Pitney Bowes 2015 Annual Report Download - page 34

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Net income from continuing operations and earnings per diluted share for the year were $403 million and $2.00, respectively, compared
to $300 million and $1.47, respectively, in 2014. The increase was primarily due to improving gross margins and lower selling, general
and administrative expenses due in part to the benefits of our restructuring actions, changes in our go-to-market strategy and other
productivity initiatives. A 5% increase in the effective tax rate partially offset these benefits.
We generated cash flow from operations of $515 million, received proceeds of $292 million from the sale of Imagitas and $52 million
from the sale of our former corporate headquarters building and other assets, and issued $90 million of commercial paper. We used cash
of $394 million to acquire businesses, $365 million to reduce debt, $166 million to fund capital investments, $168 million to pay dividends
to our stockholders and noncontrolling interests and $132 million to repurchase our common stock. At December 31, 2015, cash and cash
equivalents was $651 million.
Outlook
Our growth initiatives continue to focus on leveraging our expertise in physical and digital communications, hybrid communications and
the development of products, software, services and solutions that help our clients connect with customers to power commerce and grow
their businesses.
In 2016, we will continue to invest in the implementation of our ERP system in the United States and launch a new advertising campaign.
We anticipate the continued benefits from our restructuring actions, synergies from acquisitions, the benefits of the go-to-market strategy
in major markets and expected benefits from the implementation of the new ERP system should mostly offset these incremental costs.
In February 2016, we received additional authorization to repurchase an additional $150 million of our common stock and expect to
repurchase up to $215 million of our common stock during 2016.
During 2015, we experienced a considerable strengthening of the U.S. dollar. A continuing strong U.S. dollar could adversely affect our
reported revenues and profitability, both from a translation perspective and as a competitive perspective, as the cost of international
competitors’ products and solutions improves relative to products and solutions sold from the U.S. A strengthening dollar could also
continue to affect demand for U.S. goods sold to consumers in other countries through our global ecommerce operations.
Within SMB Solutions, the introduction of new solutions and services is being well-received in the marketplace and we anticipate further
stabilization in revenue through further product upgrades and launches in 2016. Internationally, the implementation of our go-to-market
strategy is now complete in our major markets and as a result we expect stabilizing trends in those markets. We will also focus on the
transition and training of a new sales organization, which is expected to improve productivity.
Within Enterprise Business Solutions, we expect continued revenue and profitability growth in Presort Services due to client expansion
and higher processed mail volumes; however, we anticipate that Production Mail revenue growth will continue to be challenged by the
uncertain macroeconomic environment in Europe and declining services revenue.
Within DCS, we anticipate increased demand in Software Solutions due to new industry-specific solutions, expansion of our partner
channel and improved sales efficiencies, and revenue growth in Global Ecommerce from our retail business and continued demand for
our shipping solutions driven by new client acquisitions and expanded services provided to existing clients should further enhance our
performance. In January 2016, we acquired a cloud-based, software-as-a-service enterprise retail and fulfillment solutions company.