Pitney Bowes 2009 Annual Report Download - page 39

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21
Additional asset impairments, unrelated to restructuring, were also recorded in 2008 and related to intangible assets of $16 million
principally due to a loss of a customer in one of our marketing consulting businesses and the ongoing shift in market conditions for the
litigation support vertical in our Management Services business.
As of December 31, 2009, 2,999 terminations have occurred under this program. The majority of the liability at December 31, 2009 is
expected to be paid during the next twelve months from cash generated from operations.
Pre-tax restructuring reserves at December 31, 2009 for the restructuring program announced in November 2007 are composed of the
following:
2007 Program
Balance at
December 31,
2008 Expenses
Cash
payments
Non-cash
charges
Balance at
December 31,
2009
Severance and benefit costs $ 108 $ (15) $ (78) $ - $ 15
Asset impairments - (4) - 4 -
Other exit costs 33 - (12) - 21
Total $ 141 $ (19) $ (90) $ 4 $ 36
Balance at
December 31,
2007 Expenses
Cash
payments
Non-cash
charges
Balance at
December 31,
2008
Severance and benefit costs $ 81 $ 118 $ (91) $ - $ 108
Asset impairments - 47 - (47) -
Other exit costs 6 35 (8) - 33
Total $ 87 $ 200 $ (99) $ (47) $ 141
Acquisitions
There were no acquisitions during 2009.
On April 21, 2008, we acquired Zipsort, Inc. for $40 million in cash, net of cash acquired. Zipsort, Inc. acts as an intermediary
between customers and the U.S. Postal Service. Zipsort, Inc. offers mailing services that include presorting of first class, standard
class, flats, permit and international mail as well as metering services. We assigned the goodwill to the Mail Services segment.
During 2008, we also completed several smaller acquisitions, the costs of which were $30 million. These acquisitions did not have a
material impact on our financial results. See Note 3 to the Consolidated Financial Statements for further details.
We accounted for these acquisitions using the purchase method of accounting and accordingly, the operating results of these
acquisitions have been included in our consolidated financial statements since the date of acquisition. Acquisitions made in 2008 did
not materially impact our diluted earnings per share for the year. See Note 3 to the Consolidated Financial Statements for further
discussion on acquisitions.
Liquidity and Capital Resources
We believe that cash flow from operations, existing cash and liquid investments, as well as borrowing capacity under our commercial
paper program, the existing credit facility and debt capital markets should be sufficient to finance our capital requirements and to
cover our customer deposits. Our potential uses of cash include but are not limited to the following: growth and expansion
opportunities; internal investments; customer financing; restructuring payments; tax payments; interest and dividend payments;
pension and other benefit plan funding; acquisitions; and share repurchase program.
We continue to review our liquidity profile. We have carefully monitored for material changes in the creditworthiness of those banks
acting as derivative counterparties, depository banks or credit providers to us through credit ratings and the credit default swap market.
We have determined that there has not been a material variation in the underlying sources of cash flows currently used to finance the
operations of the company. To date, we have had consistent access to the commercial paper market.