | 95,322 | 107,581 | (11 | )% | (7 | )% | 188,380 | 212,567 | (11 | )% | (7 | )% | |||||||||||||||
Small & Medium Business Solutions | 436,418 | 450,799 | (3 | )% | (2 | )% | 885,054 | 927,238 | (5 | )% | (4 | )% | |||||||||||||||
Production Mail | 85,570 | 95,874 | (11 | )% | (10 | )% | 174,525 | 183,299 | (5 | )% | (3 | )% | |||||||||||||||
Presort Services | 118,452 | 115,765 | 2 | % | 2 | % | 251,129 | 243,161 | 3 | % | 3 | % | |||||||||||||||
Enterprise Business Solutions | 204,022 | 211,639 | (4 | )% | (3 | )% | 425,654 | 426,460 | — | % | — | % | |||||||||||||||
Software Solutions | 86,425 | 90,464 | (4 | )% | (2 | )% | 164,645 | 168,386 | (2 | )% | — | % | |||||||||||||||
Global Ecommerce | 94,506 | 82,984 | 14 | % | 16 | % | 182,658 | 158,391 | 15 | % | 18 | % | |||||||||||||||
Digital Commerce Solutions | 180,931 | 173,448 | 4 | % | 7 | % | 347,303 | 326,777 | 6 | % | 9 | % | |||||||||||||||
Total | $ | 821,371 | $ | 835,886 | (2 | )% | — | % | $ | 1,658,011 | $ | 1,680,475 | (1 | )% | — | % |
EBIT | |||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2017 | 2016 | % change | 2017 | 2016 | % change | ||||||||||||||||
North America Mailing | $ | 120,877 | $ | 146,897 | (18 | )% | $ | 261,885 | $ | 307,728 | (15 | )% | |||||||||
International Mailing | 13,969 | 12,468 | 12 | % | 27,238 | 23,644 | 15 | % | |||||||||||||
Small & Medium Business Solutions | 134,846 | 159,365 | (15 | )% | 289,123 | 331,372 | (13 | )% | |||||||||||||
Production Mail | 7,631 | 12,914 | (41 | )% | 16,595 | 19,738 | (16 | )% | |||||||||||||
Presort Services | 19,270 | 21,214 | (9 | )% | 49,987 | 50,124 | — | % | |||||||||||||
Enterprise Business Solutions | 26,901 | 34,128 | (21 | )% | 66,582 | 69,862 | (5 | )% | |||||||||||||
Software Solutions | 7,555 | 10,151 | (26 | )% | 10,304 | 7,579 | 36 | % | |||||||||||||
Global Ecommerce | (4,030 | ) | (683 | ) | > (100)% | (8,300 | ) | (4,152 | ) | (100 | )% | ||||||||||
Digital Commerce Solutions | 3,525 | 9,468 | (63 | )% | 2,004 | 3,427 | (42 | )% | |||||||||||||
Total | $ | 165,272 | $ | 202,961 | (19 | )% | $ | 357,709 | $ | 404,661 | (12 | )% |
• | 5% from higher equipment sales due to increased sales in Mail Finishing, which includes the initial SendPro products launched last year and, in part, reflecting a favorable comparison to prior year, which was affected by the enterprise business platform implementation in the second quarter of 2016; partially offset by |
• | 4% from declines in rental and support services revenue due to a decline in installed mailing equipment and lower postage volumes; and |
• | 2% from lower financing revenue primarily due to a declining lease portfolio and lower fees. |
• | 2% from lower financing revenue primarily due to a declining lease portfolio and lower fees; and |
• | 3% from declines in rentals and support services revenue due to a decline in installed mailing equipment and lower postage volumes; partially offset by |
• | 3% from higher equipment sales due to increased sales in Mail Finishing, which includes the initial SendPro products launched last year and, in part, reflecting a favorable comparison to prior year, which was affected by the enterprise business platform implementation in the second quarter of 2016. |
• | 4% from lower equipment sales, particularly in the UK, France and Italy partially offset by growth in Japan; and |
• | 3% from declines in rental, financing and support services revenue resulting from a decline in installed mailing equipment and the lease portfolio. |
• | 4% from lower equipment sales, primarily in the U.K., France, Germany and Italy, partially offset by growth in Japan; and |
• | 3% from declines in rental, financing and support services revenue resulting from a decline in installed mailing equipment and the lease portfolio. |
• | 6% from lower equipment sales due primarily to lower sorter equipment placements, partially offset by higher inserter equipment sales; and |
• | 3% due to lower support services revenue as a result of some in-house mailers moved their mail processing to third-party outsourcers who service their own equipment. |
• | 4% from lower licensing fees; partially offset by |
• | 2% from higher data revenue. |
• | 10% from higher domestic ecommerce shipping revenues; |
• | 5% from higher cross-border marketplace volumes, particularly in the U.K.; and |
• | 1% from higher retail volumes. |
• | 10% from higher domestic ecommerce shipping revenues; |
• | 5% from higher cross-border marketplace volumes, particularly in the U.K.; and |
• | 3% from higher retail volumes. |
2017 | 2016 | Change | |||||||||
Net cash provided by operating activities | $ | 184,647 | $ | 158,584 | $ | 26,063 | |||||
Net cash used in investing activities | (224,791 | ) | (18,396 | ) | (206,395 | ) | |||||
Net cash provided by (used in) financing activities | 91,371 | (121,017 | ) | 212,388 | |||||||
Effect of exchange rate changes on cash and cash equivalents | 24,815 | 4,355 | 20,460 | ||||||||
Change in cash and cash equivalents | $ | 76,042 | $ | 23,526 | $ | 52,516 |
• | Lower variable compensation payments in 2017 attributable to 2016 performance; |
• | Timing of payments associated with payroll, and the launch of our enterprise business platform and advertising campaigns in 2016; |
• | Lower restructuring and tax payments; and |
• | A special U.K. pension contribution of $37 million in 2016. |
• | Higher investment activities of $203 million, primarily due to the investment of residual proceeds from the issuance of debt; |
• | A 2016 sale of a building for $18 million; |
• | Higher capital expenditures of $5 million; partially offset by |
• | Lower acquisition/divestiture spending of $9 million; and an |
• | Increase in reserve deposits of $10 million. |
• | $195 million of share repurchases in 2016; and |
• | $9 million of dividends paid to non-controlling interests in 2016 |
Total Number of shares purchased | Average price paid per share | Total Number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may be purchased under the plans or programs (in thousands) | ||||||||
Beginning balance | 21,022 | ||||||||||
April 1, 2017 - April 30, 2017 | — | — | — | 21,022 | |||||||
May 1, 2017 - May 31, 2017 | — | — | — | 21,022 | |||||||
June 1, 2017 - June 30, 2017 | — | — | — | 21,022 | |||||||
— | — | — |
Exhibit Number | Description | Exhibit Number in this Form 10-Q | |
4.1 | Officer's Certificate establishing the terms of the 3.875% Notes due 2022, dated May 5, 2017 (incorporated by reference to Exhibit 4.1 to Form 8-K filed May 9, 2017) | 4.1 | |
4.2 | Specimen of 3.875% Notes due 2022 (incorporated by reference to exhibit 4.1 to Form 8-K filed May 9, 2017) | 4.2 | |
12 | Computation of ratio of earnings to fixed charges | 12 | |
31.1 | Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | 31.1 | |
31.2 | Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | 31.2 | |
32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 | 32.1 | |
32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 | 32.2 | |
101.INS | XBRL Report Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | ||
101.DEF | XBRL Taxonomy Definition Linkbase Document | ||
101.LAB | XBRL Taxonomy Label Linkbase Document | ||
101.PRE | XBRL Taxonomy Presentation Linkbase Document |
PITNEY BOWES INC. | ||
Date: | August 2, 2017 | |
/s/ Stanley J. Sutula III | ||
Stanley J. Sutula III | ||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||
/s/ Steven J. Green | ||
Steven J. Green | ||
Vice President – Finance and Chief Accounting Officer | ||
(Principal Accounting Officer) |
Exhibit Number | Description | Exhibit Number in this Form 10-Q | |
4.1 | Officer's Certificate establishing the terms of the 3.875% Notes due 2022, dated May 5, 2017 (incorporated by reference to Exhibit 4.1 to Form 8-K filed May 9, 2017) | 4.1 | |
4.2 | Specimen of 3.875% Notes due 2022 (incorporated by reference to exhibit 4.1 to Form 8-K filed May 9, 2017) | 4.2 | |
12 | Computation of ratio of earnings to fixed charges | 12 | |
31.1 | Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | 31.1 | |
31.2 | Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | 31.2 | |
32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 | 32.1 | |
32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 | 32.2 | |
101.INS | XBRL Report Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | ||
101.DEF | XBRL Taxonomy Definition Linkbase Document | ||
101.LAB | XBRL Taxonomy Label Linkbase Document | ||
101.PRE | XBRL Taxonomy Presentation Linkbase Document |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Income from continuing operations before income taxes | $ | 150,402 | $ | 192,902 | |||
Add: | |||||||
Interest expense | 81,661 | 70,651 | |||||
Portion of rent expense representative of the interest factor | 8,006 | 8,109 | |||||
Income as adjusted | $ | 240,069 | $ | 271,662 | |||
Fixed charges: | |||||||
Interest expense | $ | 81,661 | $ | 70,651 | |||
Portion of rent expense representative of the interest factor | 8,006 | 8,109 | |||||
Noncontrolling interests (preferred stock dividends of subsidiaries), excluding taxes | — | 14,927 | |||||
Total fixed charges | $ | 89,667 | $ | 93,687 | |||
Ratio of earnings to fixed charges | 2.68 | 2.90 | |||||
1. | I have reviewed this quarterly report on Form 10-Q of Pitney Bowes Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Marc B. Lautenbach | ||||
Marc B. Lautenbach | ||||
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Pitney Bowes Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Stanley J. Sutula III | |||
Stanley J. Sutula III | |||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Marc B. Lautenbach | |||
Marc B. Lautenbach | |||
President and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Stanley J. Sutula III | |||
Stanley J. Sutula III | |||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jul. 28, 2017 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | PITNEY BOWES INC /DE/ | |
Entity Central Index Key | 0000078814 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 186,681,977 |
Condensed Consolidated Statements of Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
||||
Revenue: | |||||||
Equipment sales | $ 158,625 | $ 152,641 | $ 321,599 | $ 312,002 | |||
Supplies | 63,228 | 65,274 | 130,046 | 137,325 | |||
Software | 86,664 | 90,615 | 164,531 | 168,673 | |||
Rentals | 95,999 | 102,869 | 195,869 | 206,959 | |||
Financing | 83,653 | 91,609 | 169,398 | 189,032 | |||
Support services | 115,299 | 131,418 | 234,146 | 259,678 | |||
Business services | 217,903 | 201,460 | 442,422 | 406,806 | |||
Total revenue | 821,371 | 835,886 | 1,658,011 | 1,680,475 | |||
Costs and expenses: | |||||||
Cost of equipment sales | 77,189 | 78,055 | 146,751 | 149,594 | |||
Cost of supplies | 19,909 | 19,624 | 41,380 | 40,314 | |||
Cost of software | 24,795 | 26,983 | 50,103 | 53,798 | |||
Cost of rentals | 21,576 | 18,415 | 42,238 | 38,910 | |||
Financing interest expense | 12,843 | 13,495 | 25,817 | 28,410 | |||
Cost of support services | 73,190 | 74,742 | 146,544 | 149,991 | |||
Cost of business services | 153,063 | 140,830 | 303,906 | 276,368 | |||
Selling, general and administrative | 297,468 | 289,116 | 603,771 | 615,998 | |||
Research and development | 32,958 | 34,513 | 64,814 | 61,081 | |||
Restructuring charges and asset impairments, net | 26,927 | 26,076 | 29,009 | 33,009 | |||
Interest expense, net | 27,600 | 20,799 | 53,276 | 40,100 | |||
Total costs and expenses | 767,518 | 742,648 | 1,507,609 | 1,487,573 | |||
Income before income taxes | 53,853 | 93,238 | 150,402 | 192,902 | |||
Provision for income taxes | 4,952 | 33,394 | 36,368 | 70,418 | |||
Income from continuing operations | 48,901 | 59,844 | 114,034 | 122,484 | |||
Loss from discontinued operations, net of tax | 0 | (1,660) | 0 | (1,660) | |||
Net income | 48,901 | 58,184 | 114,034 | 120,824 | |||
Less: Preferred stock dividends attributable to noncontrolling interests | 0 | 4,594 | 0 | 9,188 | |||
Net income attributable to Pitney Bowes Inc. | 48,901 | 53,590 | 114,034 | 111,636 | |||
Amounts attributable to common stockholders: | |||||||
Net income from continuing operations | 48,901 | 55,250 | 114,034 | 113,296 | |||
Loss from discontinued operations, net of tax | 0 | (1,660) | 0 | (1,660) | |||
Net income attributable to Pitney Bowes Inc. | $ 48,901 | $ 53,590 | $ 114,034 | $ 111,636 | |||
Basic earnings per share attributable to common stockholders | |||||||
Continuing operations (in dollars per share) | [1] | $ 0.26 | $ 0.29 | $ 0.61 | $ 0.60 | ||
Discontinued operations (in dollars per share) | [1] | 0.00 | (0.01) | 0.00 | (0.01) | ||
Net income attributable to Pitney Bowes Inc. (in dollars per share) | [1] | 0.26 | 0.29 | 0.61 | 0.59 | ||
Diluted earnings per share attributable to common stockholders | |||||||
Continuing operations (in dollars per share) | [1] | 0.26 | 0.29 | 0.61 | 0.59 | ||
Discontinued operations (in dollars per share) | [1] | 0.00 | (0.01) | 0.00 | (0.01) | ||
Net income attributable to Pitney Bowes Inc. (in dollars per share) | [1] | 0.26 | 0.28 | 0.61 | 0.59 | ||
Dividends declared per share of common stock (in dollars per share) | $ 0.1875 | $ 0.1875 | $ 0.3750 | $ 0.3750 | |||
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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
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Statement of Comprehensive Income [Abstract] | ||||
Net unrealized gain (loss) on cash flow hedges, tax | $ (120) | $ 281 | $ 235 | $ 264 |
Net unrealized gain on investment securities, tax | 758 | 1,415 | 1,102 | 3,443 |
Adjustments to pension and postretirement plans, tax | (304) | (777) | ||
Amortization of pension and postretirement costs, tax | $ 3,442 | $ 4,122 | $ 6,956 | $ 7,921 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
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Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 14,709 | $ 14,372 |
Short-term finance receivables allowance | 14,491 | 13,232 |
Long-term finance receivables allowance | $ 5,121 | $ 7,177 |
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 (in shares) | 480,000,000 | 480,000,000 |
Common stock, shares issued (in shares) | 323,337,912 | 323,337,912 |
Treasury stock (in shares) | 136,967,821 | 137,669,194 |
Description of Business and Basis of Presentation |
6 Months Ended |
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Jun. 30, 2017 | |
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. (we, us, our, or the company), was incorporated in the state of Delaware in 1920. We are a global technology company offering innovative products and solutions that help our clients navigate the complex world of commerce. We provide innovative products and solutions for mailing, shipping and cross border ecommerce that enable the sending of packages globally and products and solutions for customer information management, location intelligence and customer engagement to help our clients market to their customer. Clients around the world rely on our products, solutions and services. For more information about us, our products, services and solutions, visit www.pb.com. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared 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, 2016 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, 2017. 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, 2016 (2016 Annual Report). In the fourth quarter of 2016, we determined that certain investments were classified as cash and cash equivalents. Accordingly, the Condensed Consolidated Statement of Cash Flows for the period ended June 30, 2016 has been revised to reduce beginning cash and cash equivalents by $10 million and ending cash and cash equivalents by $12 million with a corresponding adjustment to net change in short-term and other investing activities. New Accounting Pronouncements - Standards Adopted in 2017 In January 2017, the Financial Accounting Standard Board (FASB) issued Accounting Standard Update (ASU) 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which eliminates Step 2 of the current two-step goodwill impairment test and requires only a one-step quantitative impairment test, whereby a goodwill impairment loss will be measured as the excess of a reporting unit’s carrying amount over its fair value (not to exceed the total goodwill allocated to that reporting unit). The ASU is effective for interim and annual periods beginning after December 15, 2019, and is required to be applied prospectively. We elected to early adopt this standard effective January 1, 2017. The adoption of this standard had no impact on our consolidated financial statements or disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The standard includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. We retroactively adopted this ASU effective January 1, 2017. Accordingly, the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2016 has been recast to increase both net cash provided by operating activities and net cash used in financing activities by $5 million. In July 2015, the FASB issued ASU 2015-11, Inventory - Simplifying the Measurement of Inventory, which requires inventory to be measured at the lower of cost and net realizable value (estimated selling price less reasonably predictable costs of completion, disposal and transportation). Inventory measured using the last-in, first-out (LIFO) basis is not impacted by the new guidance. This standard became effective January 1, 2017 and there was no impact on our consolidated financial statements or disclosures. New Accounting Pronouncements - Standards Not Yet Adopted In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting. The ASU provides guidance about which changes to terms and conditions of a share-based payment award require an entity to apply modification accounting. The standard is effective for interim and annual periods beginning after December 15, 2017 and would be applied prospectively to awards modified on or after the effective date. We do not expect the adoption of this standard will have any impact on our consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The ASU shortens the amortization period for certain callable debt securities held at a premium, requiring the premium to be amortized to the earliest call date. The standard will be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The standard is effective for interim and annual periods beginning after December 15, 2018 and early adoption is permitted. We are currently assessing the impact this standard will have on our consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Benefit Cost. The ASU requires the service cost component of net periodic benefit cost to be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period. Other components of the net periodic benefit cost are to be presented separately, in an appropriately titled line item outside of any subtotal of operating income or disclosed in the footnotes. The standard also limits the amount eligible for capitalization to the service cost component. The standard is effective for interim and annual periods beginning after December 15, 2017 and we are currently assessing the impact this standard will have on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-06 – Plan Accounting: Defined Benefit Pension Plans (Topic 960); Defined Contribution Pension Plans (Topic 962); Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting. The ASU requires separate disclosure in the statement of net assets available for benefits and the statement of changes in net assets available for benefits of changes in any interests held in a Master Trust and other enhanced disclosures. The standard is effective for interim and annual periods beginning after December 15, 2018 and we are currently evaluating the impact of this standard on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for interim and annual periods beginning after December 15, 2017. The impact on our consolidated financial statements will depend on the facts and circumstances of any specific future transactions. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes: Inter-entity Transfers of Assets other than Inventory, which requires tax expense to be recognized from the sale of intra-entity assets, other than inventory, when the transfer occurs, even though the effects of the transaction are eliminated in consolidation. Under current guidance, the tax effects of transfers are deferred until the transferred asset is sold or otherwise recovered through use. The standard is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted, including adoption during an interim period. We are currently assessing the impact this standard will have on our consolidated financial statements. In August, 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The ASU is intended to reduce diversity in practice in the presentation and classification of certain cash receipts and cash payments by providing guidance on eight specific cash flow issues. The ASU is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted, including adoption during an interim period. We are currently assessing the impact this standard will have on our consolidated statement of cash flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. The ASU sets forth a “current expected credit loss” (CECL) model which requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This standard is effective for interim and annual periods beginning after December 15, 2019. We are currently assessing the impact this standard will have on our consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases. This standard, among other things, will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability and result in enhanced disclosures. The standard is effective for interim and annual periods beginning after December 15, 2018 and early adoption is permitted. We are currently assessing the impact this standard will have on our consolidated financial statements and disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. This standard primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The standard is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. We are currently assessing the impact this standard will have on our consolidated financial statements and disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which 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. In addition, the standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue. There were several amendments to the standard during 2016, including clarification of the accounting for licenses of intellectual property and identifying performance obligations. The standard is effective beginning January 1, 2018 and can be adopted either retrospectively to each reporting period presented or on a modified retrospective basis with a cumulative effect adjustment at the date of the initial application. We plan to adopt the standard on the modified retrospective basis, with a cumulative effect adjustment. We have completed the majority of our assessment of all potential impacts of the standard. We do not expect a change in revenue recognition for the majority of our product and service offerings. However, we believe that the most likely changes will be in our Software Solutions segment related to the timing of software licenses and certain other ancillary revenue streams. In addition, we currently capitalize certain costs associated with the acquisition of new customers and recognize these costs over their expected revenue stream of eight years. Under the new standard, these costs will be expensed as incurred. Also, we have determined that certain sales commission plans will qualify for capitalization under the new standard. We plan to use the practical expedient that allows companies to expense costs to obtain a contract when the estimated amortization period is less than one year. We are in the process of drafting our accounting policies and evaluating the new disclosure requirements and expect to complete our evaluation of the impacts of the accounting and disclosure requirements on our business processes, controls and systems by the end of the year. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Effective January 1, 2017, we revised our segment reporting to reflect a change in how we manage and report office shipping solutions, which we previously reported within the Global Ecommerce segment. The needs of retail and ecommerce clients differ from those of office shipping clients. Accordingly, we now report the results for office shipping solutions within Small & Medium Business Solutions and the retail and ecommerce shipping solutions remain in Global Ecommerce. We have recast prior period results to conform to our current segment presentation. 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 mailing and office shipping solutions, financing services, and supplies for small and medium businesses to efficiently create physical and digital mail, evidence postage and help simplify and save on the sending, tracking and receiving of letters, parcels and flats in the U.S. and Canada. International Mailing: Includes the revenue and related expenses from mailing and office shipping solutions, financing services, and supplies for small and medium businesses to efficiently create physical and digital mail, evidence postage and help simplify and save on the sending, tracking and receiving of letters, parcels and flats 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 and parcel services for our large enterprise clients to qualify large mail and parcel volumes for postal worksharing discounts. Digital Commerce Solutions: Software Solutions: Includes the worldwide revenue and related expenses from the licensing of customer engagement, customer information and location intelligence software solutions and related support services. Global Ecommerce: Includes the worldwide revenue and related expenses from cross-border ecommerce transactions and domestic retail and ecommerce shipping solutions. We determine segment earnings before interest and taxes (EBIT) by deducting from segment revenue the related costs and expenses attributable to the segment. Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, and other items that are not allocated to a particular business segment. Management uses segment EBIT to measure profitability and performance at the segment level and believes that it provides a useful measure of 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:
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Earnings per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per Share The calculations of basic and diluted earnings per share are presented below. The sum of earnings per share amounts may not equal the totals due to rounding.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on the last-in, first-out (LIFO) basis for most U.S. inventories and the first-in, first-out (FIFO) basis for most non-U.S. inventories. Inventories at June 30, 2017 and December 31, 2016 consisted of the following:
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Finance Assets |
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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, 2017 and December 31, 2016 consisted of the following:
Allowance for Credit Losses We provide an allowance for probable 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. We continually evaluate the adequacy of the allowance for credit losses and make adjustments as necessary. The assumptions used in determining an estimate of credit losses are 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 loan receivables that are more than 90 days past due. We resume revenue recognition when the client's payments reduce the account aging to less than 60 days 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 low because of the geographic and industry diversification of our clients and small account balances for most of our clients. Activity in the allowance for credit losses for the six months ended June 30, 2017 and 2016 was as follows:
Aging of Receivables The aging of gross finance receivables at June 30, 2017 and December 31, 2016 was as follows:
As of June 30, 2017, we had North America sales-type lease receivables aged greater than 90 days with a contract value of $56 million. As of August 1, 2017, we received payments with a contract value of approximately $26 million related to these receivables.
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, 2017 and December 31, 2016 by relative risk class 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 (low, medium, high), as defined by the third party, refers to the relative risk that an account in the next 12 month period may become delinquent.
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Intangible Assets and Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets Intangible assets at June 30, 2017 and December 31, 2016 consisted of the following:
Amortization expense was $8 million and $11 million for the three months ended June 30, 2017 and 2016, respectively and $17 million and $21 million for the six months ended June 30, 2017 and 2016, respectively. Future amortization expense as of June 30, 2017 was as follows:
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 Changes in the carrying value of goodwill, by reporting segment, for the six months ended June 30, 2017 are shown in the table below. Prior year amounts have been recast for the change in reportable segments.
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Fair Value Measurements and Derivative Instruments |
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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:
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. 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, 2017 and December 31, 2016.
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:
Investment securities include investments held by The Pitney Bowes Bank (the Bank), whose primary business is to provide financing solutions to clients that rent postage meters and purchase supplies. The Bank's assets and liabilities consist primarily of cash, finance receivables, short and long-term investments and deposit accounts. Available-For-Sale Securities Certain investment securities are classified as available-for-sale and recorded at fair value in the 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 income (AOCI). Available-for-sale securities at June 30, 2017 and December 31, 2016 consisted of the following:
At June 30, 2017, investment securities that were in a loss position for 12 or more continuous months had aggregate unrealized holding losses of less than $1 million and an estimated fair value of $24 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 $132 million. At December 31, 2016, investment securities that were in a loss position for 12 or more continuous months had aggregate unrealized holding losses of less than $1 million and an estimated fair value of $12 million, and investment securities that were in a loss position for less than 12 continuous months had aggregate unrealized holding losses of $4 million and an estimated fair value of $171 million. We have not recognized an other-than-temporary impairment on any of the investment securities in an unrealized loss position because we have the ability and intent to hold these securities until recovery of the unrealized losses and we expect to receive the contractual principal and interest on these investment securities at maturity. Scheduled maturities of available-for-sale securities at June 30, 2017 were as follows:
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. 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 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. 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 AOCI 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, 2017 and December 31, 2016, we had outstanding contracts associated with these anticipated transactions with notional amounts of $9 million and $13 million, respectively. 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. We have not seen a material change in the creditworthiness of those banks acting as derivative counterparties. Interest Rate Swap We entered into an interest rate swap with a notional amount of $300 million to mitigate the interest rate risk associated with our $300 million variable-rate term loans. The swap is designated as a cash flow hedge. The effective portion of the gain or loss on the cash flow hedge is included in AOCI 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. Under the terms of the swap agreement, we pay fixed-rate interest of 0.8826% and receive variable-rate interest based on 1-month LIBOR. The variable interest rate resets monthly. The valuation of our interest rate swap is based on the income approach using a model with inputs that are observable or that can be derived from or corroborated by observable market data. The fair value of derivative instruments at June 30, 2017 and December 31, 2016 was as follows:
The majority of the amounts included in AOCI at June 30, 2017 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, 2017 and 2016:
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, 2017 mature within 12 months. The following represents the results of our non-designated derivative instruments for the three and six months ended June 30, 2017 and 2016:
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, 2017, we did not post any collateral and the maximum amount of collateral that we would have been required to post had the credit-risk-related contingent features been triggered was not significant. 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. The 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, 2017 and December 31, 2016 were as follows:
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Restructuring Charges and Asset Impairments |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges and Asset Impairments | Restructuring Charges and Asset Impairments Restructuring Charges Activity in our restructuring reserves for the six months ended June 30, 2017 and 2016 was as follows:
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 Impairments During the six months ended June 30, 2017, we recorded asset impairment charges of $4 million. During the second quarter of 2016, we sold a facility for $18 million and recorded a pre-tax loss on the sale of $5 million. Additionally, we recorded other asset impairment charges of $3 million relating to a building. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Total debt at June 30, 2017 and December 31, 2016 consisted of the following:
In May 2017, we issued $400 million of 3.875% fixed rate notes. Interest is payable semi-annually, commencing November 15, 2017 and is subject to adjustment from time to time if either Moody's or S&P (or a substitute ratings agency) downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the notes. The notes mature in May 2022, but may be redeemed, at our option, in whole or in part, at any time or from time to time at par plus accrued, unpaid interest and a make-whole amount, if any. The proceeds were used to repay the $150 million term loan due in June 2017 and the remainder, together with cash on hand and other financing options, will be used to repay a portion of the $385 million notes due September 2017. In January 2017, bondholders of the 5.25% Notes due 2037 caused us to redeem $79 million of the debt outstanding. |
Pensions and Other Benefit Programs |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pensions and Other Benefit Programs | Pensions and Other Benefit Programs The components of net periodic benefit cost (income) were as follows:
(1) Included in restructuring charges and asset impairments, net in the Condensed Consolidated Statements of Income. Through June 30, 2017 and 2016, contributions to our U.S. pension plans were $3 million and $7 million, respectively, and contributions to our foreign plans were $10 million and $39 million, respectively. Nonpension postretirement benefit plan contributions were $9 million and $8 million through June 30, 2017 and June 30, 2016, respectively. |
Income Taxes |
6 Months Ended |
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Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate for the three months ended June 30, 2017 and 2016 was 9.2% and 35.8%, respectively, and the effective tax rate for the six months ended June 30, 2017 and 2016 was 24.2% and 36.5%, respectively. The effective tax rate for the six months ended June 30, 2017 and 2016 includes a $4 million and $3 million charge, respectively, 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. The effective tax rate for the three and six months ended June 30, 2017 includes a $10 million and $14 million benefit, respectively, from the resolution of tax examinations. As is the case with other large corporations, our tax returns are examined each year by tax authorities in the U.S. and other global taxing jurisdictions in which we have operations. As a result, it is reasonably possible that the amount of our unrecognized tax benefits will decrease in the next 12 months, and we expect this change could be up to 15% of our unrecognized tax benefits. The IRS examinations of our consolidated U.S. income tax returns for tax years prior to 2012 are closed to audit; however, various post-2006 U.S. state and local tax returns are still subject to examination. In Canada, the examination of our tax filings prior to 2012 are closed to audit, except for the pending application of legal principles to specific issues arising in earlier years. Other significant jurisdictions include France, which is closed to audit through the end of 2012, Germany, which is closed to audit through the end of 2011 and the U.K., which, except for an item under appeal, is closed to audit through the end of 2011. We have other less significant tax filings currently subject to examination. |
Commitments and Contingencies |
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Jun. 30, 2017 | |
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. |
Stockholders’ Equity (Deficit) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ Equity (Deficit) | Stockholders’ Equity (Deficit) Changes in stockholders’ equity (deficit) for the six months ended June 30, 2017 and 2016 were as follows:
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Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Reclassifications out of AOCI for the three and six months ended June 30, 2017 and 2016 were as follows:
(a) Amounts in parentheses indicate reductions to income and increases to other comprehensive income (loss).
Changes in AOCI for the six months ended June 30, 2017 and 2016 were as follows:
(a) Amounts are net of tax. Amounts in parentheses indicate debits to AOCI. (b) See table above for additional details of these reclassifications. |
Description of Business and Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements - Standards Adopted in 2017 In January 2017, the Financial Accounting Standard Board (FASB) issued Accounting Standard Update (ASU) 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which eliminates Step 2 of the current two-step goodwill impairment test and requires only a one-step quantitative impairment test, whereby a goodwill impairment loss will be measured as the excess of a reporting unit’s carrying amount over its fair value (not to exceed the total goodwill allocated to that reporting unit). The ASU is effective for interim and annual periods beginning after December 15, 2019, and is required to be applied prospectively. We elected to early adopt this standard effective January 1, 2017. The adoption of this standard had no impact on our consolidated financial statements or disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The standard includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. We retroactively adopted this ASU effective January 1, 2017. Accordingly, the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2016 has been recast to increase both net cash provided by operating activities and net cash used in financing activities by $5 million. In July 2015, the FASB issued ASU 2015-11, Inventory - Simplifying the Measurement of Inventory, which requires inventory to be measured at the lower of cost and net realizable value (estimated selling price less reasonably predictable costs of completion, disposal and transportation). Inventory measured using the last-in, first-out (LIFO) basis is not impacted by the new guidance. This standard became effective January 1, 2017 and there was no impact on our consolidated financial statements or disclosures. New Accounting Pronouncements - Standards Not Yet Adopted In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting. The ASU provides guidance about which changes to terms and conditions of a share-based payment award require an entity to apply modification accounting. The standard is effective for interim and annual periods beginning after December 15, 2017 and would be applied prospectively to awards modified on or after the effective date. We do not expect the adoption of this standard will have any impact on our consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The ASU shortens the amortization period for certain callable debt securities held at a premium, requiring the premium to be amortized to the earliest call date. The standard will be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The standard is effective for interim and annual periods beginning after December 15, 2018 and early adoption is permitted. We are currently assessing the impact this standard will have on our consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Benefit Cost. The ASU requires the service cost component of net periodic benefit cost to be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period. Other components of the net periodic benefit cost are to be presented separately, in an appropriately titled line item outside of any subtotal of operating income or disclosed in the footnotes. The standard also limits the amount eligible for capitalization to the service cost component. The standard is effective for interim and annual periods beginning after December 15, 2017 and we are currently assessing the impact this standard will have on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-06 – Plan Accounting: Defined Benefit Pension Plans (Topic 960); Defined Contribution Pension Plans (Topic 962); Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting. The ASU requires separate disclosure in the statement of net assets available for benefits and the statement of changes in net assets available for benefits of changes in any interests held in a Master Trust and other enhanced disclosures. The standard is effective for interim and annual periods beginning after December 15, 2018 and we are currently evaluating the impact of this standard on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for interim and annual periods beginning after December 15, 2017. The impact on our consolidated financial statements will depend on the facts and circumstances of any specific future transactions. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes: Inter-entity Transfers of Assets other than Inventory, which requires tax expense to be recognized from the sale of intra-entity assets, other than inventory, when the transfer occurs, even though the effects of the transaction are eliminated in consolidation. Under current guidance, the tax effects of transfers are deferred until the transferred asset is sold or otherwise recovered through use. The standard is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted, including adoption during an interim period. We are currently assessing the impact this standard will have on our consolidated financial statements. In August, 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The ASU is intended to reduce diversity in practice in the presentation and classification of certain cash receipts and cash payments by providing guidance on eight specific cash flow issues. The ASU is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted, including adoption during an interim period. We are currently assessing the impact this standard will have on our consolidated statement of cash flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. The ASU sets forth a “current expected credit loss” (CECL) model which requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This standard is effective for interim and annual periods beginning after December 15, 2019. We are currently assessing the impact this standard will have on our consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases. This standard, among other things, will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability and result in enhanced disclosures. The standard is effective for interim and annual periods beginning after December 15, 2018 and early adoption is permitted. We are currently assessing the impact this standard will have on our consolidated financial statements and disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. This standard primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The standard is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. We are currently assessing the impact this standard will have on our consolidated financial statements and disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which 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. In addition, the standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue. There were several amendments to the standard during 2016, including clarification of the accounting for licenses of intellectual property and identifying performance obligations. The standard is effective beginning January 1, 2018 and can be adopted either retrospectively to each reporting period presented or on a modified retrospective basis with a cumulative effect adjustment at the date of the initial application. We plan to adopt the standard on the modified retrospective basis, with a cumulative effect adjustment. We have completed the majority of our assessment of all potential impacts of the standard. We do not expect a change in revenue recognition for the majority of our product and service offerings. However, we believe that the most likely changes will be in our Software Solutions segment related to the timing of software licenses and certain other ancillary revenue streams. In addition, we currently capitalize certain costs associated with the acquisition of new customers and recognize these costs over their expected revenue stream of eight years. Under the new standard, these costs will be expensed as incurred. Also, we have determined that certain sales commission plans will qualify for capitalization under the new standard. We plan to use the practical expedient that allows companies to expense costs to obtain a contract when the estimated amortization period is less than one year. We are in the process of drafting our accounting policies and evaluating the new disclosure requirements and expect to complete our evaluation of the impacts of the accounting and disclosure requirements on our business processes, controls and systems by the end of the year. |
Segment Information (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Revenue from Segments to Consolidated Statements | Revenue and EBIT by business segment is presented below:
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Reconciliation of EBIT from Segments to Consolidated |
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Earnings per Share (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. The sum of earnings per share amounts may not equal the totals due to rounding.
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Components | Inventories at June 30, 2017 and December 31, 2016 consisted of the following:
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Finance Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Receivables | Finance receivables at June 30, 2017 and December 31, 2016 consisted of the following:
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Allowance for Credit Losses on Financing Receivables | Activity in the allowance for credit losses for the six months ended June 30, 2017 and 2016 was as follows:
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Past Due Financing Receivables | The aging of gross finance receivables at June 30, 2017 and December 31, 2016 was as follows:
As of June 30, 2017, we had North America sales-type lease receivables aged greater than 90 days with a contract value of $56 million. As of August 1, 2017, we received payments with a contract value of approximately $26 million related to these receivables.
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Financing Receivable Credit Quality Indicators |
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Intangible Assets and Goodwill (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Disclosure | Intangible assets at June 30, 2017 and December 31, 2016 consisted of the following:
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Amortization Expense In Future Periods | Future amortization expense as of June 30, 2017 was as follows:
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Schedule of Goodwill | Changes in the carrying value of goodwill, by reporting segment, for the six months ended June 30, 2017 are shown in the table below. Prior year amounts have been recast for the change in reportable segments.
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Fair Value Measurements and Derivative Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2017 and December 31, 2016.
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Schedule of Available-for-sale Securities Reconciliation | Available-for-sale securities at June 30, 2017 and December 31, 2016 consisted of the following:
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Available-for-sale Securities | Scheduled maturities of available-for-sale securities at June 30, 2017 were as follows:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of derivative instruments at June 30, 2017 and December 31, 2016 was as follows:
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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, 2017 and 2016:
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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, 2017 and 2016:
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Fair Value, by Balance Sheet Grouping | The carrying value and estimated fair value of our debt at June 30, 2017 and December 31, 2016 were as follows:
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Restructuring Charges and Asset Impairments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | Activity in our restructuring reserves for the six months ended June 30, 2017 and 2016 was as follows:
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Total debt at June 30, 2017 and December 31, 2016 consisted of the following:
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Pensions and Other Benefit Programs (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plans Disclosures | The components of net periodic benefit cost (income) were as follows:
(1) Included in restructuring charges and asset impairments, net in the Condensed Consolidated Statements of Income. |
Stockholders’ Equity (Deficit) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity | Changes in stockholders’ equity (deficit) for the six months ended June 30, 2017 and 2016 were as follows:
|
Accumulated Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification out of Accumulated Other Comprehensive Income | Reclassifications out of AOCI for the three and six months ended June 30, 2017 and 2016 were as follows:
(a) Amounts in parentheses indicate reductions to income and increases to other comprehensive income (loss).
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Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in AOCI for the six months ended June 30, 2017 and 2016 were as follows:
(a) Amounts are net of tax. Amounts in parentheses indicate debits to AOCI. (b) See table above for additional details of these reclassifications. |
Description of Business and Basis of Presentation (Details) - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Reduction to cash and cash equivalents | $ (840,564) | $ (663,716) | $ (764,522) | $ (640,190) |
Increase (decrease) in net cash provided by operating activities | 184,647 | 158,584 | ||
Increase (decrease) in net cash used in financing activities | $ 91,371 | (121,017) | ||
Capitalization period | 8 years | |||
Estimated amortization period, less than | 1 year | |||
Accounting Standards Update 2016-09 | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Increase (decrease) in net cash provided by operating activities | 5,000 | |||
Increase (decrease) in net cash used in financing activities | (5,000) | |||
Restatement Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Reduction to cash and cash equivalents | $ 12,000 | $ 10,000 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 38,322 | $ 28,541 |
Work in process | 10,541 | 6,498 |
Supplies and service parts | 53,265 | 45,152 |
Finished products | 31,493 | 24,678 |
Inventory at FIFO cost | 133,621 | 104,869 |
Excess of FIFO cost over LIFO cost | (12,143) | (12,143) |
Total inventory, net | $ 121,478 | $ 92,726 |
Finance Assets (Details) - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Aug. 01, 2017 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Finance receivables: | ||||
Net investment in finance receivables | $ 1,520,148 | $ 1,567,157 | ||
Revenue recognition resume period (less than) | 60 days | |||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance Beginning | $ 20,500 | $ 21,690 | ||
Amounts charged to expense | 8,989 | 5,236 | ||
Write-offs and other | (9,877) | (8,182) | ||
Balance Closing | 19,612 | 18,744 | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Total | $ 1,725,947 | 1,768,178 | ||
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% | |||
1 - 90 days | ||||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Financing receivables | $ 1,657,295 | 1,693,706 | ||
Greater than 90 days | ||||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Financing receivables | 68,652 | 74,472 | ||
Still accruing interest | 9,062 | 9,803 | ||
Not accruing interest | $ 59,590 | 64,669 | ||
Minimum | ||||
Finance Leases And Loans Receivables [Line Items] | ||||
Lease period | 3 years | |||
Maximum | ||||
Finance Leases And Loans Receivables [Line Items] | ||||
Lease period | 5 years | |||
North America | ||||
Finance receivables: | ||||
Net investment in finance receivables | $ 1,258,504 | 1,311,718 | ||
International | ||||
Finance receivables: | ||||
Net investment in finance receivables | 261,644 | 255,439 | ||
Sales-type lease receivables | ||||
Finance receivables: | ||||
Gross finance receivables | 1,338,683 | 1,361,315 | ||
Unguaranteed residual values | 96,664 | 103,845 | ||
Unearned income | (282,851) | (284,366) | ||
Allowance for credit losses | (10,952) | (10,894) | ||
Net investment in receivables | $ 1,141,544 | 1,169,900 | ||
Revenue recognition discontinuation period (more than) | 120 days | |||
Sales-type lease receivables | North America | ||||
Finance receivables: | ||||
Gross finance receivables | $ 1,061,888 | 1,088,053 | ||
Unguaranteed residual values | 82,581 | 90,190 | ||
Unearned income | (221,083) | (223,908) | ||
Allowance for credit losses | (8,456) | (8,247) | ||
Net investment in receivables | 914,930 | 946,088 | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance Beginning | 8,247 | 6,606 | ||
Amounts charged to expense | 5,182 | 1,895 | ||
Write-offs and other | (4,973) | (2,784) | ||
Balance Closing | 8,456 | 5,717 | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Total | 1,061,888 | 1,088,053 | ||
Sales-type lease receivables | North America | Low | ||||
Finance receivables: | ||||
Gross finance receivables | 837,486 | 879,823 | ||
Sales-type lease receivables | North America | Medium | ||||
Finance receivables: | ||||
Gross finance receivables | 152,362 | 135,953 | ||
Sales-type lease receivables | North America | High | ||||
Finance receivables: | ||||
Gross finance receivables | 21,767 | 22,600 | ||
Sales-type lease receivables | North America | Not Scored | ||||
Finance receivables: | ||||
Gross finance receivables | 50,273 | 49,677 | ||
Sales-type lease receivables | North America | 1 - 90 days | ||||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Financing receivables | 1,006,333 | 1,025,313 | ||
Sales-type lease receivables | North America | Greater than 90 days | ||||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Financing receivables | 55,555 | 62,740 | ||
Still accruing interest | 7,484 | 8,831 | ||
Not accruing interest | 48,071 | 53,909 | ||
Sales-type lease receivables | North America | Subsequent Event | ||||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Payment contract value | $ 26,000 | |||
Sales-type lease receivables | International | ||||
Finance receivables: | ||||
Gross finance receivables | 276,795 | 273,262 | ||
Unguaranteed residual values | 14,083 | 13,655 | ||
Unearned income | (61,768) | (60,458) | ||
Allowance for credit losses | (2,496) | (2,647) | ||
Net investment in receivables | 226,614 | 223,812 | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance Beginning | 2,647 | 3,542 | ||
Amounts charged to expense | 466 | 186 | ||
Write-offs and other | (617) | (1,031) | ||
Balance Closing | 2,496 | 2,697 | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Total | 276,795 | 273,262 | ||
Sales-type lease receivables | International | 1 - 90 days | ||||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Financing receivables | 271,713 | 269,247 | ||
Sales-type lease receivables | International | Greater than 90 days | ||||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Financing receivables | 5,082 | 4,015 | ||
Still accruing interest | 1,578 | 972 | ||
Not accruing interest | 3,504 | 3,043 | ||
Loan receivables | ||||
Finance receivables: | ||||
Gross finance receivables | 387,264 | 406,863 | ||
Allowance for credit losses | (8,660) | (9,606) | ||
Net investment in receivables | $ 378,604 | 397,257 | ||
Revenue recognition discontinuation period (more than) | 90 days | |||
Loan receivables | North America | ||||
Finance receivables: | ||||
Gross finance receivables | $ 351,077 | 374,147 | ||
Allowance for credit losses | (7,503) | (8,517) | ||
Net investment in receivables | 343,574 | 365,630 | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance Beginning | 8,517 | 10,024 | ||
Amounts charged to expense | 2,891 | 2,765 | ||
Write-offs and other | (3,905) | (3,798) | ||
Balance Closing | 7,503 | 8,991 | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Total | 351,077 | 374,147 | ||
Loan receivables | North America | Low | ||||
Finance receivables: | ||||
Gross finance receivables | 272,022 | 296,598 | ||
Loan receivables | North America | Medium | ||||
Finance receivables: | ||||
Gross finance receivables | 55,493 | 53,647 | ||
Loan receivables | North America | High | ||||
Finance receivables: | ||||
Gross finance receivables | 6,672 | 7,216 | ||
Loan receivables | North America | Not Scored | ||||
Finance receivables: | ||||
Gross finance receivables | 16,890 | 16,686 | ||
Loan receivables | North America | 1 - 90 days | ||||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Financing receivables | 343,205 | 366,726 | ||
Loan receivables | North America | Greater than 90 days | ||||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Financing receivables | 7,872 | 7,421 | ||
Still accruing interest | 0 | 0 | ||
Not accruing interest | 7,872 | 7,421 | ||
Loan receivables | International | ||||
Finance receivables: | ||||
Gross finance receivables | 36,187 | 32,716 | ||
Allowance for credit losses | (1,157) | (1,089) | ||
Net investment in receivables | 35,030 | 31,627 | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance Beginning | 1,089 | 1,518 | ||
Amounts charged to expense | 450 | 390 | ||
Write-offs and other | (382) | (569) | ||
Balance Closing | 1,157 | $ 1,339 | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Total | 36,187 | 32,716 | ||
Loan receivables | International | 1 - 90 days | ||||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Financing receivables | 36,044 | 32,420 | ||
Loan receivables | International | Greater than 90 days | ||||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||||
Financing receivables | 143 | 296 | ||
Still accruing interest | 0 | 0 | ||
Not accruing interest | $ 143 | $ 296 |
Intangible Assets and Goodwill (Intangible Assets) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Finite lived intangible assets | |||||
Gross Carrying Amount | $ 642,184 | $ 642,184 | $ 631,288 | ||
Accumulated Amortization | (490,165) | (490,165) | (466,116) | ||
Net Carrying Amount | 152,019 | 152,019 | 165,172 | ||
Amortization expense | 8,000 | $ 11,000 | 17,000 | $ 21,000 | |
Customer relationships | |||||
Finite lived intangible assets | |||||
Gross Carrying Amount | 452,614 | 452,614 | 445,039 | ||
Accumulated Amortization | (319,812) | (319,812) | (300,906) | ||
Net Carrying Amount | 132,802 | 132,802 | 144,133 | ||
Software & technology | |||||
Finite lived intangible assets | |||||
Gross Carrying Amount | 152,589 | 152,589 | 150,037 | ||
Accumulated Amortization | (139,947) | (139,947) | (136,508) | ||
Net Carrying Amount | 12,642 | 12,642 | 13,529 | ||
Trademarks & other | |||||
Finite lived intangible assets | |||||
Gross Carrying Amount | 36,981 | 36,981 | 36,212 | ||
Accumulated Amortization | (30,406) | (30,406) | (28,702) | ||
Net Carrying Amount | $ 6,575 | $ 6,575 | $ 7,510 |
Intangible Assets and Goodwill (Future Amortization Expense) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Finite lived intangible assets future amortization expense | ||
Remaining for year ending December 31, 2017 | $ 14,245 | |
Year ending December 31, 2018 | 27,632 | |
Year ending December 31, 2019 | 24,260 | |
Year ending December 31, 2020 | 19,126 | |
Year ending December 31, 2021 | 15,401 | |
Thereafter | 51,355 | |
Net Carrying Amount | $ 152,019 | $ 165,172 |
Intangible Assets and Goodwill (Goodwill) (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2017
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill | $ 1,571,335 |
Acquisitions | 6,229 |
Foreign currency translation | 26,756 |
Goodwill | 1,604,320 |
North America Mailing | |
Goodwill [Roll Forward] | |
Goodwill | 354,000 |
Acquisitions | 0 |
Foreign currency translation | 9,095 |
Goodwill | 363,095 |
Production Mail | |
Goodwill [Roll Forward] | |
Goodwill | 101,099 |
Acquisitions | 0 |
Foreign currency translation | 3,963 |
Goodwill | 105,062 |
International Mailing | |
Goodwill [Roll Forward] | |
Goodwill | 145,566 |
Acquisitions | 0 |
Foreign currency translation | 8,085 |
Goodwill | 153,651 |
Presort Services | |
Goodwill [Roll Forward] | |
Goodwill | 196,890 |
Acquisitions | 6,229 |
Foreign currency translation | 0 |
Goodwill | 203,119 |
Software Solutions | |
Goodwill [Roll Forward] | |
Goodwill | 501,591 |
Acquisitions | 0 |
Foreign currency translation | 5,613 |
Goodwill | 507,204 |
Global Ecommerce | |
Goodwill [Roll Forward] | |
Goodwill | 272,189 |
Acquisitions | 0 |
Foreign currency translation | 0 |
Goodwill | 272,189 |
Small & Medium Business Solutions | |
Goodwill [Roll Forward] | |
Goodwill | 499,566 |
Acquisitions | 0 |
Foreign currency translation | 17,180 |
Goodwill | 516,746 |
Enterprise Business Solutions | |
Goodwill [Roll Forward] | |
Goodwill | 297,989 |
Acquisitions | 6,229 |
Foreign currency translation | 3,963 |
Goodwill | 308,181 |
Digital Commerce Solutions | |
Goodwill [Roll Forward] | |
Goodwill | 773,780 |
Acquisitions | 0 |
Foreign currency translation | 5,613 |
Goodwill | $ 779,393 |
Fair Value Measurements and Derivative Instruments (Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 1,055,748 | $ 747,177 |
Liabilities | (539) | (3,717) |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 286,435 | 232,829 |
Liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 769,313 | 514,348 |
Liabilities | (539) | (3,717) |
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 | 633,993 | 331,646 |
Money market funds / commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 169,023 | 114,471 |
Money market funds / commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 464,970 | 217,175 |
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 | 24,186 | 24,571 |
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 | 24,186 | 24,571 |
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 | 23,431 | 23,668 |
Commingled fixed income securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,560 | 1,536 |
Commingled fixed income securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 21,871 | 22,132 |
Commingled fixed income securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Debt securities - U.S. and foreign governments, agencies and municipalities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 132,498 | 136,180 |
Debt securities - U.S. and foreign governments, agencies and municipalities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 115,852 | 116,822 |
Debt securities - U.S. and foreign governments, agencies and municipalities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 16,646 | 19,358 |
Debt securities - U.S. and foreign governments, agencies and municipalities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Debt securities - corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 77,352 | 69,891 |
Debt securities - corporate | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Debt securities - corporate | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 77,352 | 69,891 |
Debt securities - corporate | 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 | 162,081 | 158,996 |
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 | 162,081 | 158,996 |
Mortgage-backed / asset-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,909 | 1,588 |
Interest rate swap | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Interest rate swap | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,909 | 1,588 |
Interest rate swap | 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 | 298 | 637 |
Liabilities | (539) | (3,717) |
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 | 298 | 637 |
Liabilities | (539) | (3,717) |
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 Derivative Instruments (Available-for-sale Securities) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized cost | $ 363,187 | $ 366,572 |
Gross unrealized gains | 5,697 | 4,317 |
Gross unrealized losses | (2,790) | (4,286) |
Estimated fair value | 366,094 | 366,603 |
U.S. and foreign governments, agencies and municipalities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized cost | 124,051 | 136,316 |
Gross unrealized gains | 2,142 | 1,571 |
Gross unrealized losses | (1,092) | (1,707) |
Estimated fair value | 125,101 | 136,180 |
Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized cost | 75,876 | 69,376 |
Gross unrealized gains | 1,779 | 1,180 |
Gross unrealized losses | (303) | (665) |
Estimated fair value | 77,352 | 69,891 |
Commingled fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized cost | 1,584 | 1,568 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (24) | (32) |
Estimated fair value | 1,560 | 1,536 |
Mortgage-backed / asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized cost | 161,676 | 159,312 |
Gross unrealized gains | 1,776 | 1,566 |
Gross unrealized losses | (1,371) | (1,882) |
Estimated fair value | $ 162,081 | $ 158,996 |
Fair Value Measurements and Derivative Instruments (Narrative) (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Derivative [Line Items] | ||
Investment securities at a loss position for more than 12 months, aggregate unrealized holding losses (less than) | $ 1,000,000 | $ 1,000,000 |
Investment securities at a loss position for more than 12 months, estimated fair value | 24,000,000 | 12,000,000 |
Investment securities at a loss position for less than 12 months, aggregate unrealized holding losses | 2,000,000 | 4,000,000 |
Investment securities at a loss position for less than 12 months, estimated fair value | 132,000,000 | 171,000,000 |
Amount of ineffectiveness | 0 | |
Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative notional amount | 9,000,000 | $ 13,000,000 |
Term Loan | Notes due December 2020 | ||
Derivative [Line Items] | ||
Loan amount | 300,000,000 | |
Cash Flow Hedge | Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative notional amount | $ 300,000,000 | |
Fixed interest rate | 0.8826% |
Fair Value Measurements and Derivative Instruments (Available-for-sale Securities Maturities) (Details) $ in Thousands |
Jun. 30, 2017
USD ($)
|
---|---|
Amortized cost | |
Within 1 year | $ 24,079 |
After 1 year through 5 years | 116,356 |
After 5 years through 10 years | 65,193 |
After 10 years | 157,559 |
Total | 363,187 |
Estimated fair value | |
Within 1 year | 24,146 |
After 1 year through 5 years | 116,910 |
After 5 years through 10 years | 65,864 |
After 10 years | 159,174 |
Total | $ 366,094 |
Fair Value Measurements and Derivative Instruments (Derivative Instruments) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Derivative [Line Items] | ||
Total net derivative asset (liabilities) | $ 1,668 | $ (1,492) |
Total derivative assets | ||
Derivative [Line Items] | ||
Total net derivative asset (liabilities) | 2,207 | 2,225 |
Total derivative liabilities | ||
Derivative [Line Items] | ||
Total net derivative asset (liabilities) | (539) | (3,717) |
Foreign exchange contracts | Derivatives designated as hedging instruments | Other current assets and prepayments | ||
Derivative [Line Items] | ||
Total net derivative asset (liabilities) | 50 | 487 |
Foreign exchange contracts | Derivatives designated as hedging instruments | Accounts payable and accrued liabilities | ||
Derivative [Line Items] | ||
Total net derivative asset (liabilities) | (401) | (136) |
Foreign exchange contracts | Derivatives not designated as hedging instruments | Other current assets and prepayments | ||
Derivative [Line Items] | ||
Total net derivative asset (liabilities) | 248 | 150 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | Accounts payable and accrued liabilities | ||
Derivative [Line Items] | ||
Total net derivative asset (liabilities) | (138) | (3,581) |
Interest rate swap | Derivatives designated as hedging instruments | Other current assets and prepayments | ||
Derivative [Line Items] | ||
Total net derivative asset (liabilities) | $ 1,909 | $ 1,588 |
Fair Value Measurements and Derivative Instruments (Foreign Exchange Contracts) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Derivative [Line Items] | ||||
Derivative Gain (Loss) Recognized in AOCI (Effective Portion) | $ (746) | $ 437 | $ (228) | $ 45 |
Gain (Loss) Reclassified from AOCI to Earnings (Effective Portion) | 70 | (208) | 154 | (363) |
Revenue | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCI to Earnings (Effective Portion) | 34 | (353) | 6 | (733) |
Cost of sales | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCI to Earnings (Effective Portion) | 36 | 145 | 148 | 370 |
Interest Expense | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCI to Earnings (Effective Portion) | 0 | 0 | 0 | 0 |
Foreign exchange contracts | ||||
Derivative [Line Items] | ||||
Derivative Gain (Loss) Recognized in AOCI (Effective Portion) | (599) | 437 | (549) | 45 |
Foreign exchange contracts | Selling, general and administrative expense | ||||
Derivative [Line Items] | ||||
Derivative Gain (Loss) Recognized in Earnings | 789 | 4,580 | (1,061) | (1,397) |
Interest rate swap | ||||
Derivative [Line Items] | ||||
Derivative Gain (Loss) Recognized in AOCI (Effective Portion) | $ (147) | $ 0 | $ 321 | $ 0 |
Fair Value Measurements and Derivative Instruments (Fair Value of Debt) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Carrying value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | $ 3,528,767 | $ 3,364,890 |
Fair value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | $ 3,616,922 | $ 3,412,581 |
Restructuring Charges and Asset Impairments (Restructuring Charges) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Restructuring Costs | ||
Balance Beginning | $ 28,657 | $ 47,422 |
Expenses, net | 25,419 | 22,721 |
Cash payments | (19,016) | (33,866) |
Balance Ending | $ 35,060 | 36,277 |
Restructuring reserve, expected international payment period, extend beyond | 24 months | |
Minimum | ||
Restructuring Costs | ||
Restructuring reserve, expected payment period | 12 months | |
Maximum | ||
Restructuring Costs | ||
Restructuring reserve, expected payment period | 24 months | |
Severance and benefits costs | ||
Restructuring Costs | ||
Balance Beginning | $ 28,376 | 43,700 |
Expenses, net | 23,859 | 21,399 |
Cash payments | (18,519) | (30,969) |
Balance Ending | 33,716 | 34,130 |
Other exit costs | ||
Restructuring Costs | ||
Balance Beginning | 281 | 3,722 |
Expenses, net | 1,560 | 1,322 |
Cash payments | (497) | (2,897) |
Balance Ending | $ 1,344 | $ 2,147 |
Restructuring Charges and Asset Impairments (Asset Impairments) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2017 |
|
Restructuring and Related Activities [Abstract] | ||
Asset impairment charges | $ 4 | |
Proceeds from sale of facility | $ 18 | |
Loss on sale of building | 5 | |
Other asset impairment charges | $ 3 |
Debt (Details) - USD ($) |
1 Months Ended | |||
---|---|---|---|---|
May 31, 2017 |
Jun. 30, 2017 |
Jan. 31, 2017 |
Dec. 31, 2016 |
|
Debt Instrument [Line Items] | ||||
Principal amount | $ 3,551,502,000 | $ 3,380,827,000 | ||
Less: unamortized debt discount and issuance costs | 30,630,000 | 28,796,000 | ||
Plus: unamortized interest rate swap proceeds | 7,895,000 | 12,859,000 | ||
Total debt | 3,528,767,000 | 3,364,890,000 | ||
Less: current portion long-term debt | 985,291,000 | 614,485,000 | ||
Long-term debt | $ 2,543,476,000 | 2,750,405,000 | ||
Notes due September 2017 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.75% | |||
Principal amount | $ 385,109,000 | 385,109,000 | ||
Notes due March 2018 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.60% | |||
Principal amount | $ 250,000,000 | 250,000,000 | ||
Notes due May 2018 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.75% | |||
Principal amount | $ 350,000,000 | 350,000,000 | ||
Notes due March 2019 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.25% | |||
Principal amount | $ 300,000,000 | 300,000,000 | ||
Notes due October 2021 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.375% | |||
Principal amount | $ 600,000,000 | 600,000,000 | ||
Notes due May 2022 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.875% | 3.875% | ||
Principal amount | $ 400,000,000 | 0 | ||
Loan amount | $ 400,000,000 | |||
Notes due March 2024 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.625% | |||
Principal amount | $ 500,000,000 | 500,000,000 | ||
Notes due January 2037 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.25% | 5.25% | ||
Principal amount | $ 35,841,000 | 115,041,000 | ||
Redemption amount | $ 79,000,000 | |||
Notes due March 2043 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.70% | |||
Principal amount | $ 425,000,000 | 425,000,000 | ||
Term loans | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 300,000,000 | 450,000,000 | ||
Repayments of debt | $ 150,000,000 | |||
Other debt | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 5,552,000 | $ 5,677,000 |
Pensions and Other Benefit Programs (Components of Net Periodic Benefit Cost (Income)) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Defined Benefit Pension Plans | United States | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 34 | $ 22 | $ 64 | $ 54 |
Interest cost | 17,121 | 18,072 | 34,366 | 36,902 |
Expected return on plan assets | (24,369) | (25,370) | (48,917) | (50,959) |
Amortization of transition credit | 0 | 0 | 0 | 0 |
Amortization of prior service (credit) cost | (15) | (15) | (30) | (30) |
Amortization of net actuarial loss | 7,229 | 6,851 | 14,497 | 13,557 |
Settlement | 0 | 690 | 0 | 1,788 |
Net periodic benefit cost (income) | 0 | 250 | (20) | 1,312 |
Defined Benefit Pension Plans | Foreign | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 559 | 546 | 1,101 | 1,073 |
Interest cost | 4,640 | 5,746 | 9,184 | 11,407 |
Expected return on plan assets | (7,961) | (8,581) | (15,742) | (17,053) |
Amortization of transition credit | (2) | (2) | (4) | (4) |
Amortization of prior service (credit) cost | (17) | (18) | (35) | (35) |
Amortization of net actuarial loss | 1,892 | 1,373 | 3,926 | 2,716 |
Settlement | 0 | 0 | 0 | 0 |
Net periodic benefit cost (income) | (889) | (936) | (1,570) | (1,896) |
Nonpension Postretirement Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 434 | 521 | 853 | 1,022 |
Interest cost | 1,770 | 1,847 | 3,541 | 3,983 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of transition credit | 0 | 0 | 0 | 0 |
Amortization of prior service (credit) cost | 74 | 74 | 148 | 148 |
Amortization of net actuarial loss | 905 | 447 | 1,789 | 1,807 |
Settlement | 0 | 0 | 0 | 0 |
Net periodic benefit cost (income) | $ 3,183 | $ 2,889 | $ 6,331 | $ 6,960 |
Pensions and Other Benefit Programs (Narrative) (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Defined Benefit Pension Plans | United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions by employer | $ 3 | $ 7 |
Defined Benefit Pension Plans | Foreign | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions by employer | 10 | 39 |
Nonpension Postretirement Benefit Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions by employer | $ 9 | $ 8 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2018 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Effective tax rate (percent) | 9.20% | 35.80% | 24.20% | 36.50% | |
Charge from valuation allowance for tax carryovers | $ 4 | $ 3 | $ 4 | $ 3 | |
Tax benefit from resolution of settlement | $ 10 | $ 14 | |||
Scenario, Forecast | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Percent decrease in unrecognized benefits, reasonably possible (up to) | 15.00% |
Stockholders’ Equity (Deficit) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Increase (Decrease) in Stockholders' Equity | ||||
Balances, beginning of period | $ (103,660) | $ 178,721 | ||
Net income | $ 48,901 | $ 53,590 | 114,034 | 111,636 |
Other comprehensive income (loss) | 54,510 | (581) | 80,818 | 48,208 |
Dividends paid | (69,527) | (70,979) | ||
Issuance of common stock | (4,823) | (3,783) | ||
Conversion to common stock | 0 | 0 | ||
Stock-based compensation expense | 12,531 | 9,786 | ||
Repurchase of common stock | (194,776) | |||
Balances, end of period | 29,373 | 78,813 | 29,373 | 78,813 |
Preferred stock | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balances, beginning of period | 1 | 1 | ||
Balances, end of period | 1 | 1 | 1 | 1 |
Preference stock | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balances, beginning of period | 483 | 505 | ||
Conversion to common stock | (20) | (16) | ||
Balances, end of period | 463 | 489 | 463 | 489 |
Common stock | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balances, beginning of period | 323,338 | 323,338 | ||
Balances, end of period | 323,338 | 323,338 | 323,338 | 323,338 |
Additional paid-in capital | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balances, beginning of period | 148,125 | 161,280 | ||
Issuance of common stock | (28,567) | (22,592) | ||
Conversion to common stock | (398) | (320) | ||
Stock-based compensation expense | 12,531 | 9,786 | ||
Balances, end of period | 131,691 | 148,154 | 131,691 | 148,154 |
Retained earnings | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balances, beginning of period | 5,107,734 | 5,155,537 | ||
Net income | 114,034 | 111,636 | ||
Dividends paid | (69,527) | (70,979) | ||
Balances, end of period | 5,152,241 | 5,196,194 | 5,152,241 | 5,196,194 |
Accumulated other comprehensive loss | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balances, beginning of period | (940,133) | (888,635) | ||
Other comprehensive income (loss) | 80,818 | 48,208 | ||
Balances, end of period | (859,315) | (840,427) | (859,315) | (840,427) |
Treasury stock | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balances, beginning of period | (4,743,208) | (4,573,305) | ||
Issuance of common stock | 23,744 | 18,809 | ||
Conversion to common stock | 418 | 336 | ||
Repurchase of common stock | (194,776) | |||
Balances, end of period | $ (4,719,046) | $ (4,748,936) | $ (4,719,046) | $ (4,748,936) |
Accumulated Other Comprehensive Income (Loss) (Reclassifications) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Revenues | $ 821,371 | $ 835,886 | $ 1,658,011 | $ 1,680,475 |
Interest expense, net | (27,600) | (20,799) | (53,276) | (40,100) |
Selling, general and administrative | (297,468) | (289,116) | (603,771) | (615,998) |
Income before income taxes | 53,853 | 93,238 | 150,402 | 192,902 |
Benefit provision for income tax | (4,952) | (33,394) | (36,368) | (70,418) |
Net income | 48,901 | 58,184 | 114,034 | 120,824 |
Reclassification out of Accumulated Other Comprehensive Loss | Cash flow hedges | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Revenues | 34 | (353) | 6 | (733) |
Cost of sales | 36 | 145 | 148 | 370 |
Interest expense, net | (507) | (507) | (1,014) | (1,014) |
Income before income taxes | (437) | (715) | (860) | (1,377) |
Benefit provision for income tax | 170 | 277 | 336 | 535 |
Net income | (267) | (438) | (524) | (842) |
Reclassification out of Accumulated Other Comprehensive Loss | Available for sale securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense, net | (117) | (19) | (226) | (1) |
Benefit provision for income tax | 44 | 7 | 84 | 0 |
Net income | (73) | (12) | (142) | (1) |
Reclassification out of Accumulated Other Comprehensive Loss | Pension and postretirement benefit plans | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income before income taxes | (10,066) | (9,400) | (20,291) | (19,947) |
Benefit provision for income tax | 3,442 | 4,122 | 6,956 | 7,919 |
Net income | (6,624) | (5,278) | (13,335) | (12,028) |
Reclassification out of Accumulated Other Comprehensive Loss | Transition credit | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Selling, general and administrative | 2 | 2 | 4 | 4 |
Reclassification out of Accumulated Other Comprehensive Loss | Prior service costs | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Selling, general and administrative | (42) | (41) | (83) | (83) |
Reclassification out of Accumulated Other Comprehensive Loss | Actuarial losses | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Selling, general and administrative | $ (10,026) | $ (9,361) | $ (20,212) | $ (19,868) |
Accumulated Other Comprehensive Income (Loss) (Changes) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balances, beginning of period | $ (103,660) | $ 178,721 | ||
Other comprehensive income (loss) before reclassifications | 66,817 | 35,337 | ||
Reclassifications into earnings | 14,001 | 12,871 | ||
Other comprehensive income (loss), net of tax | $ 54,510 | $ (581) | 80,818 | 48,208 |
Balances, end of period | 29,373 | 78,813 | 29,373 | 78,813 |
Cash flow hedges | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balances, beginning of period | (1,485) | (3,912) | ||
Other comprehensive income (loss) before reclassifications | (141) | (420) | ||
Reclassifications into earnings | 524 | 842 | ||
Other comprehensive income (loss), net of tax | 383 | 422 | ||
Balances, end of period | (1,102) | (3,490) | (1,102) | (3,490) |
Available for sale securities | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balances, beginning of period | 120 | 536 | ||
Other comprehensive income (loss) before reclassifications | 1,734 | 5,862 | ||
Reclassifications into earnings | 142 | 1 | ||
Other comprehensive income (loss), net of tax | 1,876 | 5,863 | ||
Balances, end of period | 1,996 | 6,399 | 1,996 | 6,399 |
Pension and postretirement benefit plans | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balances, beginning of period | (787,813) | (738,768) | ||
Other comprehensive income (loss) before reclassifications | (1,482) | (430) | ||
Reclassifications into earnings | 13,335 | 12,028 | ||
Other comprehensive income (loss), net of tax | 11,853 | 11,598 | ||
Balances, end of period | (775,960) | (727,170) | (775,960) | (727,170) |
Foreign currency adjustments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balances, beginning of period | (150,955) | (146,491) | ||
Other comprehensive income (loss) before reclassifications | 66,706 | 30,325 | ||
Reclassifications into earnings | 0 | 0 | ||
Other comprehensive income (loss), net of tax | 66,706 | 30,325 | ||
Balances, end of period | (84,249) | (116,166) | (84,249) | (116,166) |
Total | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balances, beginning of period | (940,133) | (888,635) | ||
Other comprehensive income (loss), net of tax | 80,818 | 48,208 | ||
Balances, end of period | $ (859,315) | $ (840,427) | $ (859,315) | $ (840,427) |
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