Pitney Bowes 2015 Annual Report Download - page 37

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21
Business services revenue increased 23% in 2014 compared to 2013. Higher volumes in our global ecommerce solutions contributed to
a 17% increase, higher volumes of first-class mail processed and improved operational efficiencies in our Presort Services business
contributed to a 4% increase and higher marketing services fees due to new clients contributed to a 2% increase. Cost of business services
as a percentage of business services revenue improved to 70.0% in 2014 compared to 71.3% in 2013 as margin improvement in our
presort operations and marketing services more than offset our continuing investment in our global ecommerce solutions.
Selling, general and administrative (SG&A)
SG&A expense decreased 7% in 2015 compared to 2014 despite expenses of $13 million associated with implementation of our ERP
system, a one-time compensation charge of $10 million for the accelerated vesting and settlement of Borderfree stock-based compensation
awards, additional amortization expense of $9 million related to the acquisition of Borderfree and costs of $5 million related to the exit
of certain geographic markets during the fourth quarter of 2015. The overall decrease in SG&A expense is primarily due to our focus on
operational excellence and the benefits of productivity and cost-cutting initiatives. Foreign currency translation also reduced SG&A
expenses by 4% in 2015.
SG&A expense decreased 3% in 2014 compared to 2013 primarily due to the benefits of our restructuring actions and productivity
initiatives and lower depreciation expense. These benefits were partially offset by expenses of $36 million incurred in connection with
expanded branding and marketing programs and the planned implementation of an ERP system.
Restructuring charges and asset impairments, net
Restructuring charges and asset impairments of $26 million in 2015 consists of a restructuring charge of $21 million and a loss of $5
million on the sale of the corporate headquarters building. See Note 12 to the Consolidated Financial Statements for further details.
Other (income) expense, net
Other income, net for 2015 includes the gain on the sale of Imagitas of $112 million, transaction costs of $10 million incurred in connection
with the acquisitions of Borderfree and RTC (see Note 3 to the Consolidated Financial Statements) and a charge of $7 million associated
with the settlement of a legal matter (see Note 17 to the Consolidated Financial Statements).
Other expense, net for 2014 includes costs of $62 million incurred in connection with the early redemption of debt offset by $16 million
recognized in connection with the divestiture of a partnership investment.
Other expense, net for 2013 includes costs associated with the early redemption of debt.
Income taxes
See Note 15 to the Consolidated Financial Statements.
Discontinued operations
See Note 4 to the Consolidated Financial Statements.
Preferred stock dividends of subsidiaries attributable to noncontrolling interests
See Note 16 to the Consolidated Financial Statements.