Pitney Bowes 2008 Annual Report Download - page 31

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12
Results of Operations 2008 Compared to 2007
Business segment revenue
The following table shows revenue in 2008 and 2007 by business segment.
Prior year results have been reclassified to conform to the current year presentation. Refer to Note 18 to the Consolidated Financial
Statements for further detail on these changes.
(Dollars in millions) 2008 2007 % change % contribution
from acquisitions
Revenue:
U.S. Mailing $ 2,207 $ 2,364 (7)% -%
International Mailing 1,133 1,070 6 % 1%
Production Mail 616 623 (1)% -%
Software 400 326 23% 20%
Mailstream Solutions 4,356 4,383 (1)% 2%
Management Services 1,172 1,135 3% 6%
Mail Services 542 441 23% 10%
Marketing Services 192 171 12% 5%
Mailstream Services 1,906 1,747 9% 7%
Total Revenue $ 6,262 $ 6,130 2% 3%
Mailstream Solutions revenue decreased 1% to $4.4 billion. Within Mailstream Solutions:
U.S. Mailing’s revenue decreased 7% due to lower equipment placements, rental revenue, and lower financing revenue. The lower
equipment revenues were driven in part by the prior year benefits from the sale of mailing equipment shape-based upgrade kits and by
customer buying decisions influenced by uncertainty created by weak economic conditions. International Mailing’s revenue grew by
6% and benefited 2% from favorable foreign currency translation and 1% from acquisitions. Revenue growth benefited from strong
growth in France, Germany, Norway and other parts of Europe as well as in Latin America; and continued growth in supplies.
Worldwide revenue for Production Mail decreased 1% due to lower equipment sales in the U.S., parts of Europe and Latin America as
economic uncertainty slowed large-ticket capital expenditures by many large enterprises worldwide. This decrease was partly offset
by continued strong demand in the U.K. and France for high-speed, intelligent inserting systems. Software revenue increased 23%
from prior year, driven by the positive impact of acquisitions of 20%. Software sales increased outside of the U.S., but declined
within the U.S. driven by the economic uncertainty, which has resulted in fewer large-ticket licensing deals than in the prior year as
customers assess the overall business environment.
Mailstream Services revenue grew 9% to $1.9 billion. Within Mailstream Services:
Management Services revenue grew 3% driven by acquisitions, which contributed 6% to segment revenue growth. The segment’s
revenue growth was partially offset by lower print and transaction volumes for some customers, especially in the U.S. financial
services sector. Mail Services revenue grew 23% due to continued growth in presort and international mail services of 14% and
acquisitions, which contributed 10% to segment revenue growth. Marketing Services revenue grew 12% driven primarily by higher
volumes in our mover-source program, partially offset by the company’s planned phased exit from the 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 18 to the Consolidated Financial Statements.
The following table shows EBIT in 2008 and 2007 by business segment.
Prior year results have been reclassified to conform to the current year presentation. Refer to Note 18 to the Consolidated Financial
Statements for further detail on these changes.