Pitney Bowes 2007 Annual Report Download - page 29

11
Results of Operations 2007 Compared to 2006
Business segment revenue
The following table shows revenue in 2007 and 2006 by business segment:
(Dollars in millions)
2007
2006 % change
% contribution
from acquisitions
Revenue:
U.S. Mailing.................................................. $ 2,346 $ 2,350 -% 1%
International Mailing .................................. 1,070 1,013 6% -%
Production Mail ........................................... 603 575 5% 2%
Software........................................................ 346 203 71% 50%
Mailstream Solutions................................. 4,365 4,141 5% 3%
Management Services.................................. 1,135 1,074 6% 3%
Mail Services ................................................ 459 370 24% 5%
Marketing Services...................................... 171 145 18% 16%
Mailstream Services .................................. 1,765 1,589 11% 5%
Total Revenue .............................................. $ 6,130 $ 5,730 7% 4%
U.S. Mailing’ s revenue remained flat. Revenue benefited from growth in supplies, payment solutions, and the sale of
equipment related to shape-based rating. However, results were unfavorably impacted by lower equipment sales due to the
wind-down of meter migration and weak economic conditions. International Mailing’ s revenue grew by 6%, including
favorable foreign currency translation of 8%. The segment’ s results were negatively impacted by lower sales and rentals in
Europe as delays in postal liberalization across Europe affected customer purchases. Worldwide revenue for Production Mail
grew by 5%, primarily driven by favorable foreign currency of 3% and acquisitions as higher equipment placements in the
U.S. were offset by lower sales in Europe. Software’ s revenue grew by 71% driven by continued strong worldwide demand
for our software solutions, the acquisition of MapInfo, and favorable foreign currency translation of 4%.
Management Services revenue increased by 6% due to the acquisition of Asterion SAS and favorable foreign currency
translation of 2%. The segment’ s revenue growth was negatively impacted by weakness in our legal solutions vertical as
well as print contracts in the prior year that did not repeat in 2007. Mail Services revenue increased by 24% due to continued
growth in presort and cross-border mail services. Marketing Services revenue increased by 18% driven primarily by
acquisitions. Revenue growth for this segment was negatively affected by lower revenue from our motor vehicle registration
services program.
Business segment earnings before interest and taxes (EBIT)
We use EBIT as a measure of our segment profitability. Refer to the reconciliation of segment amounts to income from
continuing operations before income taxes and minority interest in Note 19 to the Consolidated Financial Statements.
The following table shows EBIT in 2007 and 2006 by business segment:
(Dollars in millions) 2007 2006 % change
EBIT
U.S. Mailing.................................................. $ 957 $ 944 1)%
International Mailing .................................. 162 179 (10)%
Production Mail ........................................... 73 66 11)%
Software........................................................ 55 33 66)%
Mailstream Solutions................................. 1,247 1,222 2)%
Management Services.................................. 76 83 (9)%
Mail Services ................................................ 65 43 51)%
Marketing Services...................................... 9 20 (55)%
Mailstream Services .................................. 150 146 2)%
Total EBIT ................................................... $ 1,397 $ 1,368 2)%