Pitney Bowes 2009 Annual Report Download - page 32

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14
Mailstream Services revenue decreased 5% to $1.8 billion. However, EBIT increased 11% to $178 million, compared to the prior
year. Within Mailstream Services:
Management Services revenue decreased 9%, of which 2% was driven by the unfavorable impact of foreign currency translation. The
segment’s revenue was adversely affected by lower business activity and decreased print and transaction volumes throughout the U.S.
and Europe. Management Services EBIT, however, increased by 3% primarily due to productivity enhancements that have improved
the profitability of the operations globally.
Mail Services revenue increased 3% mostly due to the impact of 2008 acquisitions which contributed 4% but was partly offset by the
unfavorable impact of foreign currency translation of 1%. Expansion of the customer base and continued growth in mail processed
drove a slight increase in revenue for the year. Mail Services EBIT increased by 20% driven by the integration of Mail Services sites
acquired last year and ongoing automation and productivity initiatives implemented by the business.
Marketing Services revenue decreased 5%, mostly due to the impact of fewer household moves during the year and the resulting
decline in the volume of change of address kits mailed. Marketing Services EBIT increased 8% due to an improving cost structure
and the exit from the motor vehicle registration services program.
Revenue by source
(Dollars in millions) 2009 2008 % change
Equipment sales $1,007 $1,252 (20)%
Supplies 336 392 (14)%
Software 365 424 (14)%
Rentals 647 728 (11)%
Financing 695 773 (10)%
Support services 714 769 (7)%
Business services 1,805 1,924 (6)%
Total revenue $5,569 $6,262 (11)%
Equipment sales revenue decreased 20% compared to the prior year due to lower placements of mailing equipment as more customers
have delayed purchases of new equipment and extended their leases on existing equipment due to the global economic conditions.
Revenue also continues to be adversely affected by the ongoing changing mix in equipment placements to smaller, fully featured
systems. Foreign currency translation had an unfavorable impact of 3%.
Supplies revenue decreased 14% compared to the prior year due to lower supplies usage resulting from lower mail volumes and fewer
installed meters due to customer consolidations in the U.S. and internationally. Foreign currency translation had an unfavorable
impact of 3%.
Software revenue decreased 14% compared to the prior year primarily due to the impact of the global economic slowdown which has
caused many businesses to delay their capital spending worldwide. Worldwide consolidation in the financial services industry and
slowness in the retail sector have also adversely impacted sales and renewals of software licenses. Foreign currency translation had an
unfavorable impact of 4%.
Rentals revenue decreased 11% compared to the prior year as customers in the U.S. continue to downsize to smaller, fully featured
machines. The weak economic conditions have also impacted our international rental markets, specifically in Canada and France.
Foreign currency translation had an unfavorable impact of 1%.
Financing revenue decreased 10% compared to the prior year. Lower equipment sales over prior periods have resulted in a decline in
both our U.S. and international lease portfolios. Foreign currency translation had an unfavorable impact of 2%.
Support services revenue decreased 7% compared to the prior year, principally due to lower revenues in Canada, the U.S. and the U.K.
due to lower new equipment placements and the unfavorable impact of foreign currency translation of 3%.
Business services revenue decreased 6% compared to the prior year. Lower volumes at Management Services and Marketing Services
offset the impact of an increase in mail processed at Mail Services. The unfavorable impact of foreign currency translation of 2% was
partly offset by the positive impact of acquisitions which contributed 1%.