Pitney Bowes 2008 Annual Report Download - page 35

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16
Results of Operations 2007 Compared to 2006
Business segment revenue
The following table shows revenue in 2007 and 2006 by business segment.
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) 2007 2006 % change % contribution
from acquisitions
Revenue:
U.S. Mailing $2,364 $2,362 -% 1%
International Mailing 1,070 1,013 6% -%
Production Mail 623 596 5% 2%
Software 326 182 79% 31%
Mailstream Solutions 4,383 4,153 6% 3%
Management Services 1,135 1,074 6% 3%
Mail Services 441 358 23% 4%
Marketing Services 171 145 18% 14%
Mailstream Services 1,747 1,577 11% 5%
Total Revenue $6,130 $5,730 7% 4%
Mailstream Solutions revenue increased 6% to $4.4 billion. Within Mailstream Solutions:
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 79% driven by continued strong worldwide demand for our software solutions, the acquisition of
MapInfo, and favorable foreign currency translation of 4%.
Mailstream Services revenue increased 11% to $1.7 billion. Within Mailstream Services:
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
2006 that did not repeat in 2007. Mail Services revenue increased by 23% 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 18 to the Consolidated Financial Statements.