Pitney Bowes 2008 Annual Report Download - page 95

PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share data)
76
The pre-tax restructuring charges and asset impairments are composed of:
Balance at
December 31,
2007 2008 Expense Cash
payments Non-cash charges Balance at December 31, 2008
Severance and benefit costs $ 81,251 $ 118,239 $ (91,059) $ - $ 108,431
Asset impairments - 46,695 - (46,695) -
Other exit costs 5,795 35,320 (8,437) - 32,678
Total $ 87,046 $ 200,254 $ (99,496) $ (46,695) $ 141,109
Balance at
December 31,
2006 2007 Expense Cash payments Non-cash charges Balance at December 31, 2007
Severance and benefit costs $ - $ 85,137 $ (3,886) $ - $ 81,251
Asset impairments - 173,081 - (173,081) -
Other exit costs - 5,795 - - 5,795
Total $ - $ 264,013 $ (3,886) $ (173,081) $ 87,046
In January 2003, we undertook restructuring initiatives related to realigned infrastructure requirements and reduced manufacturing
needs for digital equipment. In connection with this plan, we recorded pre-tax restructuring charges of $36 million for the year ended
December 31, 2006. The program was completed during 2006 and, therefore, there were no additional restructuring charges after
December 31, 2006. We made restructuring payments of $3 million, $29 million and $51 million during 2008, 2007 and 2006,
respectively. See Note 1 to the Consolidated Financial Statements for our accounting policy related to restructuring charges and asset
impairments.
15. Commitments, Contingencies and Regulatory Matters
Legal Proceedings
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 customers; 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.
Our wholly-owned subsidiary, Imagitas, Inc., is a defendant in ten purported class actions filed in six different states. These lawsuits
have been coordinated in the United States District Court for the Middle District of Florida, In re: Imagitas, Driver’s Privacy
Protection Act Litigation (Coordinated, May 28, 2007). Each of these lawsuits alleges that the Imagitas DriverSource program
violates the federal Drivers Privacy Protection Act (DPPA). Under the DriverSource program, Imagitas enters into contracts with
state governments to mail out automobile registration renewal materials along with third party advertisements, without revealing the
personal information of any state resident to any advertiser. The DriverSource program assists the state in performing its
governmental function of delivering these mailings and funding the costs of them. The plaintiffs in these actions are seeking both
statutory damages under the DPPA and an injunction against the continuation of the program. On April 9, 2008, the District Court
granted Imagitas’ motion for summary judgment in one of the coordinated cases, Rine, et al. v. Imagitas, Inc. (United States District
Court, Middle District of Florida, filed August 1, 2006). On July 30, 2008, the District Court issued a final judgment in the Rine
lawsuit and stayed all of the other cases filed against Imagitas pending an appellate decision in Rine. On August 27, 2008, the Rine
plaintiffs filed an appeal of the District Court’s decision in the United States Court of Appeals, Eleventh Judicial Circuit. The
appellate process in this case is proceeding.