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What changed in PITNEY BOWES INC /DE/'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PITNEY BOWES INC /DE/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+265 added−277 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-20)

Top changes in PITNEY BOWES INC /DE/'s 2024 10-K

265 paragraphs added · 277 removed · 168 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeChadwick spent over 20 years at GE Capital, where she held several executive positions, including Controller of GE Capital Americas and CFO at GE Capital Energy Financial Services. Mr. Fairweather was appointed Executive Vice President and Chief Innovation Officer in May 2021. Prior to this, he was Senior Vice President and Chief Technology Officer, Commerce Services.
Biggest changeFairweather was appointed Executive Vice President and Chief Innovation Officer in May 2021, and was given added oversight of the IT organization in September 2024. Prior to this, he was the Company's Senior Vice President and Chief Innovation Officer from May 2019 through May 2021 and Senior Vice President, Chief Technology Officer, Commerce Services from January 2018 through May 2019.
Presort Services We are the largest workshare partner of the USPS and national outsource provider of mail sortation services that allow clients to qualify large volumes of First-Class Mail, Marketing Mail and Marketing Mail Flats and Bound Printed Matter for postal workshare discounts.
Presort Services We are the largest workshare partner of the USPS and national outsource provider of mail sortation services that allow clients to qualify large volumes of First-Class Mail, Marketing Mail and Marketing Mail Flats/Bound Printed Matter for postal workshare discounts.
We regularly assess the business environments and labor markets in the areas we operate to ensure our compensation programs reflect best practices and are market competitive. Depending on position and level, elements of our compensation packages include base salary or wages, variable compensation based on individual and company objectives and equity.
We regularly assess the business environments and labor markets in the areas we operate to ensure our compensation programs reflect best practices and are market competitive. Depending on position and level, elements of our compensation packages include base salary, variable compensation based on individual and company objectives and equity.
Our Presort Services operations are also subject to USPS regulations. The Bank is chartered as an Industrial Bank under the laws of the State of Utah. The Bank and certain company affiliates that provide services to the Bank are subject to the regulations of the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation.
The Bank is chartered as an Industrial Bank under the laws of the State of Utah. The Bank and certain company affiliates that provide services to the Bank are subject to the regulations of the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation.
Third-Party Suppliers Our SendTech Solutions segment depends on third-party suppliers and outsource providers for a variety of services and product components and the hosting of our SaaS offerings. Our Global Ecommerce and Presort Services segments rely on third-party suppliers 5 to help equip our facilities, provide warehouse support and assist with our logistical operations.
Third Party Suppliers Our SendTech Solutions segment depends on third party suppliers and outsource providers for a variety of services and product components and the hosting of our SaaS offerings. Our Presort Services segment relies on third party suppliers to help equip our facilities, provide warehouse support and assist with our logistical operations.
Climate Change Although climate change has had no material impact on our operations to date, the risk of increasingly severe climate events or the risk that those events happen more frequently could affect one or more of our facilities and our ability to conduct daily operations in the future.
Climate Change Although climate change has had no material impact on our operations to date, the risk of increasingly severe climate events or the risk that those events happen more frequently could affect one or more of our facilities and our ability to conduct daily operations in the future or impact our clients and their ability to do business with us.
Sales and Services We market our products, solutions and services through a direct and inside sales force, global and regional partner channels, direct mailings and digital channels. We provide call-center, online and on-site support services for our products and solutions.
Sales and Services We market our products, solutions and services through a direct and inside sales force, global and regional partner channels, direct mailings and digital channels. We provide call-center, online and on-site support services for our products and solutions. Support services are primarily provided under maintenance contracts.
Our financing operations face competition, in varying degrees, from large, diversified financial institutions, including leasing companies, commercial finance companies and commercial banks, as well as small, specialized firms.
Our financing operations face competition, in varying degrees, from large, diversified financial institutions, leasing companies, commercial finance companies, commercial banks and smaller specialized firms.
ITEM 1. BUSINESS General Pitney Bowes Inc. (we, us, our, or the company) is a global shipping and mailing company that provides technology, logistics, and financial services to small and medium sized businesses, large enterprises, including more than 90 percent of the Fortune 500, retailers and government clients around the world.
ITEM 1. BUSINESS General Pitney Bowes Inc. (we, us, our, or the company) is a technology-driven company that provides SaaS shipping solutions, mailing innovation, and financial services to clients around the world - including more than 90 percent of the Fortune 500.
In 2023, we processed over 15 billion pieces of mail through our network of operating centers throughout the United States. Using our fully-customized proprietary technology, we provide clients with end-to-end solutions from pick up to delivery into the postal system network, expedited mail delivery and optimal postage savings.
Using our fully-customized proprietary technology, we provide clients with end-to-end solutions from pick up to delivery into the postal system network, expedited mail delivery and optimal postage savings.
We have risk mitigation programs to monitor conditions affecting our suppliers' ability to fulfill expected commitments. We believe that our available sources for services, components, supplies, logistics and manufacturing are adequate. Regulatory Matters We are subject to the regulations of postal authorities worldwide related to product specifications of our postage meters.
We have risk mitigation programs to monitor conditions affecting our suppliers' ability to fulfill expected commitments. We believe that our available sources for services, components, supplies, logistics and manufacturing are adequate.
We consider the feedback from employees and implement changes where possible and financially prudent. 6 Health and Safety We are committed to providing a safe workplace that protects against and limits personal injury and environmental harm.
We conduct periodic employee engagement surveys and benchmark the results both internally and against other high performing organizations. We consider feedback from employees and we make changes where possible and financially prudent. Health and Safety We are committed to providing a safe workplace that protects against and limits personal injury and environmental harm.
Digital delivery services enables clients to reduce transportation and logistics costs, select the best carrier based on need and cost, improve delivery times and track packages in real-time.
We also offer financing alternatives that enable clients to finance or lease other manufacturers’ equipment and provide working capital. Digital delivery services enables clients to reduce transportation and logistics costs, select the best carrier based on need and cost, improve delivery times and track packages in real-time.
We provide a competitive benefits package fostered on work/life balance, including medical, dental, life and disability insurance, and benefits that provide additional support for our employees’ mental, physical, financial and social well-being.
We provide a competitive benefits package, including medical, dental, life and disability insurance, and benefits that provide additional support for our employees’ mental, physical, financial and social well-being. Employee Engagement and Development We are committed to creating a culture where our employees feel supported and valued.
We seek to create a high-performance culture that will drive and sustain enhanced long-term value for all our shareholders. To attract, retain and engage the talent needed, we provide competitive compensation and strive to maintain a diverse, inclusive and safe workplace, with equitable opportunities for growth and development. Our compensation programs are designed to reward performance and contribution.
We also rely on a contingent hourly workforce to supplement our full-time workforce to meet fluctuating demand. We seek to create a high-performance culture that will drive and sustain enhanced long-term value for all our shareholders. To attract, retain and engage the talent needed, we provide competitive compensation designed to reward performance and contribution.
The other information found on our website is not part of this or any other report we file with or furnish to the SEC. Information About Our Executive Officers Name Age Title Executive Officer Since Jason C. Dies 54 Interim Chief Executive Officer 2017 Daniel J.
The other information found on our website is not part of this or any other report we file with or furnish to the SEC.
Employee Engagement and Development We are committed to creating a culture where our employees feel supported and valued. We offer employees many opportunities to advance their skills, learn new skills and achieve career goals through virtual and in-person development and training programs, professional development initiatives, experiential learning, mentoring and coaching programs and inclusion networks.
We offer employees many opportunities to advance their skills, learn new skills and achieve career goals through virtual and in-person development and training programs, professional development initiatives, experiential learning, mentoring and coaching programs. Through multiple platforms, we offer employees and candidates varied opportunities to find development opportunities and stay informed about key changes to our 5 business.
Sending Technology Solutions (SendTech Solutions) We provide clients with physical and digital mailing and shipping technology solutions and other applications to help simplify and save on the sending, tracking and receiving of letters, parcels and flats. We also offer supplies and maintenance services for these offerings.
The resulting changes to our business segments is discussed in "Recent Developments" in Part I, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations." Business Segments Sending Technology Solutions (SendTech Solutions) SendTech Solutions provides clients with physical and digital shipping and mailing technology solutions and other applications to help simplify and save on the sending, tracking and receiving of letters, parcels and flats, as well as supplies and maintenance services for these offerings.
Presort Services We face competition from regional and local presort providers, cooperatives of multiple local presort providers, consolidators and service bureaus that offer presort solutions as part of a larger bundle of outsourcing services.
We believe our competitive advantage that differentiates us from our competitors is the breadth of our financing and payment solutions and our ability to seamlessly integrate these solutions into our clients' shipping and mailing operations. 4 Presort Services We face competition from regional and local presort providers, cooperatives of multiple local presort providers, consolidators and service bureaus that offer presort solutions as part of a larger bundle of outsourcing services.
Our competitive advantages include our extensive network capable of processing significant volumes and our innovative proprietary technology that provides clients with reliable, secure and precise services and maximum postage discounts. SendTech Solutions We face competition from other mail equipment and solutions providers and those that offer online shipping and mailing products and services solutions.
Our competitive advantages include our extensive network capable of processing significant volumes and our innovative proprietary technology that provides clients with reliable, secure and precise services and maximum postage discounts. Also see Item 1A. Risk Factors for further details regarding the competition our businesses face.
We provide revolving credit solutions to clients in Canada and the U.K. that enable them to make meter rental payments and purchase postage, services and supplies. Seasonality A larger percentage of our revenue is earned in the fourth quarter relative to the other quarters, driven primarily by higher shipping volumes during the holiday season.
We provide revolving credit solutions to clients in Canada and the U.K. that enable them to make meter rental payments and purchase postage, services and supplies.
Prior to this, she was President, Presort Services, Vice President/General Manager of the Columbus and Cincinnati Ohio Operating Centers, Vice President of National Accounts and Vice President Sales & Client Services, Mrs. Nurmohamed was appointed Executive Vice President and President, Sending Technology Solutions in January 2024. She joined the company in 2016 as Vice President, Document Messaging Technologies France.
Ms. Pfeiffer was appointed Executive Vice President and President, Presort Services in January 2024. Prior to this, she was the Company's President, Presort Services from November 2015 through December 2023. Ms. Nurmohamed was appointed Executive Vice President and President, Sending Technology Solutions in January 2024.
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These clients rely on us to remove the complexity and increase the efficiency in their sending of mail and parcels. For additional information, visit www.pitneybowes.com . Business Segments Global Ecommerce Domestic parcel services offers retailers a parcel delivery and returns network for end consumers.
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Small businesses to large enterprises, and government entities rely on Pitney Bowes to reduce the complexity of sending mail and parcels. Segment Updates The Company has gone through a strategic transformation over the last year.
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We operate numerous domestic parcel sortation centers connected by a nationwide transportation network, enabling us to pick up parcels from retailer distribution centers and move them through our physical network.
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We offer financing alternatives that enable clients to finance equipment and product purchases, a revolving credit solution that enables clients to make meter rental payments and purchase postage, services and supplies, and an interest-bearing deposit solution to clients who prefer to prepay postage.
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We also offer fulfillment services, providing pick, pack and ship services for clients through three fulfillment centers co-located within parcel sortation centers to facilitate same-day entry into our parcel delivery network. Cross-border services offers a range of services for our clients to manage their international shopping and shipping experience.
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Other Other represents amounts of the former Global Ecommerce segment that did not qualify for discontinued operations treatment, primarily related to operations that were dissolved or sold, certain shared services functions and a cross-border services contract.
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Our proprietary technology enables global tracking and logistics services; calculates duty, tax and shipping costs at checkout; enables multi-currency pricing, payment processing and fraud management; ensures compliance with product restrictions and produces all documentation requirements to meet export complexities and customs clearance.
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Competition SendTech Solutions We face competition from other mail equipment and solutions providers and those that offer online shipping and mailing products and services solutions.
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Our cloud enabled infrastructure provides software-as-a-service (SaaS) offerings delivered online and via connected or mobile devices. Our latest offerings are designed on an open platform architecture that have the capabilities to leverage partnerships with carriers, developers and other innovative companies to deliver value to our clients. We offer financing alternatives that enable clients to finance equipment and product purchases.
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Regulatory Matters Our SendTech Solutions segment is subject to the regulations of postal authorities worldwide related to product specifications of our postage meters and we are also subject to other various regulations as a U.S. government contractor. Our Presort Services operations are also subject to USPS regulations.
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Support services are primarily provided under maintenance contracts. 4 Competition Our businesses face competition from large, multinational companies and smaller, more narrowly focused regional and local firms. We compete on the basis of technology and innovation, breadth of product offerings, our ability to design and tailor targeted solutions to meet client needs, performance, service and support, price, quality and brand.
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Changes in regulation relating to climate change and other aspects of the area of ESG, including different regulatory requirements in different locations where we operate, may change the cost of compliance for collecting, assuring and reporting information regarding our ESG impacts and risk management. Human Capital Employee Profile We have approximately 7,200 employees, with 78% located in the United States.
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We must continue to invest in our current technologies, products and solutions, and in the development of new technologies, products and solutions in order to maintain and improve our competitive position. We frequently encounter new competitors as the markets in which we participate evolve and newer businesses enter our existing markets.
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Information About Our Executive Officers Name Age Title Executive Officer Since Lance Rosenzweig 62 Chief Executive Officer 2024 John Witek 65 Interim Chief Financial Officer, Interim Chief Accounting Officer 2024 Lauren Freeman-Bosworth 50 Executive Vice President, General Counsel and Corporate Secretary 2024 James Fairweather 53 Executive Vice President, Chief Innovation Officer 2021 Debbie Pfeiffer 64 Executive Vice President and President, Presort Services 2023 Shemin Nurmohamed 53 Executive Vice President and President, Sending Technology Solutions 2023 Christopher Johnson 46 Senior Vice President and President, Global Financial Services 2023 Judy Morris 62 Senior Vice President and Chief Human Resources Officer 2024 There are no family relationships among the above officers.
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A summary of the competitive environment for each of our segments is as follows: Global Ecommerce The domestic parcel services and cross-border solutions market includes competitors of various sizes, including companies and national posts with greater financial resources than us.
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Mr. Rosenzweig was appointed Chief Executive Officer in October 2024 and served as Interim Chief Executive Officer from May 2024 through October 2024.
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Some of these competitors specialize in point solutions or freight forwarding services, are full-service ecommerce business process outsourcers and online marketplaces with international logistic support, or major global delivery services companies. We also face competition from companies that can offer both domestic and cross-border solutions in a single package which creates pricing leverage.
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Prior to joining the company, he served as the Chief Executive Officer of Support.com, a leading provider of customer and technical support solutions and security software, from August 2022 to October 2022, and Chief Executive Officer of Startek Inc. from July 2018 to January 2020. Mr.
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The principal competitive factors include speed of delivery, price, ease of integration and use, innovative services, reliability, functionality and scalability.
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Witek was appointed Interim Chief Financial Officer in March 2024 and Interim Chief Accounting Officer in September 2024. Prior to this, he served as the Company's Head of Global Business Services from February 2023 until March 2024, and also served as the Chief Financial Officer of our SendTech Solutions segment from January 2019 through January 2023. Ms.
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We compete based on the accuracy, reliability and scalability of our platform and logistics services, our ability to provide clients and their customers a one-stop full-service ecommerce experience and the ability to provide a more customized shipping solution than some of the larger competitors in the industry.
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Freeman-Bosworth was appointed Executive Vice President, General Counsel and Corporate Secretary in April 2024. Prior to this role, she was the Company's Vice President and Deputy General Counsel, Litigation, Governance and Compliance from June 2014 through April 2024. Mr.
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Our digital delivery services business competes with technology providers who help make shipping easier and more cost-effective. These technology providers range from large, established companies to smaller companies offering negotiated carrier rates. The principal competitive factors include technology stability and reliability, innovation, access to preferred shipping rates and ease of integration with existing systems.
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Prior to this, she was Senior Vice President and President, SendTech Solutions from January 2023 through January 2024 and Senior Vice President, Global SendTech Product and Strategy from September 2020 through January 2023. Mr. Johnson was appointed Senior Vice President and President, Global Financial Services in September 2018, and then was elected as an Executive Officer in September 2023.
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Additionally, the growth of alternative communication methods as compared to physical mail continue to grow, which creates competition to mail and to our offerings that enable clients to use the mail efficiently.
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Previously, he was the Company's Vice President, Global Financial Services from November 2016 through September 2018. 6 Ms. Morris was appointed Senior Vice President and Chief Human Resources Officer in November 2024. Prior to joining the Company, she was Chief Human Resources Officer of Progrexion (which changed their name to Credit.com in June 2023) from October 2017 through November 2024.
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We believe our competitive advantage that differentiates us from our competitors is the breadth of our financing and payment solutions and our ability to seamlessly integrate these solutions into our clients' shipping and mailing operations. Also see Item 1A. Risk Factors for further details regarding the competition our businesses face.
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Increasing regulatory restrictions in response to climate change could also materially affect our costs, especially with respect to transportation. Human Capital Employee Profile We have approximately 10,500 employees, with 81% located in the United States. We also rely on a contingent hourly workforce to supplement our full-time workforce to meet fluctuating demand.
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Diversity and Inclusion Maintaining a diverse workforce and an inclusive environment is critical to our success and we view diversity and inclusion as a competitive differentiator that helps us attract, grow, engage and retain the best talent.
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We celebrate a rich mix of countries, cultures, ages, races, ethnicities, gender identities, sexual orientation, abilities, and perspectives that showcase our humanity, differentiate us as individuals and enhance our businesses. Our global workforce is comprised of over 43% women and 35% of our global managers are women.
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Our U.S. population is nearly 50% people of color and 36% of our U.S. managers are people of color. We continue to increase diversity and inclusion awareness throughout our company through enhancements and improvements to our talent acquisition processes, cultural awareness training and the creation of allies and mentors to help advance diversity and inclusion in our workforce.
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Through multiple platforms, we offer employees and candidates varied opportunities to find development opportunities and stay informed about key changes to our business. We conduct an independent annual employee engagement survey with demonstrated high levels of employee participation. We benchmark our results against our previous year’s performance, as well as against other high-performing organizations.
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Through these efforts and employee engagement, we have experienced significant improvements in our total recordable cases and total recordable incident rates since 2019.
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Goldstein 62 Executive Vice President and Chief Legal Officer and Corporate Secretary 2010 Christoph Stehmann (1) 61 Executive Vice President, International Sending Technology Solutions 2016 Gregg Zegras 56 Executive Vice President and President, Global Ecommerce 2020 Ana Maria Chadwick 52 Executive Vice President and Chief Financial Officer 2021 James Fairweather 52 Executive Vice President, Chief Innovation Officer 2021 Debbie Pfeiffer (2) 63 Executive Vice President and President, Presort Services 2024 Shemin Nurmohamed (3) 52 Executive Vice President and President, Sending Technology Solutions 2024 (1) Effective April 1, 2024, Mr.
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Stehmann will be retiring. (2) Effective January 1, 2024, Ms. Pfeiffer was appointed Executive Vice President and President, Presort Services. (3) Effective January 1, 2024, Mrs. Nurmohamed was appointed Executive Vice President and President, Sending Technology Solutions. There are no family relationships among the above officers.
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The above officers have served in various executive positions with the company for at least the past five years except as follows: Mr. Zegras was appointed Executive Vice President and President, Global Ecommerce in July 2020. He joined the company in 2013 as President, Imagitas. Prior to joining the company, Mr.
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Zegras held several executive leadership positions, including at NBC Universal, Sharecare and Hearst Entertainment. Ms. Chadwick joined the company as Executive Vice President and Chief Financial Officer in January 2021. Prior to joining the company, Ms. Chadwick was employed at the financial services division of General Electric Company as President and CEO of GE Capital Global Legacy Solutions. Ms.
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He has been a leader in the company's strategic digital transformation and technology initiatives across Design, SaaS, Data Science and Analytics, API Management, Security and Mobility. Ms. Pfeiffer was appointed Executive Vice President and President, Presort Services in January 2024.
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Prior to joining the company, Mrs. Nurmohamed had a 16 year career at IBM as CFO and Sales Director of various business units at the European and global levels. 7

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

58 edited+28 added−32 removed28 unchanged
Biggest changeStrategic acquisitions and business divestitures involve significant risks and uncertainties, which could have an adverse effect on our financial performance, including: • difficulties in achieving anticipated benefits or synergies; • difficulties in integrating newly acquired businesses and operations, including combining product and service offerings and integrating financial reporting and other IT systems; • the loss of key employees or clients of businesses acquired or divested; • significant charges for employee severance and other restructuring costs, legal, accounting and financial advisory fees and goodwill and asset impairment charges; and • reducing fixed costs previously associated with divested businesses Our capital investments to develop new products and offerings may not yield the anticipated benefits.
Biggest changeWe may not fully realize the anticipated benefits of strategic acquisitions and divestitures which may harm our financial performance. Strategic acquisitions and business divestitures involve significant risks and uncertainties, which could have an adverse effect on our financial performance, including, but not limited to, difficulties in achieving anticipated benefits or synergies.
We supplement our workforce with contingent hourly workers from staffing agencies on an as-needed basis; however, if we experience labor shortages, do not effectively manage our ability to attract and utilize contingent workers, or if our staffing agencies terminate their relationship with us and we cannot find alternative providers, it could result in increased costs and adversely affect our operations.
We supplement our workforce with contingent hourly 8 workers from staffing agencies on an as-needed basis; however, if we experience labor shortages, do not effectively manage our ability to attract and utilize contingent workers, or if our staffing agencies terminate their relationship with us and we cannot find alternative providers, it could result in increased costs and adversely affect our operations.
An accelerated or sudden decline could result from one or more of the following factors: changes in communication technologies and their use; changes in frequency and quality of mail delivery from national posts; legislation incentivizing alternative means of communication, burdening mail, or limiting how the mail be used; significant rate increases; or other external events affecting physical mail delivery.
An accelerated or sudden decline in mail volumes could result from one or more of the following factors: changes in communication technologies and their use; changes in frequency and quality of mail delivery from national posts; legislation incentivizing alternative means of communication, burdening mail, or limiting how the mail be used; significant rate increases; or other external events affecting physical mail delivery.
We provide competitive finance offerings and fund discretionary priorities, such as business investments, strategic acquisitions, dividend payments and share repurchases through a combination of cash generated from operations, deposits held at the Bank and access to capital markets.
We provide competitive finance offerings and fund discretionary priorities, such as capital investments, strategic acquisitions, dividend payments and share repurchases through a combination of cash generated from operations, deposits held at the Bank and access to capital markets.
If these supply chain constraints were to worsen or, if other unknown events cause our suppliers to not be able to provide their services, components or equipment to us in a timely manner, or, if the quality of the goods or services received were to deteriorate, our relationship with certain suppliers were to be terminated, or if the costs of using these third parties were to continue to increase and we were not able to find alternate suppliers, we could lose clients, incur significant disruptions in manufacturing and operations and increased costs (including higher freight and re-engineering costs) and delay automation and productivity initiatives in our warehouses.
If these supply chain constraints were to worsen or, if other unknown events cause our suppliers to not be able to provide their services, components or equipment to us in a timely manner, or, if the quality of the goods or services received were to deteriorate, our relationship with certain suppliers were to be terminated, or if the costs of using these third parties were to continue to increase and we were not able to find alternate suppliers, we could lose clients, incur significant disruptions in manufacturing and operations and increased costs (including higher freight and re-engineering costs) and delay automation and productivity initiatives in our facilities.
Cybersecurity and Technology Risks Our financial performance and our reputation could be adversely affected, and we could be subject to legal liability or regulatory enforcement actions, if we or our suppliers are unable to protect against, or effectively respond to, cyberattacks or other cyber incidents.
Cybersecurity and Technology Risks Our financial performance and our reputation could be adversely affected, and we could be subject to legal liability or regulatory enforcement actions, if we or our suppliers are unable to protect against, or effectively respond to, cyberattacks or other cybersecurity incidents.
Successful breaches could, among other things, disrupt our operations or result in the unauthorized disclosure, theft and misuse of company, client, consumer and employee sensitive and confidential information, all of which could adversely affect our financial performance.
Successful cybersecurity breaches could, among other things, disrupt our operations or result in the unauthorized disclosure, theft and misuse of company, client, consumer and employee sensitive and confidential information, all of which could adversely affect our financial performance.
Although we continually monitor and assess the impact of these laws and regulations, and continually update our systems to protect our data and comply with these laws, their interpretation and enforcement are uncertain, subject to change, and may require substantial costs to monitor and implement.
Although we endeavor to continually monitor and assess the impact of these laws and regulations, and continually update our systems to protect our data and comply with these laws, their interpretation and enforcement are uncertain, subject to change, and may require substantial costs to monitor and implement.
Some of these state laws have established independent agencies with rule making and enforcement authority, whose initial guidance, actions, and regulations remain to be determined and tested, adding additional layers of uncertainty with respect to compliance.
Some of these state laws have established independent agencies with rule making and enforcement 10 authority, whose initial guidance, actions, and regulations remain to be determined and tested, adding additional layers of uncertainty with respect to compliance.
Failure to comply with data privacy and protection laws and regulations could also result in government enforcement actions (which could include substantial civil and/or criminal penalties) and private litigation, which could adversely affect our reputation and financial performance.
Failure to comply with data privacy and protection laws and regulations could also result in government enforcement actions (which could result in substantial civil and/or criminal penalties) and private litigation, which could adversely affect our reputation and financial performance.
These cyber threats are constantly evolving, especially given the advances in, and the rise of the use of, artificial intelligence, thereby increasing the difficulty of preventing, detecting, and successfully defending against them.
These cyber threats are diverse and constantly evolving, especially given the advances in, and the rise of the use of, artificial intelligence, thereby increasing the difficulty of preventing, detecting, and successfully defending against them.
In the United States, a growing number of states have enacted different laws regarding personal information and privacy that impose significant new requirements on consumer personal information. In some instances (e.g., California), these laws also expand the definition of consumer personal information to include information related to employees and business contacts.
In the United States, a growing number of states have enacted different laws regarding personal information, privacy and artificial intelligence that impose significant new requirements on consumer personal information. In some instances (e.g., California), these laws also expand the definition of consumer personal information to include information related to employees and business contacts.
Changes in tax laws may be on a prospective or retroactive basis and could have a material impact of our tax expense and cash flows. The Organization for Economic Co-operation and Development (OECD) have set forth a Two-Pillar Solution fundamentally overhauling the international tax rules.
Changes in tax laws may be on a prospective or retroactive basis and could have a material impact on our tax expense and cash flows. The Organization for Economic Co-operation and Development (OECD) has set forth a Two-Pillar Solution fundamentally overhauling the international tax rules.
Cybersecurity breaches could result in financial liability to other parties, governmental investigations, regulatory enforcement actions and penalties, and damage to our brand and reputation. Although we maintain insurance coverage relating to cybersecurity incidents, we may incur costs or financial losses that are either not insured against or not fully covered through our insurance.
Cybersecurity breaches could result in legal claims or proceedings, financial liability to other parties, governmental investigations, regulatory enforcement actions and penalties, and damage to our brand and reputation. Although we maintain insurance coverage relating to cybersecurity incidents, we may incur costs or financial losses that are either not insured against or not fully covered through our insurance.
We are dependent on financially viable national posts in the geographic markets where we operate, particularly in the United States. A significant portion of our revenue depends upon the ability of these posts, especially the USPS, to provide competitive mail and package delivery services to our clients and the quality of the services they provide.
We are dependent on financially viable national posts in the geographic markets where we operate, particularly in the United States. A significant portion of our revenue depends upon the ability of these posts, especially the USPS, to provide reliable, competitive mail and package delivery services to our clients.
Although our 2023 financial results were not significantly impacted, these factors, at times, caused us to experience longer wait times for supplies or increased costs.
Although our 2024 financial results were not significantly impacted, these factors, at times, caused us to experience longer wait times for supplies or increased costs.
There are numerous cybersecurity risks to these systems, including individual and group criminal hackers, industrial espionage, denial of service attacks, ransomware and malware attacks, attacks on the software supply chain, and employee errors and/or malfeasance.
There are numerous cybersecurity risks to these systems, including, but not limited to, individual and group criminal hackers, industrial espionage, denial of service attacks, ransomware and malware attacks, attacks on the software supply chain, and employee errors and/or malfeasance.
A significant decline in cash flows, noncompliance with any of the covenants under the revolving credit facility, further credit rating downgrades, material capital market disruptions, significant withdrawals by depositors at the Bank, adverse changes to our industrial loan charter or an increase in our credit default swap spread could impact our ability to maintain adequate liquidity, which could impact our ability to provide competitive finance offerings, repay or refinance maturing debt, and fund other strategic or discretionary activities, which could adversely affect our operational and financial performance.
A significant decline in cash flows, changes in our credit ratings, material capital market disruptions, noncompliance with any of our debt covenants, significant withdrawals by depositors at the Bank, adverse changes to our industrial loan charter or an increase in our credit default swap spread could impact our ability to maintain adequate liquidity, which could impact our ability to provide competitive finance offerings, repay or refinance maturing debt, and fund other strategic or discretionary activities, which could adversely affect our operational and financial performance.
Our Sending Technology Solutions segment faces competition from other mail equipment and solutions providers, companies that offer products and services as alternative means of message communications and those that offer online shipping and mailing products and services solutions.
Our SendTech Solutions segment faces competition from other mail equipment and solutions providers, companies that offer products and services as alternative means of message communications and those that offer online shipping and mailing products and services solutions.
Some of these providers may also be competitors. The use of these providers is subject to risks, including our ability to negotiate acceptable terms, increased competition during peak periods, capacity issues, increased fuel costs, labor shortages, performance problems, extreme weather, natural or man-made disasters, pandemics, or other unforeseen difficulties.
The use of these providers is subject to risks, including our ability to negotiate acceptable terms, increased competition during peak periods, capacity issues, increased fuel costs, labor shortages, performance problems, extreme weather, natural or man-made disasters, pandemics, or other unforeseen difficulties.
Future credit rating downgrades, capital market disruptions, significant decline in cash flows, noncompliance with any of our debt covenants, or significant withdrawals by depositors at the Bank, could adversely affect our ability to maintain adequate liquidity, provide competitive financing services and to fund various discretionary priorities.
A significant decline in cash flows, changes in our credit ratings, capital market disruptions, noncompliance with any of our debt covenants, or significant withdrawals by depositors at the Bank, could adversely affect our ability to maintain adequate liquidity, provide competitive financing services and to fund various discretionary priorities.
We also rely on third-party suppliers to help us equip our Presort and Ecommerce facilities and to provide us with services related to some of our operations and productivity initiatives. In certain instances, we rely on single-sourced or limited-sourced suppliers around the world because of advantages in quality, price or lack of alternative sources.
Our Presort segment relies on third party suppliers to help us equip our facilities and to provide services related to our operations and productivity initiatives. In certain instances, we rely on single-sourced or limited-sourced suppliers around the world because of advantages in quality, price or lack of alternative sources.
Our digital delivery business competes with technology providers ranging from large, established companies and national posts to smaller companies offering negotiated carrier rates. In addition, our financing operations face competition, in varying degrees, from large, diversified financial institutions, including leasing companies, commercial finance companies and commercial banks, as well as small, specialized firms.
SendTech Solutions’ digital shipping business competes with technology providers ranging from large, established companies and national posts to smaller companies offering negotiated carrier rates. In addition, our financing operations face competition, in varying degrees, from large, diversified financial institutions, leasing companies, commercial finance companies, commercial banks and smaller specialized firms.
Further, actions of activist stockholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Further, actions of activist stockholders may 12 cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.
If we are not able to respond to the continuing decline in the volume of physical mail delivered via traditional postal services, our financial performance could be adversely affected. Continuing declines in traditional mail volumes impact our financial results, primarily within our SendTech Solutions and Presort Services segments.
If we are not able to respond to the continuing decline in the volume of physical mail delivered via traditional postal services, our financial performance could be adversely affected. Continuing declines in traditional mail volumes impact our financial results.
Fluctuations in transportation costs or disruptions to transportation services in our Global Ecommerce or Presort Services segments could adversely affect client satisfaction or our financial performance. In addition to our reliance on the USPS, our Global Ecommerce and Presort Services segments rely upon third-party transportation service providers to transport a significant portion of our parcel and mail volumes.
Fluctuations in transportation costs or disruptions to transportation services in our Presort Services segment could adversely affect client satisfaction or our financial performance. In addition to our reliance on the USPS, our Presort Services segment relies upon third party transportation service providers to transport a significant portion of our mail volumes.
If new or future product and service offerings are not approved or there are significant conditions to approval, favorable postage rates are reversed, regulations on existing products or services are changed, posts utilize their position in the market or their role as product regulator to limit competition in areas where the posts themselves offer solutions, or if we fall out of compliance with the posts’ regulations, our financial performance could be adversely affected.
Additionally, if favorable postage rates are reversed, regulations on existing products or services are changed, posts utilize their position in the market or their role as product regulator to limit competition in areas where the posts themselves offer solutions, or if we fall out of compliance with the posts’ regulations, our financial performance could be adversely affected.
Any significant or perceived weakening of these economies, reduction in business confidence or change in business or consumer spending habits, concerns of a domestic or global recession, rising inflation or interest rates, limited availability of credit, or other macroeconomic events (including public health crises), not within our control, may reduce our client’s demand for shipping and mailing products and services (especially in our Global Ecommerce business, which is subject to cyclical trends in consumer sentiment and spending habits) and thus, negatively affect our financial performance.
Any significant or perceived weakening of these economies, reduction in business confidence or change in business or consumer spending habits, concerns of a domestic or global recession, rising inflation or interest rates, limited availability of credit, or other macroeconomic events (including public health crises and severe weather events), not within our control, may impact our clients’ businesses or reduce our clients’ demand for shipping and mailing products and services and thus, negatively affect our financial performance.
Such actions may cause us to experience a loss of continuity, loss of accumulated knowledge and/or inefficiency, loss of key employees and/or other retention issues during transitional periods. Such actions may also make hiring qualified employees more difficult.
Such actions may cause us to experience a loss of continuity, experience and knowledge, a reduction in productivity and efficiency, the unexpected loss of key employees and/or other retention issues during transitional periods. Such actions may also make hiring qualified employees more difficult.
Mailing and Shipping Industry Risks The financial condition of the USPS, or the national posts in our other major markets, has affected, and could, in the future, affect the ability of those posts to provide services to us or our clients, which could adversely affect client demand for our offerings and thus our financial performance.
Mailing and Shipping Industry Risks The financial condition and governance model of the USPS, or the national posts in our other major markets, has affected, and could, in the future, adversely affect client demand for our offerings and thus our financial performance.
The scope of the laws that may be applicable to us is often uncertain and may be conflicting. In addition, new laws may add a broad array of requirements on how we handle or use information and increase our compliance obligations.
The scope of the laws that may be applicable to us is often uncertain and may be conflicting, and the growth of our cloud-based services increases the scope and complexity of laws that might apply. In addition, new laws may add an array of requirements on how we handle or use information and increase our compliance obligations.
However, these changes could result in double tax, increase our effective tax rate and adversely impact our financial results and cash flows. We are subject to tax audits in the various jurisdictions in which we operate.
However, these changes could result in double tax, increase our effective tax rate and adversely impact our 11 financial results and cash flows. We continuously monitor developments and evaluate the impact these new rules are anticipated to have on our tax rate. We are subject to tax audits in the various jurisdictions in which we operate.
If one or more government agency discovers contractual noncompliance by us or one of our subcontractors, we may be subject to various civil or criminal penalties and administrative sanctions, which could include the termination of the contract, reimbursement of payments received, fines and debarment from doing business with other government agencies.
If we were subjected to a claim of contractual noncompliance by a government agency and were found noncompliant, then we could be subject to various civil or criminal penalties and administrative sanctions, which could include the termination of the contract, reimbursement of payments received, fines and debarment from doing business with other government agencies.
Our businesses are not materially dependent on any one patent or license or group of related patents and licenses; however, our business success depends in part upon protecting our intellectual property rights, including proprietary technology developed or obtained through acquisitions. We rely on copyrights, patents, trademarks, trade secrets and other intellectual property laws to establish and protect our proprietary rights.
Our business success depends in part upon protecting our intellectual property rights, including proprietary technology developed (internally or by third party partners and subcontractors) or obtained through acquisitions. We rely on copyrights, patents, trademarks, trade secrets and other intellectual property laws to establish and protect our proprietary rights.
We made and are continuing to make significant capital investments in new products and services. If we are not successful in these new product or service introductions, or if our past investments in facilities do not yield the expected productivity improvements, at the levels anticipated when making the investments, there may be an adverse effect on our financial performance.
If we are not successful in these new product or service introductions, or if our past capital investments do not yield the results anticipated when making the investments, there may be an adverse effect on our financial performance. We are subject to risks relating to the Ecommerce Restructuring and related transactions.
Our businesses use, process, and store proprietary information and personal, sensitive, or confidential data relating to our business, clients, and employees. Privacy laws and similar regulations in many jurisdictions where we do business require that we take significant steps to safeguard that information, and these laws and regulations continue to evolve.
Privacy laws and similar regulations in many jurisdictions where we do business require that we take significant steps to safeguard that information, and these laws and regulations continue to evolve.
We value constructive input from investors and regularly engage with our stockholders regarding strategy and performance. Although our Board of Directors and management team are committed to acting in the best interests of all our stockholders, there is no assurance that the results of actions taken by our Board of Directors and management team will be successful.
Although our Board of Directors and management team are committed to acting in the best interests of all our stockholders, there is no assurance that the results of actions taken by our Board of Directors and management team will be successful. We have been and may continue to be subject to shareholder activism in the future.
If we are not able to differentiate ourselves from our competitors or effectively compete with them, the financial results of the segment may be adversely affected. The evolution of our businesses to more digital and shipping-related services has resulted in a decline in our overall profit margins.
If we are not able to differentiate ourselves from our competitors or effectively compete with them, the financial results of the segment may be adversely affected.
There is also significant competition for the talent needed for research and development of new products and services and talent needed to sell and service our other products and services within all our business units. Increased competition for employees has resulted in higher costs for wages and other benefits necessary to attract and retain employees with the right skill sets.
There is also significant competition for the talent needed for research and development of new products and services and talent needed to sell and service our other products and services within all our business units.
As posts consider new strategies for their operations in 8 an era of declining mail volumes and increasing package volumes, if we are unable to work with posts to support those strategies, our financial performance could be adversely affected. Business Operational Risks We face intense competition in the industries in which we operate.
As posts consider new strategies for their operations in an era of declining mail volumes and increasing package volumes, if those strategies disadvantage our business, our financial performance could be adversely affected.
The set of topics incorporated within the term ESG in general, and climate change in particular, cover a range of issues that pose potential risks to our operations.
If we do not keep pace with changing expectations and regulations in the areas of ESG, our reputation and results of operations may be adversely affected. The set of topics incorporated within the term ESG in general, including climate change in particular, cover a range of issues that pose potential risks to our operations.
Our ability to access U.S. capital markets and the associated cost of borrowing is dependent upon our credit ratings and is subject to capital market volatility. Given our current credit rating, we may experience reduced financial or strategic 12 flexibility and higher costs when we do access the U.S. capital markets.
Our ability to access U.S. capital markets and the associated cost of borrowing is dependent upon our credit ratings and is subject to capital market volatility.
Our goal is to prevent meaningful incursions and minimize the overall impact of those that occur. For more information on how the Company handles cybersecurity, see Item 1C. Cybersecurity. Failure to comply with data privacy and protection laws and regulations could subject us to legal liability and adversely affect our reputation and our financial performance.
For more information on how the Company handles cybersecurity, see Item 1C. Cybersecurity. Failure to comply with data privacy and protection laws and regulations could subject us to legal liability and adversely affect our reputation and our financial performance. Our businesses use, process, and store proprietary information and personal, sensitive, or confidential data relating to our business, clients, and employees.
Moreover, given the nature of our Global Ecommerce and Presort Services employee base, if we cannot continue to maintain good relationships, we could experience increased employee dissatisfaction and turnover, which could result in increased operating costs and reduced operational flexibility. In May 2023, we approved a worldwide restructuring plan (the 2023 Plan), which involved the elimination of 850-950 positions worldwide.
Moreover, given the nature of our Presort Services employee base, if we cannot continue to maintain good relationships, we could experience increased employee dissatisfaction and turnover, which could result in increased operating costs and reduced operational flexibility. If we fail to comply with government contracting regulations, our financial performance, brand name and reputation could suffer.
These claims, if successful, may require us to redesign affected products, enter into costly settlement or license agreements, pay damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling certain products. If we fail to comply with government contracting regulations, our financial performance, brand name and reputation could suffer.
Although third parties also face the same difficulties in patenting software and service-based offerings, these claims, if successful, may require us to redesign affected products, enter into costly settlement or license agreements, pay damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling certain products.
A significant portion of our business is subject to regulation and oversight by the USPS, posts in other major markets, and the governmental bodies that regulate the posts themselves. These postal authorities have the power to regulate some of our current products and services and to establish guidelines for postage rates.
We are subject to postal regulations and processes, which could adversely affect our financial performance. A significant portion of our business is subject to regulation and oversight by the USPS, posts in other major markets, and the governmental bodies that regulate the posts themselves.
As we continue to transition our business to more software and service-based offerings, patent protection of these innovations will be more difficult to obtain. In addition, from time to time, third parties may claim that we, our clients, or our suppliers, have infringed their intellectual property rights.
In addition, from time to time, third parties may claim that we, our clients, or our suppliers, have infringed their intellectual property rights.
They also must approve many of our new or future product and service offerings before we can bring them to market.
These postal authorities have the power to regulate some of our current products and services and to establish guidelines for postage rates. They also must approve many of our new product and service offerings before we can bring them to market.
Responding to proxy contests, including related litigation, can be costly, time-consuming, disrupt our operations and divert the attention of management, Board of Directors and employees. All of this could adversely affect our results of operations and financial condition, as well as the market performance of our securities.
All of this could adversely affect our results of operations and financial condition, as well as the market performance of our securities.
Our business depends on our ability to attract, retain, and engage with, employees at a reasonable cost to meet the needs of our business and to consistently deliver highly differentiated, competitive offerings. The rapid growth of the ecommerce industry has resulted in ongoing competition for employees in the shipping, transportation, and logistics industry, including drivers and warehouse employees.
Our business depends on our ability to attract, retain, and engage with, employees at a reasonable cost to meet the needs of our business and to consistently deliver highly differentiated, competitive offerings. During the second quarter of 2024, we approved a worldwide cost reduction initiative (the "2024 Plan"), which involved the elimination of approximately 2,800 positions worldwide in 2024.
Any of these events could not only affect our financial performance, but also adversely affect our brand and reputation. We may not fully realize the anticipated benefits of strategic acquisitions and divestitures which may harm our financial performance.
Any of these events could not only affect our financial performance, but also adversely affect our brand and reputation. Difficulty in obtaining and protecting our intellectual property, and the risk of infringement claims by others may negatively impact our financial performance.
At times, both our Global Ecommerce and Presort Services segments have experienced increased demand and competition for labor, especially for our warehouses, driving up costs.
The rapid growth of the ecommerce industry has resulted in ongoing competition for employees in the shipping, transportation, and logistics industry, including drivers and warehouse employees. At times, our Presort Services segment has experienced increased demand and competition for labor, especially for our facilities, driving up costs.
From an environmental perspective, the impact of climate change and a potential increase in extreme weather events may pose risk to the operation of our sortation facilities and the ability to transport mail and packages.
From an environmental perspective, the impact of climate change and a potential increase in severe weather events may pose risk to the operation of our sortation facilities, while changes in regulation relating to climate change and other aspects of ESG, including different regulatory requirements in different locations where we operate, may change the cost of compliance for, among other things, collecting, assuring and reporting information regarding our ESG impacts and risk management.
If these challenges interfere with these posts’ ability to continue to provide the services they currently provide, our financial performance may be adversely affected. Our ability to compete in the package shipping market in the United States depends upon certain contractual relationships we have with the USPS and the successful performance of those services.
Our ability to compete in the shipping market in the United States depends upon certain contractual relationships we have with the USPS and other carriers, as well as their service. Our SendTech Solutions offerings depend upon certain contractual relationships with the USPS and other carriers to enable us to offer these services profitably.
Despite the fact that we continually implement and update measures to enhance our cybersecurity protections and minimize the impact of any potential attack, none of these measures are fool proof and like all companies, intrusions will occur, and have occurred in the past (e.g. the previously disclosed ransomware attacks we experienced 11 in 2019 and 2020).
Despite the implementation of our cybersecurity processes, our security measures cannot guarantee that a significant cyberattack will not occur. The Company and our suppliers have experienced certain cybersecurity incidents in the past (e.g. the previously disclosed ransomware attacks we experienced in 2019 and 2020). Our goal is to prevent meaningful incursions and minimize the overall impact of those that occur.
Their ability to provide high quality service at affordable rates in turn depends upon their ongoing financial strength. Although Congress provided the USPS a measure of relief with the enactment of the Postal Service Reform Act of 2022, the USPS, and national posts in our other major markets, still face financial challenges.
Their ability to provide high quality reliable service at affordable rates relates to their ongoing financial strength. The USPS and other national posts continue to face financial challenges which could lead to changes in governance models. If these challenges or changes interfere with these posts’ ability to provide the services they currently provide, our financial performance may be adversely affected.
From a “social” perspective, a failure to meet employee expectations around safety and diversity, equity and inclusion could impact our ability to recruit new employees and retain talent.
There are also a series of laws related to product stewardship and waste disposal to which we need to comply. From a “social” perspective, a failure to meet employee expectations could impact our ability to recruit new employees and retain talent, and failure to manage any reputational risks associated with social or environmental matters could negatively impact our business.
Within the last four years, the United States increased tariffs for certain goods, which triggered other nations to also increase tariffs on certain of their goods. For our Global Ecommerce segment, tariff increases, or even an environment of uncertainty surrounding trade issues, could reduce demand and adversely affect its financial performance.
Our operations and financial performance may be negatively affected by changes in trade policies, tariffs and regulations. In recent years, the United States increased tariffs for certain goods, which triggered other nations to also increase tariffs on certain of their goods. These increased tariffs resulted in additional costs on certain components used in some of our SendTech products.
Removed
The USPS is our primary provider for the “last mile” component of our parcel delivery services in the United States. This represents a significant component of our cost in offering these services.
Added
If new product and service offerings are not approved or there are significant conditions to approval, our ability to grow the business and in turn, our financial performance, could be adversely affected.
Removed
If we are unable to receive competitive pricing from the USPS or take advantage of lower cost USPS options, our ability to compete with private carriers and achieve profitable revenue growth may be adversely affected.
Added
Should the USPS or other carriers make changes to how they contract with us for our solutions, our profitability could be adversely affected. 7 Business Operational Risks The markets for our products and services are highly competitive.
Removed
Our digital delivery options also depend upon certain contractual relationships with the USPS to enable us to offer these services profitably, and the USPS has adjusted the terms of those contracts in the past. Should the USPS make additional changes to how it contracts with us for this service, our profitability could be adversely affected.
Added
Failure to successfully execute on our strategic initiatives could cause our future financial results to suffer. We have implemented or are implementing various strategic initiatives to further increase our profitability, including the Global Ecommerce exit, cost rationalization, cost optimization, and balance sheet deleveraging initiatives. If we are not able to successfully complete these initiatives, our future financial results may suffer.
Removed
The quality of service we provide to our clients also depends upon the quality of delivery services received from the USPS.
Added
As we continue to transition our business to more software and service-based offerings, patent protection of these innovations will be more difficult to obtain. As a result, we will rely more on copyrights and, when appropriate, trade secret protection for those software and service-based offerings.
Removed
As the ecommerce market continues to evolve, and as the USPS implements changes to its network, if the USPS’ service performance is materially worse than that of the private carriers, we may lose clients to competition and our financial performance may be adversely affected. We are subject to postal regulations and processes, which could adversely affect our financial performance.
Added
For example, many of the benefits and synergies we anticipated from our acquisitions of businesses which previously comprised our Global Ecommerce reporting segment, did not materialize. As a result, in the third quarter of 2024, we entered into a series of transactions designed to facilitate an orderly wind-down of a majority of this reporting segment.
Removed
The markets for our products and services in each of our segments are highly competitive. In our Global Ecommerce segment, we face competition from full-service ecommerce business process outsourcers, online marketplaces, freight forwarders, posts, and major global delivery services companies, including those that can offer both domestic and cross-border solutions in a single package.
Added
Our capital investments to develop new products and offerings may not yield the anticipated benefits. We make significant capital investments in new products and services to meet the evolving needs of our customers, improve and grow our business and remain competitive.
Removed
If we cannot compete successfully in these markets with, among other things, speed of delivery, price, reliability, functionality and scalability of our platform and logistic services and ease of integration and use, we may lose clients, incur additional costs and suffer from reduced margins, and the financial results of the segment may be adversely affected.
Added
On August 8, 2024, we entered into a series of transactions designed to facilitate an orderly wind-down of a majority our Global Ecommerce reporting segment, including a sale of 81% of the voting interests of DRF Logistics, LLC (“DRF Logistics”), which owned a majority of the Global Ecommerce segment’s net assets and operations (the “GEC Sale”).
Removed
If we cannot increase our volumes while at the same time reduce our costs, our overall profitability could be adversely affected. As our businesses shift to more digital and shipping-related services, the relative revenue contribution from our shipping-related offerings now exceeds that of the revenue from our mailing-related offerings.
Added
Subsequent to the GEC Sale, DRF Logistics and DRF LLC, a subsidiary of DRF Logistics (together, the “Ecommerce Debtors”), at the direction of their own governing bodies, filed petitions to commence Chapter 11 bankruptcy cases, which we refer to, together with the GEC Sale and any associated transactions as the “Ecommerce Restructuring.” The Ecommerce Restructuring culminated in the filing of the Ecommerce Debtors’ Third Amended Joint Plan of Liquidation (the “Plan”), which outlined the proposed treatment of all claims against the Ecommerce Debtors.
Removed
We expect the revenue contribution from shipping-related services to continue to grow; however, profit margins on these services are lower than those for our mailing-related offerings. As a result, we need to achieve higher dollars of revenue to generate the same dollars of profit that we generate in our mailing businesses.
Added
In addition, the Plan incorporated the terms of a master settlement agreement by and between the Company and the Ecommerce Debtors (the “Settlement Agreement”), which effected the settlement and release of any and all claims the Ecommerce Debtors held against the Company.
Removed
Accordingly, if we cannot continue to grow package volumes and gain additional economies of scale, and in turn, improve margins and profitability, our short and long-term financial performance may be adversely affected.
Added
The Plan also afforded parties with claims that could potentially be asserted against both the Company and the Ecommerce Debtors (as opposed to claims against the Ecommerce Debtors alone), the opportunity to receive enhanced treatment in exchange for a voluntary release of the Company.
Removed
Seasonality of the Global Ecommerce segment, unexpected declines in consumer demand or the performance of our retail customers, or unexpected spikes in the costs of labor or transportation, especially during the fourth quarter, could adversely affect our overall performance. Our Global Ecommerce segment derives the majority of its revenue from retail clients.
Added
The Plan provides that such parties who do not opt for enhanced treatment retain the right to pursue claims (if any) against the Company (the “Remaining Claims”). 9 On November 25, 2024, the Bankruptcy Court entered an order (the “Confirmation Order”), among other things, confirming the Plan.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, the Company’s Privacy and Cybersecurity Steering committee, which is co-led by the CISO and the VP of Product Security and comprised of leaders from the Company’s information technology, innovation, legal and internal audit organizations, meets periodically to ensure the overall Cybersecurity Program is progressing against its goals and new risks are operationally prioritized.
Biggest changeIt ensures that the cybersecurity program in the business unit is progressing against its goals and new risks are operationally prioritized. In addition, the CISO meets with leaders from the Company's legal, IT, and internal audit organizations to ensure alignment with privacy, regulations, legal compliance and audit plans.
A report of its findings is distributed to certain members of management and completion of the auditor's comments is tracked and reported up to the Audit Committee of the Board. We also engage third-party service providers to conduct evaluations of our security controls, whether through penetration testing, independent audits or consulting on best practices to address new challenges.
A report of its findings is distributed to certain members of management and completion of the auditor's comments is tracked and reported up to the Audit Committee. We also engage third party service providers to conduct evaluations of our security controls, whether through penetration testing, independent audits or consulting on best practices to address new challenges.
These evaluations include testing both the design and operational effectiveness of security controls. Assessing, identifying, and managing cybersecurity related risks are integrated into our overall enterprise risk management (ERM) process. Cybersecurity related risks are included in the risk universe that our ERM process evaluates to assess top risks to the enterprise on an annual basis.
These evaluations include testing both the design and operational effectiveness of security controls. 13 Assessing, identifying, and managing cybersecurity related risks are integrated into our overall enterprise risk management (ERM) process. Cybersecurity related risks are included in the risk universe that our ERM process evaluates to assess top risks to the enterprise on an annual basis.
The Audit Committee of the Board of Directors oversees the technology functions, including management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives.
The Audit Committee of the Board of Directors oversees the Company's technology functions, including management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives.
For select suppliers, we engage third-party cybersecurity monitoring and alerting services, and seek to work directly with those suppliers to address potential deficiencies identified. Given the constantly evolving cyber-threat landscape, as well as the previously disclosed ransomware attacks we experienced in 2019 and 2020, we continuously test and evolve our cybersecurity program.
For select partners, we engage third party cybersecurity monitoring and alerting services, and seek to work directly with those partners to address potential deficiencies identified. Given the constantly evolving cyber-threat landscape, as well as the previously disclosed ransomware attacks we experienced in 2019 and 2020, we continuously test and evolve our cybersecurity program.
The information security organization manages and continually enhances a robust enterprise security structure with the goal of preventing cybersecurity incidents to the extent feasible, while simultaneously increasing our system resilience in an effort to minimize the business impact should an incident occur. Our cybersecurity program attempts to follow the National Institute of Standards and Technology (NIST) Cybersecurity Framework principles.
The information security organization manages and continually enhances an enterprise security structure with the goal of preventing cybersecurity incidents to the extent feasible, while simultaneously increasing our system and product resilience in an effort to minimize the business impact should an incident occur. Our cybersecurity program attempts to follow the National Institute of Standards and Technology (NIST) Cybersecurity Framework principles.
To the extent the ERM process identifies a heightened cybersecurity related risk, risk owners are assigned to develop risk mitigation plans, which are then tracked to completion. The ERM process annual risk assessment is presented to the Audit Committee of the Board of Directors.
To the extent the ERM process identifies a heightened cybersecurity related risk, risk owners are assigned to develop risk mitigation plans, which are then tracked to completion. The ERM process annual risk assessment is presented to the Audit Committee.
Where possible, we endeavor to include information security provisions, audit rights and insurance requirements, in contracts with our suppliers and third-parties based on their level of access to our systems and data. For our most critical suppliers, where possible, we attempt to pursue an annual attestation of ongoing compliance to our standard policies and practices.
Where possible, we include information security provisions, audit rights and insurance requirements, in contracts with these partners based on their level of access to our systems and data. For our most critical partners, where possible, we attempt to pursue an annual attestation of ongoing compliance to our standard policies and practices.
Mission critical information assets, those that would cause significant business, customer, or employee impact, are periodically presented by technical leadership to the appropriate senior management executive. This is a formal assessment which describes the underlying cyber posture, mitigation plan, and commitments.
Technical leadership periodically presents an assessment of mission critical information assets, those that would cause significant business, customer, or employee impact to the appropriate senior management executives. This is a formal assessment which describes the underlying cyber posture, mitigation plan, and commitments.
Employees outside of our corporate information security organization also have a role in our cybersecurity defenses 14 and they are immersed in a corporate culture and periodic training, supportive of security, which we believe improves our overall cybersecurity posture. We have also extended our cybersecurity governance to our operational business executives.
Employees outside of our information security organization also have a role in our cybersecurity defenses and are required to receive periodic cybersecurity training, which we believe improves our overall cybersecurity posture. We have also extended our cybersecurity governance to our operational business executives.
In the event of an incident, we strive to follow our detailed incident response playbook, which outlines the steps to be taken from incident detection to mitigation, recovery and notification, including notifying functional areas (e.g. legal), customers, as well as senior leadership and the Board, in each case, as appropriate.
In the event of an incident, we strive to follow our detailed incident response playbook, which outlines the steps to be taken from incident detection to mitigation, recovery, escalation to senior management, the Board of Directors, and functional areas, and notification to customers and employees as appropriate.
We rely heavily on third parties to support our products, business operations and technology services, and a cybersecurity incident at a supplier, subcontractor or partner could materially adversely impact us.
We rely heavily on third party partners (i.e. suppliers, subcontractors, consultants, etc.) to support our products, business operations and technology services, and a cybersecurity incident at a partner could materially adversely impact us.
These cybersecurity threats and related risks make it imperative that we expend considerable resources to safeguard our organization’s assets and to prevent service disruptions or minimize the impact should an incident occur.
These cybersecurity threats and related risks make it imperative that we expend considerable resources to safeguard our organization’s assets and to prevent service disruptions or minimize the impact should an incident occur. Our processes for assessing, identifying, and managing material risks from cyberecurity threats are described below. These cybersecurity risk managment processes are integrated into our overall risk management system.
We have adopted a risk-based management process used to define, manage, and prioritize controls required to maintain the integrity and availability of our digital assets.
We also strive to maintain ISO certification and assurance reporting under AICPA SOC2 for several of our systems and products. We have adopted a risk-based management process to define, manage, and prioritize controls required to maintain the integrity and availability of our digital assets.
Senior technology leadership, including our Chief Information Security Officer (CISO), briefs the Audit Committee of the Board of Directors on our cybersecurity and information security posture semi-annually and on an as needed basis and the full Board of Directors is apprised on an annual basis.
Senior technology leadership, including our Chief Information Security Officer (CISO), briefs the Audit Committee and the full Board of Directors on our cybersecurity and information security posture on a regular cadence. In addition to this regular reporting, cybersecurity risks or threats may also be escalated to the Audit Committee on an as-needed basis.
Notwithstanding the cybersecurity protections we have in place, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. See Item 1A. “Risk Factors” for a discussion of cybersecurity risks.
The Company and its service providers have experienced cyberattacks in the past, which the Company believes have thus far been mitigated by preventative, detective, and responsive measures put in place. Notwithstanding the cybersecurity protections we have in place, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
Our information security organization is led by the CISO, who is responsible for our overall information security strategy, policy, security engineering, operations and cyber threat detection and response. The Vice President of Product Security (VP of Product Security) provides additional expertise and focus attempting to ensure the integrity and resiliency of the products and services we provide to our customers.
Our information security organization is led by the CISO, who is responsible for our overall information security strategy, policy, security engineering, product security, operations and cybersecurity threat detection and response. The CISO has 32 years of experience serving in various information technology roles.
Removed
Combined, the CISO and VP of Product Security possess over 50 years of deep information technology, cyber security, program management, and risk experience.
Added
As of the date of this report, the Company has not identified any cybersecurity threats that have materially affected or are reasonably likely to have a material effect on the organization.
Added
See Item 1A. “Risk Factors” for a discussion of cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeShould any facility be unable to function as intended for an extended period of time, our ability to service our clients and operating results could be impacted. We conduct our research and development activities in facilities located in Noida and Pune, India, Bielsko-Biala, Poland, Austin, Texas and Shelton, Connecticut.
Biggest changeThis facility is significant as it stores a majority of the SendTech Solutions products, supplies and inventories. Should any facility be unable to function as intended for an extended period of time, our ability to service our clients and operating results could be impacted.
Management believes that our facilities are in good operating condition, materially utilized and adequate for our current business needs. ITEM 3. LEGAL PROCEEDINGS See Note 15 Commitments and Contingencies to the Consolidated Financial Statements for additional information. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 15 PART II
We conduct our research and development activities in facilities located in Noida and Pune, India, Bielsko-Biala, Poland and Shelton, Connecticut. Management believes that our facilities are in good operating condition, materially utilized and adequate for our current business needs. ITEM 3. LEGAL PROCEEDINGS See Note 16 Commitments and Contingencies to the Consolidated Financial Statements for additional information. ITEM 4.
ITEM 2. PROPERTIES We lease numerous facilities worldwide, including administrative offices, fulfillment centers, parcel operations and mail sortation facilities, service locations, data centers and call centers. Our corporate headquarters is located in Stamford, Connecticut. Our Global Ecommerce segment leases three fulfillment centers that comprise the majority of our fulfillment operations.
ITEM 2. PROPERTIES We lease numerous facilities worldwide, including administrative offices, mail sortation facilities, service locations, data centers and call centers. Our corporate headquarters is located in Stamford, Connecticut. Our Presort Services segment conducts mail sortation operations through a network of 33 operating centers throughout the United States. Our SendTech Solutions segment leases a manufacturing and distribution facility in Indiana.
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Our Global Ecommerce and Presort Services segments conduct parcel operations and mail sortation operations through a network of approximately 45 operating centers throughout the United States. Our SendTech Solutions segment leases a manufacturing and distribution facility in Indianapolis. This facility is significant as it stores a majority of the SendTech Solutions products, supplies and inventories.
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MINE SAFETY DISCLOSURES Not applicable. 14 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+4 added−3 removed0 unchanged
Biggest changeAll information is based upon data independently provided to us by Standard & Poor's Corporation and is derived from their official total return calculation. Total return for the S&P SmallCap 600 Composite Index and our peer group is based on market capitalization, weighted for each year. The stock price performance is not necessarily indicative of future stock price performance.
Biggest changeTotal return for the S&P SmallCap 600 Composite Index and our peer group is based on market capitalization, weighted for each year. The stock price performance is not necessarily indicative of future stock price performance. ITEM 6. [RESERVED] 16
Our peer group for 2023 is comprised of: ACCO Brands Corporation, Avery Dennison Corporation, Cimpress plc, Bread Financial Holdings, Inc., Deluxe Corporation, Diebold Nixdorf, Incorporated, Etsy, Inc., Fidelity National Information Services, Inc., Fiserv, Inc., GXO Logistics, Inc., Hub Group, Inc., NCR Corporation, Overstock.com, Inc., Rockwell Automation, Inc., Ryder System, Inc., Schneider National, Inc., The Western Union Company, W.W.
Our peer group for 2023 was comprised of: ACCO Brands Corporation, Avery Dennison Corporation, Cimpress plc, Bread Financial Holdings, Inc., Deluxe Corporation, Diebold Nixdorf, Incorporated, Etsy, Inc., Fidelity National Information Services, Inc., Fiserv, Inc., GXO Logistics, Inc., Hub Group, Inc., NCR Corporation, Overstock.com, Inc., Rockwell Automation, Inc., Ryder System, Inc., Schneider National, Inc., The Western Union Company, W.W.
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is principally traded on the New York Stock Exchange (NYSE) under the symbol "PBI". At January 31, 2024, we had 11,860 common stockholders of record. Dividends and Share Repurchases We have historically paid a quarterly dividend to our shareholders.
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is principally traded on the New York Stock Exchange (NYSE) under the symbol "PBI". At January 31, 2025, we had 11,333 common stockholders of record. Dividends and Share Repurchases We have historically paid a quarterly dividend to our shareholders.
Stock Performance Graph The accompanying graph shows the annual change in the value of a $100 investment in Pitney Bowes Inc., the Standard and Poor's (S&P) SmallCap 600 Composite Index and a peer group over a five-year period assuming the reinvestment of dividends.
Grainger, Inc. and Xerox Holdings Corporation. The accompanying graph shows the annual change in the value of a $100 investment in Pitney Bowes Inc., the Standard and Poor's (S&P) SmallCap 600 Composite Index and a peer group over a five-year period assuming the reinvestment of dividends.
We expect to continue to pay a quarterly dividend of $0.05 per share; however, our Board of Directors may decide to increase or decrease this amount or to not approve the payment of a dividend at any time.
We expect to continue to pay a quarterly dividend; however, our Board of Directors may decide to increase, decrease or not approve the payment of a dividend at any time. In February 2025, our Board of Directors increased the quarterly dividend to $0.06 per share.
Grainger, Inc. and Xerox Holdings Corporation. On a total return basis, a $100 investment on December 31, 2018, in Pitney Bowes Inc., the S&P SmallCap 600 Composite Index, and our peer group would have been worth $93, $169 and $144 respectively, on December 31, 2023.
On a total return basis, a $100 investment on December 31, 2019, in Pitney Bowes Inc., the S&P SmallCap 600 Composite Index, our new peer group and our old peer group would have been worth $223, $149, $63 and $131 respectively, on December 31, 2024.
We may repurchase shares of our common stock to manage the dilution created by shares issued under employee stock plans and for other purposes. We did not repurchase any additional shares of our common stock in 2023.
We may also repurchase shares of our common stock to manage the dilution created by shares issued under employee stock plans and for other purposes. We did not repurchase any shares in 2024. Stock Performance Graph We revised our peer group from last year to include companies to align with our changing business offerings.
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Each quarter, our Board of Directors considers our recent and projected earnings and other capital needs and priorities in deciding whether to approve a dividend.
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On February 11, 2025, our Board of Directors authorized a new $150 million share repurchase program. In connection with the new share repurchase program, the Board of Directors terminated and replaced our prior share repurchase program authorized on February 4, 2019.
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Our peer group consists of publicly traded companies similar in size and/or complexity that best align with our current businesses. The composition of our peer group is the result of the Compensation Committee's independent compensation consultant's recommendations. As such, the composition of our peer group could change year-over year.
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Purchases by the Company under the new share repurchase program may be made from time to time in open market or private transactions in such manner as may be deemed advisable from time to time (including, without limitation, pursuant to one or more 10b5-1 trading plans, accelerated share repurchase programs, and any other method that the Company may deem advisable) and may be discontinued at any time.
Removed
Our 2023 peer group was updated from 2022 to include one additional company. The inclusion of this company did not impact the total shareholder return of our peer group.
Added
Our new peer group is comprised of: ACCO Brands Corporation, Bread Financial Holdings, Inc., Cimpress plc, CSG Systems International, Inc., Deluxe Corporation, Diebold Nixdorf, Incorporated, E2open Parent Holdings, Inc., HNI Corporation, Matthews International Corporation, McGrath RentCorp, Quad/Graphics, Inc., Sabre Corporation, TTEC Holdings, Inc. and Unisys Corporation.
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The composition of our peer group is developed by our Compensation Committee based on recommendations from their independent compensation consultant. 15 The above graph was determined by an independent third party.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

53 edited+49 added−44 removed14 unchanged
Biggest changeThis decrease was primarily driven by lower professional fees of $10 million, salaries of $8 million, credit cards fees of $8 million, amortization expense of $8 million and stock based compensation expense of $7 million, partially offset by proxy solicitation fees of $11 million, higher variable compensation expense of $9 million, higher credit loss provision of $8 million and non-cash foreign currency revaluation losses on intercompany loans of $6 million. • Restructuring charges increased $43 million compared to the prior year driven by actions taken under the 2023 Plan. • Aggregate non-cash goodwill impairment charges totaling $339 million associated with our Global Ecommerce reporting unit.
Biggest changeThis decrease was primarily driven by lower credit card fees of $10 million, lower professional and outsourcing fees of $8 million, lower salary expense of $5 million and lower marketing expenses of $5 million, partially offset by proxy solicitation fees of $11 million, higher credit loss provision of $7 million and non-cash foreign currency revaluation losses on intercompany loans of $6 million. • Restructuring charges increased $35 million compared to the prior year driven by actions taken under the 2023 Plan. • A goodwill impairment charge of $124 million associated with certain operations of the former Global Ecommerce segment that were sold or dissolved prior to 2024 and did not qualify for discontinued operations treatment. • Interest expense, net, including financing interest expense, increased $23 million in 2023 compared to the prior year primarily due to higher interest rates. • Other income declined $14 million compared to the prior year primarily driven by prior year gains of $22 million from the sale of assets and businesses, partially offset by a favorable year-over-year impact of $8 million associated with the redemption of debt.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The following discussion of our financial condition and operating results should be read in conjunction with our risk factors, consolidated financial statements and related notes. This discussion includes forward-looking statements based on management's current expectations, estimates and projections and involves risks and uncertainties.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion of our financial condition and operating results should be read in conjunction with our risk factors, consolidated financial statements and related notes. This discussion includes forward-looking statements based on management's current expectations, estimates and projections and involves risks and uncertainties.
We provide an allowance for credit losses based on historical loss experience, the age of the receivables, specific troubled accounts and other currently available information. Accounts deemed uncollectible are written off against the allowance after all collection efforts have been exhausted and management deems the account to be uncollectible, or when they are 365 days past due, if sooner.
We provide an allowance for expected credit losses based on historical loss experience, the age of the receivables, specific troubled accounts and other currently available information. Accounts deemed uncollectible are written off against the allowance after all collection efforts have been exhausted and management deems the account to be uncollectible, or when they are 365 days past due, if sooner.
Significant judgment is also required in determining the amount of deferred tax assets that will ultimately be realized and corresponding deferred tax asset valuation allowance. When estimating the necessary valuation allowance, we consider all available evidence for each jurisdiction including historical operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies.
Significant judgment is also required in determining the amount of deferred tax assets that will ultimately be realized and corresponding deferred tax asset valuation allowance. When estimating the necessary valuation allowance, we consider all available evidence for each jurisdiction including historical operating results, estimates of future taxable income and the feasibility of tax planning strategies.
Unallocated corporate expenses primarily represents corporate administrative functions such as finance, marketing, human resources, legal, information technology, and research and development.
Corporate expenses primarily represents corporate administrative functions such as finance, marketing, human resources, legal, information technology, and research and development.
Legal and Regulatory Matters See Regulatory Matters in Item 1 and Other Tax Matters in Note 14 to the Consolidated Financial Statements for regulatory matters regarding our tax returns and Note 15 to the Consolidated Financial Statements for information regarding our legal proceedings. Foreign Currency Exchange The functional currency for most of our foreign operations is the local currency.
Legal and Regulatory Matters See Regulatory Matters in Item 1 and Other Tax Matters in Note 15 to the Consolidated Financial Statements for regulatory matters regarding our tax returns and Note 16 to the Consolidated Financial Statements for information regarding our legal proceedings. Foreign Currency Exchange The functional currency for most of our foreign operations is the local currency.
Financial performance for the Presort Services segment was as follows: Years Ended December 31, Favorable/(Unfavorable) 2023 2022 Actual % Change Constant Currency % change Business Services Revenue $ 617,599 $ 602,016 3 % 3 % Cost of Business Services 432,229 454,923 5 % Gross Margin 185,370 147,093 26 % Gross Margin % 30.0 % 24.4 % Selling, general and administrative 74,230 64,517 (15) % Other components of net pension and postretirement costs 228 146 (56) % Adjusted segment EBIT $ 110,912 $ 82,430 35 % Revenue increased $16 million in 2023 compared to the prior year as pricing actions to mitigate inflationary pressures on costs offset the revenue decline driven by a 6% decrease in total mail volumes.
Years Ended December 31, Favorable/(Unfavorable) 2023 2022 Actual % Change Constant Currency % change Business Services Revenue $ 617,599 $ 602,016 3 % 3 % Cost of Business Services 432,229 454,923 5 % Gross Margin 185,370 147,093 26 % Gross Margin % 30.0 % 24.4 % Selling, general and administrative 74,230 64,517 (15) % Other components of net pension and postretirement costs 228 146 (56) % Adjusted segment EBIT $ 110,912 $ 82,430 35 % Revenue increased $16 million in 2023 compared to the prior year as pricing actions to mitigate inflationary pressures on costs offset the revenue decline driven by a 6% decrease in total mail volumes.
However, gross margin percentage increased to 65.1% from 62.8% compared to the prior year driven by improvements in business services gross margin due to growth in enterprise shipping subscriptions, rentals gross margin due in part to a $2 million prior year unfavorable scrap adjustment and a current year favorable adjustment and equipment sales gross margin due to cost management.
However, gross margin percentage increased to 65.8% from 58.8% compared to the prior year driven by improvements in business services gross margin due to growth in enterprise shipping subscriptions, rentals gross margin due in part to a $2 million prior year unfavorable scrap adjustment and a current year favorable adjustment and equipment sales gross margin due to cost management.
Declines in estimated residual values considered "other-than-temporary" are recognized immediately. Increases in estimated future residual values are not recognized until the equipment is remarketed. If the actual residual value of leased assets were 10% lower than management's current estimates and considered "other-than-temporary", pre-tax income would be $5 million lower.
Increases in estimated future residual values are not recognized until the equipment is remarketed. If the actual residual value of leased assets were 10% lower than management's current estimates and considered "other-than-temporary", pre-tax income would be $4 million lower.
Off Balance Sheet Arrangements At December 31, 2023, we had approximately $28 million outstanding letters of credit guarantees with financial institutions that are primarily issued as security for insurance, leases, customs and other performance obligations.
Off Balance Sheet Arrangements At December 31, 2024, we had approximately $30 million outstanding letters of credit guarantees with financial institutions that are primarily issued as security for insurance, leases, customs and other performance obligations.
We believe that existing cash and investments, cash generated from operations and borrowing capacity under our $500 million revolving credit facility will be sufficient to fund our cash needs for the next 12 months.
At this time, we believe that existing cash and investments, cash generated from operations and borrowing capacity under our revolving credit facility will be sufficient to fund our cash needs for the next 12 months.
Equipment sales declined $31 million primarily due to customers opting to extend leases of their existing advanced-technology equipment rather than purchase new equipment. Support services revenue declined $27 million primarily due to the declining meter population and continuing shift to cloud-enabled products. Supplies revenue declined $6 million primarily driven by a declining meter population.
Support services revenue declined $36 million primarily due to the declining meter population and continuing shift to cloud-enabled products. Equipment sales declined $36 million primarily due to customers opting to extend leases of their existing advanced-technology equipment rather than purchase new equipment.
The allowance for credit losses as a percentage of trade accounts receivables was 2% at both December 31, 2023 and 2022. Holding all other assumptions constant, a 0.25% increase in the allowance rate at December 31, 2023 would have reduced pre-tax income by $1 million.
The allowance for credit losses as a percentage of trade accounts receivables was 5% and 3% at December 31, 2024 and 2023, respectively. Holding all other assumptions constant, a 0.25% increase in the allowance rate at December 31, 2024 would have reduced pre-tax income by less than $1 million.
SG&A expenses declined $13 million primarily driven by lower outsourcing and professional fees of $5 million, lower rent expense of $3 million and lower marketing expenses of $1 million.
SG&A expenses declined $21 million primarily driven by lower credit card fees of $8 million, lower outsourcing and professional fees of $5 million, lower rent expense of $3 million and lower marketing expenses of $1 million.
This decline was driven by lower earnings, higher interest payments of $30 million, higher restructuring payments of $19 million and higher pension contributions of $7 million, partially offset by higher collections of accounts receivables and finance receivables of $33 million, lower inventory purchases of $19 million and changes in other working capital items.
This decline was driven by lower earnings, higher interest payments of $30 million, higher restructuring payments of $19 million and higher pension contributions of $7 million, partially offset by changes in other working capital items.
Adjusted segment EBIT was a loss of $134 million in 2023 compared to a loss of $100 million in the prior year. 19 Presort Services We are the largest workshare partner of the USPS and national outsource provider of mail sortation services that allow clients to qualify large volumes of First Class Mail, Marketing Mail, and Marketing Mail Flats and Bound Printed Matter for postal worksharing discounts.
Adjusted segment EBIT was $408 million in 2023 compared to $402 million for the prior year. 21 Presort Services Presort Services is the largest workshare partner of the USPS and national outsource provider of mail sortation services that allow clients to qualify large volumes of First Class Mail, Marketing Mail, and Marketing Mail Flats/Bound Printed Matter for postal worksharing discounts.
Changes in the value of the U.S. dollar relative to the currencies of countries in which we operate impact our reported assets, liabilities, revenue and expenses. Exchange rate fluctuations can also impact the settlement of intercompany receivables and payables between our subsidiaries in different countries.
Changes in the value of the U.S. dollar relative to the currencies of countries in which we operate impact our reported assets, liabilities, revenue and expenses. Exchange rate fluctuations can also impact the settlement of intercompany receivables and payables between our subsidiaries in different countries. During 2024, 16% of our consolidated revenue was from operations outside the United States.
Financing revenue declined $3 million primarily due to $6 million of lower lease extensions and lower late fees of $1 million, partially offset by higher investment income of $7 million.
Financing revenue declined $3 million primarily due to $6 million of lower lease extensions and lower late fees of $1 million, partially offset by higher investment income of $7 million. Gross margin decreased $19 million primarily due to the decline in revenue.
Holding all other assumptions constant, a 0.25% increase in the allowance rate at December 31, 2023 would have reduced pre-tax income by $3 million. Trade accounts receivable are generally due within 30 days after the invoice date.
Total allowance for credit losses as a percentage of finance receivables was 2% at both December 31, 2024 and 2023. Holding all other assumptions constant, a 0.25% increase in the allowance rate at December 31, 2024 would have reduced pre-tax income by $3 million. Trade accounts receivable are generally due within 30 days after the invoice date.
Adjusted segment EBIT was $111 million in 2023 compared to $82 million in the prior year. 20 SendTech Solutions SendTech Solutions provides clients with physical and digital mailing and shipping technology solutions and other applications to help simplify and save on the sending, tracking and receiving of letters, parcels and flats, as well as supplies and maintenance services for these offerings.
SendTech Solutions SendTech Solutions provides clients with physical and digital shipping and mailing technology solutions and other applications to help simplify and save on the sending, tracking and receiving of letters, parcels and flats, as well as supplies and maintenance services for these offerings.
Investing activities Cash flows from investing activities for 2023 declined $99 million compared to the prior year primarily due to prior year proceeds of $162 million from the sale of businesses and our Shelton, Connecticut office building, partially offset by lower payments of $28 million to settle foreign exchange derivative contracts, lower capital expenditures of $22 million and lower net investment activity of $10 million.
Cash flows from investing activities for 2023 declined $100 million compared to the prior year primarily due to prior year proceeds of $162 million from the sale of businesses and our Shelton, Connecticut office building, lower cash from investment activities of $13 million, partially offset by lower cash payments of $28 million to settle foreign exchange derivative contracts, lower investments in loan receivables of $23 million and lower capital expenditures of $5 million and lower outflows from discontinued operations of $17 million.
The discount rate for our largest plan, the U.S. Qualified Pension Plan (the U.S. Plan) and our largest foreign plan, the U.K. Qualified Pension Plan (the U.K. Plan) used to determine net periodic pension expense for 2023 was 5.55% and 4.80%, respectively. The discount rate used to determine 2024 net periodic pension expense for the U.S. Plan and the U.K.
These assumptions are evaluated and updated annually. The discount rate for our largest plan, the U.S. Qualified Pension Plan (the U.S. Plan) and our largest foreign plan, the U.K. Qualified Pension Plan (the U.K. Plan) used to determine net periodic pension expense for 2024 was 5.15% and 4.50%, respectively.
Net pension expense is also based on a market-related valuation of plan assets where differences between the actual and expected return on plan assets are recognized over a five-year period.
Net pension expense is also based on a market-related valuation of plan assets where differences between the actual and expected return on plan assets are recognized over a five-year period in the U.S. and a two-year period in the U.K. Plan benefits for participants in a majority of our U.S. and foreign pension plans are frozen.
Gross margin increased $38 million and gross margin percentage increased from 24.4% to 30.0% compared to the prior year primarily due to the increase in revenue, lower transportation costs of $15 million, driven by improvements in network management, and the benefits from investments made in automation and higher-throughput sortation equipment.
The processing of Marketing Mail Flats and Bound Printed Matter and First Class Mail contributed revenue increases of $18 million and $5 million, respectively, while the processing of Marketing Mail contributed to a revenue decrease of $7 million. 22 Gross margin increased $38 million and gross margin percentage increased to 30.0% from 24.4% compared to the prior year primarily due to the increase in revenue, lower transportation costs of $15 million, driven by improvements in network management, and the benefits from investments made in automation and higher-throughput sortation equipment.
If new information becomes available that would alter our estimate of the amount of deferred tax assets that will ultimately be realized, we adjust the valuation allowance through income tax expense. Changes in the deferred tax asset valuation allowance could have a material impact on our financial condition or results of operations.
If new information becomes available that would alter our estimate of the amount of deferred tax assets that will ultimately be realized, we adjust the valuation allowance through income tax expense.
Residual value estimates impact the determination of whether a lease is classified as an operating lease or a sales-type lease. Fair value estimates of equipment at the end of the lease term are based on historical renewal experience, used equipment markets, competition and technological changes. We evaluate residual values on an annual basis or sooner if circumstances warrant.
Fair value estimates of equipment at the end of the lease term are based on historical renewal experience, used equipment markets, competition and technological changes. We evaluate residual values on an annual basis or sooner if circumstances warrant. Declines in estimated residual values considered "other-than-temporary" are recognized immediately.
Adjusted segment EBIT was $405 million in 2023 compared to $401 million for the prior year. 21 UNALLOCATED CORPORATE EXPENSES The majority of operating expenses are recorded directly or allocated to our reportable segments. Operating expenses not recorded directly or allocated to our reportable segments are reported as unallocated corporate expenses.
SG&A expenses increased $10 million primarily due to higher employee-related expenses. Adjusted segment EBIT was $111 million in 2023 compared to $82 million in the prior year. CORPORATE EXPENSES The majority of operating expenses are recorded directly or allocated to our reportable segments. Operating expenses not recorded directly or allocated to our reportable segments are reported as corporate expenses.
Financing activities Cash flows from financing activities for 2023 improved $167 million compared to the prior year primarily due to lower net cash outflows from debt activity of $68 million, an increase in customer account deposits at the Bank of $90 million and $13 million of common stock repurchases in the prior year.
Cash flows from financing activities for 2023 improved $168 million compared to the prior year primarily due to lower net debt repayments of $68 million, higher cash from changes in customer account deposits at the Bank of $90 million and $13 million of common stock repurchases in the prior year. 24 Debt Activity During 2024, we repaid $178 million of the Notes due March 2028 and made scheduled principal repayments of $56 million.
We provide an allowance for probable credit losses based on historical loss experience, the nature of our portfolios, adverse situations that may affect a client's ability to pay and current economic conditions and outlook based on reasonable and supportable forecasts. Total allowance for credit losses as a percentage of finance receivables was 2% at both December 31, 2023 and 2022.
Allowances for credit losses Finance receivables are comprised of sales-type leases, secured loans and unsecured revolving loans. We provide an allowance for expected credit losses based on historical loss experience, the nature of our portfolios, adverse situations that may affect a client's ability to pay and current economic conditions and outlook based on reasonable and supportable forecasts.
Total costs and expenses increased $175 million compared to the prior year primarily due to: • Costs of revenue (excluding financing interest expense) decreased $225 million primarily due to lower cost of business services of $178 million (see Factors Affecting Comparability above) and lower cost of equipment sales of $30 million. • SG&A expense declined $8 million compared to the prior year.
Total costs and expenses decreased $171 million compared to the prior year primarily due to the following: • Costs of revenue (excluding financing interest expense) decreased $345 million primarily due to lower cost of business services of $297 million and lower cost of equipment sales of $30 million.
The expected rate of return on plan assets used to determine net periodic pension expense for 2023 was 6.5% for the U.S. Plan and 5.26% for the U.K. Plan. The expected rate of return on plan assets used to determine 2024 net periodic pension expense was 6.7% and 5.5% for the U.S. Plan and the U.K. Plan, respectively.
A 0.25% change in the discount rate would impact the projected benefit obligation of the U.S. Plan and U.K. Plan by $16 million and $10 million, respectively. The expected rate of return on plan assets used to determine net periodic pension expense for 2024 was 6.7% for the U.S. Plan and 5.5% for the U.K. Plan.
Pension benefits The calculation of net periodic pension expense and determination of net pension obligations are dependent on assumptions and estimates relating to, among other things, the discount rate (interest rate used to discount the future estimated liability) and the expected rate of return on plan assets. These assumptions are evaluated and updated annually.
Changes in the deferred tax asset valuation allowance could have a material impact on our financial condition or results of operations. 27 Pension benefits The calculation of net periodic pension expense and determination of net pension obligations are dependent on assumptions and estimates relating to, among other things, the discount rate (interest rate used to discount the future estimated liability) and the expected rate of return on plan assets.
Plan was 5.15% and 4.5%, respectively. A 0.25% change in the discount rate would not materially impact annual pension expense for the U.S. Plan or the U.K. Plan. A 0.25% change in the discount rate would impact the projected benefit obligation of the U.S. Plan and U.K. Plan by $24 million and $13 million, respectively.
The discount rate used to determine 2025 net periodic pension expense for the U.S. Plan and the U.K. Plan was 5.65% and 5.45%, respectively. A 0.25% change in the discount rate would not materially impact annual pension expense for the U.S. Plan or the U.K. Plan.
Net loss for 2023 was $386 million compared to net income of $37 million in the prior year. 18 SEGMENT RESULTS Management measures segment profitability and performance by deducting from segment revenue the related costs and expenses attributable to the segment. Segment results exclude interest, taxes, unallocated corporate expenses, restructuring charges, and other items not allocated to a business segment.
Prior periods have been recast to conform to the current segment presentation. Management measures segment profitability and performance by deducting from segment revenue the related costs and expenses attributable to the segment. Segment results exclude interest, taxes, corporate expenses, restructuring charges, and other items not allocated to a business segment.
In general, we would only be liable for the amount of these guarantees in the event of default in the performance of our obligations, the probability of which we believe is remote. 24 Critical Accounting Estimates The preparation of our financial statements in conformity with GAAP requires management to make estimates and assumptions about certain items that affect the reported amounts of assets, liabilities, revenues, expenses and accompanying disclosures, including the disclosure of contingent assets and liabilities.
Outstanding letters of credit reduce the amount we can borrow under our revolving credit facility. 26 Critical Accounting Estimates The preparation of our financial statements in conformity with GAAP requires management to make estimates and assumptions about certain items that affect the reported amounts of assets, liabilities, revenues, expenses and accompanying disclosures, including the disclosure of contingent assets and liabilities.
Constant Currency In the tables below, we report the change in revenue on a reported basis and a constant currency basis. Constant currency measures exclude the impact of changes in currency exchange rates from the prior period under comparison. We believe that excluding the impacts of currency exchange rates provides investors with a better understanding of the underlying revenue performance.
Constant currency measures exclude the impact of changes in currency exchange rates from the prior period under comparison. We believe that excluding the impacts of currency exchange rates provides a better understanding of the underlying revenue performance. Constant currency change is calculated by converting the current period non-U.S. dollar denominated revenue using the prior year’s exchange rate.
Financial performance for the SendTech Solutions segment was as follows: Years Ended December 31, Favorable/(Unfavorable) 2023 2022 Actual % change Constant Currency % change Business services $ 72,144 $ 71,578 1 % 1 % Support services 410,734 438,191 (6) % (6) % Financing 271,197 274,508 (1) % (1) % Equipment sales 323,739 354,960 (9) % (8) % Supplies 147,709 154,186 (4) % (4) % Rentals 67,900 66,256 2 % 2 % Total revenue 1,293,423 1,359,679 (5) % (5) % Cost of business services 29,860 37,272 20 % Cost of support services 136,821 147,653 7 % Cost of equipment sales 222,220 251,916 12 % Cost of supplies 43,140 43,537 1 % Cost of rentals 19,407 24,864 22 % Total costs of revenue 451,448 505,242 11 % Gross margin 841,975 854,437 (1) % Gross margin % 65.1 % 62.8 % Selling, general and administrative 418,213 431,213 3 % Research and development 20,660 22,646 9 % Other components of pension and post retirement costs (2,245) (331) >(100%) Adjusted Segment EBIT $ 405,347 $ 400,909 1 % SendTech Solutions revenue decreased $66 million in 2023 compared to the prior year.
Years Ended December 31, Favorable/(Unfavorable) 2023 2022 Actual % change Constant Currency % change Business services $ 106,594 $ 230,654 (54) % (54) % Support services 410,734 438,191 (6) % (6) % Financing 271,197 274,508 (1) % (1) % Equipment sales 323,739 354,960 (9) % (8) % Supplies 147,709 154,186 (4) % (4) % Rentals 67,900 66,256 2 % 2 % Total revenue 1,327,873 1,518,755 (13) % (12) % Cost of business services 32,588 157,790 79 % Cost of support services 136,821 147,654 7 % Cost of equipment sales 222,220 251,916 12 % Cost of supplies 43,140 43,537 1 % Cost of rentals 19,407 24,865 22 % Total costs of revenue 454,176 625,762 27 % Gross margin 873,697 892,993 (2) % Gross margin % 65.8 % 58.8 % Selling, general and administrative 446,079 467,243 5 % Research and development 21,772 24,363 11 % Other components of pension and post retirement costs (2,245) (331) >100% Adjusted Segment EBIT $ 408,091 $ 401,718 2 % SendTech Solutions revenue decreased $191 million in 2023 compared to the prior year.
Borrowings under our secured debt are secured by assets of the company. 23 The PB Bank (the Bank), a wholly owned subsidiary, is a member of the Federal Home Loan Bank (FHLB) of Des Moines and has access to certain credit products as a funding source known as "advances." As of December 31, 2023, the Bank had yet to apply for any advances.
The PB Bank (the Bank), a wholly owned subsidiary, is a member of the Federal Home Loan Bank (FHLB) of Des Moines and has access to certain credit products as a funding source known as "advances." As of December 31, 2024, the Bank had yet to apply for any advances. 25 Future Cash Requirements The following table summarizes our known and contractually committed cash requirements at December 31, 2024, with the exception of debt maturities, which is reflective of the debt refinancing completed in February 2025.
A 0.25% change in the expected rate of return on plan assets would impact annual pension expense for the U.S. Plan by $3 million and the U.K. Plan by $1 million. Actual pension plan results that differ from our assumptions and estimates are accumulated and amortized primarily over the life expectancy of plan participants and affect future pension expense.
Actual pension plan results that differ from our assumptions and estimates are accumulated and amortized primarily over the life expectancy of plan participants and affect future pension expense.
Our ability to maintain adequate liquidity for our operations is dependent upon a number of factors, including revenue and earnings, our ability to manage costs and improve productivity, our clients' ability to pay their balances on a timely basis and the impacts of changing macroeconomic and geopolitical conditions.
Years Ended December 31, Favorable/(Unfavorable) 2023 2022 Actual % change Corporate expenses $ 210,931 $ 204,251 (3) % Corporate expenses for 2023 increased $7 million compared to the prior year primarily due to higher variable compensation expense of $4 million and higher depreciation expense of $2 million. 23 LIQUIDITY AND CAPITAL RESOURCES Our ability to maintain adequate liquidity for our operations is dependent upon a number of factors, including our revenue and earnings, our ability to manage costs and improve productivity, our clients' ability to pay their balances on a timely basis and the impacts of changing macroeconomic and geopolitical conditions.
Business services revenue increased $14 million primarily driven by growth in enterprise shipping subscriptions, which was partially offset by a $13 million reduction in revenue due to the change in revenue presentation for digital delivery services. Gross margin decreased $12 million primarily due to the decline in revenue.
Business services revenue declined $124 million primarily driven by a $128 million reduction in revenue due to the change in revenue presentation for digital delivery services, which was partially offset by growth in enterprise shipping subscriptions. Equipment sales declined $31 million primarily due to customers opting to extend leases of their existing advanced-technology equipment rather than purchase new equipment.
The processing of Marketing Mail Flats and Bound Printed Matter and First Class Mail contributed revenue increases of $18 million and $5 million, respectively, while the processing of Marketing Mail contributed to a revenue decrease of $7 million.
The processing of First Class Mail and Marketing Mail Flats/Bound Printed Matter contributed revenue increases of $40 million and $7 million, respectively, which was partially offset by a revenue decrease from Marketing Mail of $2 million. The revenue increase includes a $5 million favorable adjustment related to prior periods. Refer to Note 1 Basis of Presentation for further information.
Required debt repayments over the next 12 months are $59 million, which we anticipate satisfying through available cash on hand and cash generated from operations. See Note 12 to the Consolidated Financial Statements for information regarding our debt. Lease obligations We lease real estate and equipment under operating and capital lease arrangements.
We estimate that cash interest payments for the next 12 months will be $140 - $150 million. See Note 13 to the Consolidated Financial Statements for information regarding our debt. Lease obligations We lease real estate and equipment under operating and capital lease arrangements. These leases have terms of up to 15 years and include renewal options.
These declines were partially offset by domestic parcel delivery revenue growth of $158 million, driven by an increase in domestic parcel volumes. Gross margin decreased $74 million and gross margin percentage decreased to 4.6% from 8.6% compared to the prior year. Cross-border services gross margin declined $52 million, primarily due to the decline in volumes.
Gross margin declined $18 million primarily due to the decline in revenue; however, gross margin percentage increased to 66.8% from 65.8% compared to the prior year. The increase in gross margin percentage was primarily driven by improvements in business services 20 gross margin due to growth in enterprise shipping subscriptions and digital delivery services.
Financial Results Summary: Years Ended December 31, Favorable/(Unfavorable) 2023 2022 Actual % Change Constant Currency % change Total revenue $ 3,266,348 $ 3,538,042 (8) % (8) % Total costs and expenses 3,672,850 3,498,162 (5) % (Loss) income before taxes (406,502) 39,880 >(100%) (Benefit) provision for income taxes (20,875) 2,940 >100% Net (loss) income $ (385,627) $ 36,940 >(100%) Revenue decreased $272 million in 2023 compared to the prior year primarily due to a decrease in business services revenue of $205 million (see Factors Affecting Comparability above), lower equipment sales of $31 million and lower support services revenue of $27 million.
See Note 4 for more information. 18 Years Ended December 31, Favorable/(Unfavorable) 2023 2022 Actual % Change Constant Currency % change Total revenue $ 2,078,925 $ 2,482,883 (16) % (16) % Total costs and expenses 2,122,845 2,294,231 7 % (Loss) income from continuing operations before income taxes (43,920) 188,652 >(100%) Provision for income taxes 17,347 42,956 60 % (Loss) income from continuing operations (61,267) 145,696 >(100%) Loss from discontinued operations, net of tax (324,360) (108,756) >(100%) Net (loss) income $ (385,627) $ 36,940 >(100%) Revenue decreased $404 million in 2023 compared to the prior year primarily due to a decrease in business services revenue of $337 million, lower equipment sales of $31 million and lower support services revenue of $27 million.
Plan benefits for participants in a majority of our U.S. and foreign pension plans are frozen. 26 Residual value of leased assets Equipment residual values are determined at the inception of the lease using estimates of the equipment's fair value at the end of the lease term.
Residual value of leased assets Equipment residual values are determined at the inception of the lease using estimates of the equipment's fair value at the end of the lease term. Residual value estimates impact the determination of whether a lease is classified as an operating lease or a sales-type lease.
Years Ended December 31, Favorable/(Unfavorable) 2023 2022 Actual % change Unallocated corporate expenses $ 210,931 $ 204,251 (3) % Unallocated corporate expenses for 2023 increased $7 million compared to the prior year primarily due to higher variable compensation expense of $4 million and higher depreciation expense of $2 million. 22 LIQUIDITY AND CAPITAL RESOURCES At December 31, 2023 we had cash, cash equivalents and short-term investments of $623 million, which includes $136 million held at our foreign subsidiaries used to support the liquidity needs of those subsidiaries.
At December 31, 2024 we had cash, cash equivalents and short-term investments of $486 million, which includes $47 million held at our foreign subsidiaries used to support the liquidity needs of those subsidiaries.
Cash Flow Summary The change in cash and cash equivalents is as follows: 2023 2022 Increase/(decrease) Net cash from operating activities $ 79,468 $ 175,983 $ (96,515) Net cash from investing activities (122,832) (24,269) (98,563) Net cash from financing activities (31,266) (198,083) 166,817 Effect of exchange rate changes on cash and cash equivalents 5,702 (16,130) 21,832 Change in cash and cash equivalents $ (68,928) $ (62,499) $ (6,429) Operating activities Cash flows from operating activities in 2023 declined $97 million compared to the prior year.
Cash Flow Summary The change in cash and cash equivalents is as follows: 2024 2023 2022 Net cash from operating activities $ 229,170 $ 80,091 $ 175,039 Net cash from investing activities (49,056) (124,096) (24,269) Net cash from financing activities (305,455) (30,002) (198,083) Effect of exchange rate changes on cash and cash equivalents (4,987) 5,731 (16,091) Change in cash and cash equivalents $ (130,328) $ (68,276) $ (63,404) Operating activities Cash flows from operating activities in 2024 improved $149 million compared to the prior year period driven primarily by a decline in finance receivables and lower payments of accounts payable and accrued liabilities.
The effective tax rate for the year ended December 31, 2023 was 5.1%, primarily due to the nondeductibility of the aggregate goodwill impairment charge. See Note 14 to the Consolidated Financial Statements for more information.
In 2023, we recorded a tax provision on a net loss from continuing operations of $44 million primarily due to the non-deductibility of the goodwill impairment charge. See Note 15 to the Consolidated Financial Statements for more information.
SG&A expenses declined $41 million compared to the prior year period, primarily due to lower employee-related expenses of $16 million, lower amortization expense of $9 million and lower credit card fees of $8 million.
SG&A expense declined $12 million, primarily driven by lower employee-related expenses of $16 million due to savings from the 2023 and 2024 Plans, lower credit loss provision of $4 million and lower expenses driven by overall cost savings initiatives, partially offset by higher professional and outsourcing fees of $13 million.
If we are unable to cure the noncompliance, amounts due under our revolving credit facility and term loan due March 2026 could be called by our lenders. At December 31, 2023, there were no outstanding borrowings under the revolving credit facility.
The Credit Agreement contains certain financial covenants. At December 31, 2024, we were in compliance with these financial covenants and there were no outstanding borrowings under the revolving credit facility. Borrowings under our Credit Agreement are secured by assets of the company.
We allocate a portion of gross interest expense to financing interest expense based on our effective interest rate and average finance receivables for the period. • Other (income) expense declined $19 million compared to the prior year primarily driven by prior year gains of $27 million from the sale of assets and businesses, partially offset by a favorable year-over-year impact of $8 million associated with the redemption of debt.
We allocate a portion of gross interest expense to financing interest expense based on our effective interest rate and average finance receivables for the period. • Other components of net pension and postretirement cost increased $97 million compared to the prior year, and includes a settlement charge of $91 million from a targeted campaign to offer lump sum settlements to vested participants. • Other expense (income) increased $92 million due to $67 million of charges related to the Ecommerce Restructuring, a $14 million increase in debt redemption/refinancing costs and a $10 million asset impairment charge.
Also, during 2023, we purchased an aggregate $39 million of the March 2024 notes and March 2027 notes, recognizing a gain of $3 million, and made scheduled principal repayments of $42 million on our term loans. The credit agreement that governs our $500 million secured revolving credit facility and the term loan due March 2026 contains certain financial covenants.
In January 2025, we repaid the remaining outstanding balance of the Notes due March 2028. In August 2024, we amended the credit agreement that governs our secured revolving credit facility and the term loan due March 2026 (the "Credit Agreement") and the note purchase agreement that governs our $275 million notes due March 2028.
Removed
A discussion of our financial condition and results of operations for the year ended December 31, 2021, can be found under Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 17, 2023.
Added
Strategic Initiatives We have been undergoing a strategic transformation over the past year, which focused on four strategic initiatives: the Ecommerce Restructuring (described in Recent Developments below); cost rationalization including identifying certain cost reductions (described in Results of Operations below) and cash optimization to reduce go-forward cash needs and balance sheet deleveraging (described in Liquidity and Capital Resources below).
Removed
OUTLOOK We expect consolidated revenue to be flat to a low single-digit decline and EBIT margins to be relatively flat in 2024 compared to 2023.
Added
Recent Developments On August 8, 2024, we entered into a series of transactions designed to facilitate an orderly wind-down of a majority the Company’s Global Ecommerce reporting segment.
Removed
Within SendTech Solutions, we expect revenue and EBIT declines due in part to lower equipment sales as initial lease terms of prior equipment sales expire and customers are expected to renew these leases for a fixed term rather than purchase new equipment. We also expect revenue to decline due to lower meter populations due to the migration to cloud-based solutions.
Added
In connection with the wind-down, an affiliate of Hilco Commercial Industrial, LLC (“Hilco”) subscribed for 81% of the voting interests in the subsidiary, DRF Logistics, LLC owning a majority of the Global Ecommerce segment’s net assets and operations (DRF Logistics, LLC and its subsidiary, DRF LLC, the “Ecommerce Debtors”) for de minimis consideration (the “GEC Sale”), with a subsidiary of Pitney Bowes retaining 19% of the voting interests and 100% of the economic interests.
Removed
These declines will be partially offset by higher shipping revenues. Within Presort Services, we anticipate total volumes to be relatively flat in 2024 compared to 2023, but revenue to benefit slightly from increased workshare discounts. We expect margin and profit to remain relatively flat to slightly higher compared to the prior year.
Added
Subsequent to the GEC Sale, the Ecommerce Debtors, at the direction of their own governing bodies, filed petitions to commence Chapter 11 bankruptcy cases and conduct an orderly wind down of the Ecommerce Debtors (the “GEC Chapter 11 Cases”). We refer to the GEC Sale, the GEC Chapter 11 Cases and any associated transactions as the “Ecommerce Restructuring”.
Removed
Within Global Ecommerce, we expect revenue growth in domestic parcel services driven by increased volumes, partially offset by lower revenue from cross-border services. We anticipate margin and profit improvements compared to 2023.
Added
In connection with the GEC Chapter 11 Cases, we entered into a Restructuring Support Agreement (the “RSA”) with the Ecommerce Debtors to provide for, among other things, an orderly wind-down of the Ecommerce Debtors, shared services between the Company and the Ecommerce Debtors for a period of time, a global settlement between the Company and the Ecommerce Debtors, and a senior secured, super-priority debtor-in-possession term loan (the “DIP Facility”) in an aggregate principal amount of up to $47 million.
Removed
We continue to make progress on our worldwide restructuring program and expect to realize annualized cost savings of $75-$85 million by the end of 2024, a portion of which was realized in 2023. However, we also expect higher interest costs and the restoration of variable compensation costs in 2024 to significantly offset these savings.
Added
In addition, the Company and the Ecommerce Debtors entered into a master settlement agreement (the “Settlement Agreement”), which contemplates the separation of the relationship and transactions among the Company and its subsidiaries and the Ecommerce Debtors, including the settlement and release of claims the Ecommerce Debtors may have against the Company.
Removed
See our Forward-Looking Statements under Part I on page 3 and Risk Factors under Item 1A for certain factors, some beyond our control, which could adversely impact our 2024 results. OVERVIEW OF CONSOLIDATED RESULTS Factors Affecting Comparability Certain transactions and changes occurred in 2022 that impact the comparability to our 2023 financial results.
Added
On November 25, 2024, the Bankruptcy Court confirmed the Ecommerce Debtors' Third Amended Joint Plan of Liquidation (the "Plan") which incorporated the terms of the RSA and approved the Settlement Agreement. On December 9, 2024, the Plan became effective in accordance with its terms, substantially consummating the separation of the Company from the Ecommerce Debtors.
Removed
These transactions and changes include: • the sale of our Borderfree cross-border ecommerce solutions business (Borderfree) in July 2022. Accordingly, reported revenue and costs for the twelve months ended December 31, 2022 include six months of revenue and costs for Borderfree.
Added
As of the end of 2024, approximately $120 million of cash costs related to the Ecommerce Restructuring have been paid. As a result of the Ecommerce Restructuring, certain revenues, expenses, assets and liabilities are now reported as discontinued operations in our Consolidated Financial Statements.
Removed
Net income of Borderfree for these periods was not significant. • a change in the presentation of revenue for digital delivery services effective October 1, 2022, from a gross basis to a net basis.
Added
Amounts of the former Global Ecommerce segment that did not qualify for discontinued operations treatment primarily relate to operations that were dissolved or sold, certain shared services functions and a cross-border services contract. Prior periods have been recast to conform to the current period presentation.
Removed
Accordingly, in 2023, revenue and costs of revenue for certain digital delivery services are reported on a net basis as business services revenue; whereas in 2022, revenue and cost of revenue for these services through September 30 were reported as business services revenue and cost of business services, respectively. The change primarily impacts our Global Ecommerce segment.
Added
For segment reporting purposes, the remaining portion of Global Ecommerce in continuing operations is now reported as "Other." See Note 4 for further information. Outlook Within SendTech Solutions, mailing-related revenues are expected to decline driven by lower meter populations and a higher mix of lease extensions versus new lease sales.
Removed
Constant 17 currency change is calculated by converting the current period non-U.S. dollar denominated revenue using the prior year’s exchange rate.
Added
We expect this decline to be partially offset by growth in our shipping offerings, particularly our SaaS solutions. The shift to lease extensions versus new lease sales will result in declining equipment sales in the near term; however, lease extensions will provide more stable and continued cash flows over the lease term.
Removed
See Note 8 to the Consolidated Financial Statements for more information. • Interest expense, net, including financing interest expense, increased $22 million in 2023 compared to the prior year primarily due to higher interest rates.
Added
Within Presort Services, we expect revenue and margin improvements due to higher revenue-per-piece and lower costs driven by the investments made in automation and technology to drive efficiencies and improve productivity. 17 RESULTS OF OPERATIONS OVERVIEW OF CONSOLIDATED RESULTS Constant Currency In the tables below, we report the change in revenue on a reported basis and a constant currency basis.
Removed
Global Ecommerce Global Ecommerce includes the revenue and related expenses from business to consumer logistics services for domestic and cross-border delivery, returns and fulfillment. Our domestic parcel services provide retailers domestic parcel delivery and returns services for its end consumers through our nationwide parcel sortation centers and transportation network.
Added
Financial Results Summary: Years Ended December 31, Favorable/(Unfavorable) 2024 2023 Actual % Change Constant Currency % change Total revenue $ 2,026,598 $ 2,078,925 (3) % (2) % Total costs and expenses 2,078,925 2,122,845 2 % Loss from continuing operations before income taxes (52,327) (43,920) (19) % (Benefit) provision for income taxes (154,829) 17,347 >100% Income (loss) from continuing operations 102,502 (61,267) >100% Loss from discontinued operations, net of tax (306,099) (324,360) 6 % Net loss $ (203,597) $ (385,627) 47 % Revenue decreased $52 million in 2024 compared to 2023 primarily due to lower support services revenue of $36 million and lower equipment sales of $36 million, partially offset by higher business services revenue of $28 million.
Removed
Our cross-border services offers our clients a range of services to manage their international shopping and parcel shipping experience. Using our digital delivery services, clients can purchase postage, print shipping labels and access shipping and tracking services from multiple carriers. Delivery and return parcels using our digital delivery services are not physically processed through our network.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−2 removed3 unchanged
Biggest changeThe weighted average interest rate of our variable rate debt at December 31, 2023 and 2022 was 9.7% and 7.5%, respectively. A 100 basis point change in the weighted average interest rate of our variable rate debt in 2023 would have increased interest expense approximately $8 million.
Biggest changeAt December 31, 2024, approximately 61% of our debt is at fixed rates and the remaining 39% is at variable rates. The weighted average interest rate of our variable rate debt at December 31, 2024 and 2023 was 8.3% and 9.7%, respectively.
We are also exposed to credit risk on our accounts receivable and finance receivable portfolio. Foreign Exchange Risk We have a number of short-term intercompany loans denominated in a foreign currency, predominantly the British Pound, Canadian Dollar and Euro. Our foreign currency risk primarily includes the periodic revaluation of these intercompany loans and related interest, which is recorded in earnings.
We are also exposed to credit risk on our accounts receivable and finance receivable portfolio. Foreign Exchange Risk We have a number of short-term intercompany loans denominated in a foreign currency, predominantly the British Pound, Euro and Canadian Dollar. Our foreign currency risk primarily includes the periodic revaluation of these intercompany loans and related interest, which is recorded in earnings.
We are also exposed to foreign currency risks associated with transactions denominated in currencies other than a location’s functional currency and forecasted inventory purchases between affiliates and third parties. However, these risks are not deemed to be significant. Interest Rate Risk We are exposed to interest rate risk on our variable-rate debt borrowings.
We are also exposed to foreign currency risks associated with transactions denominated in currencies other than a location’s functional currency and forecasted inventory purchases between affiliates and third parties. However, these risks are not deemed to be significant. 28 Interest Rate Risk We are exposed to interest rate risk on our variable-rate debt borrowings.
This risk is mitigated due to our large, diverse client base, dispersed over various geographic regions and industrial sectors. No single client comprised more than 10% of our consolidated net sales in 2023 or 2022.
This risk is mitigated due to our large, diverse client base, dispersed over various geographic regions and industrial sectors. No single client comprised more than 10% of our consolidated net sales in 2024 or 2023.
We have designated these securities as available-for-sale, and changes in fair value due to changes in interest rates are recognized in accumulated other comprehensive income, a component of equity, and not earnings.
We have designated these securities as available-for-sale, and changes in fair value due to changes in interest rates are recognized in accumulated other comprehensive loss, a component of equity, and not earnings.
We also maintain a significant investment portfolio comprised of fixed-rate investment in government and municipal securities, corporate securities, mortgage-backed securities and asset-backed securities. Changes in interest rates impact the fair value of these investments.
A 100 basis point change in the weighted average interest rate of our variable rate debt in 2024 would have increased interest expense approximately $8 million. We also maintain a significant investment portfolio comprised of fixed-rate investment in government and municipal securities, corporate securities, mortgage-backed securities and asset-backed securities. Changes in interest rates impact the fair value of these investments.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See "Index to Consolidated Financial Statements and Schedules" in this Form 10-K.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See "Index to Consolidated Financial Statements and Schedules" in this Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
While this decision reduces volatility in cash flows, the periodic revaluation of these intercompany loans could result in significant non-cash charges or income in earnings. Assuming foreign currency exchange rates at December 31, 2023, a 1% change in the British Pound, Canadian Dollar or Euro would impact earnings by $5 million, $3 million and $2 million, respectively.
Assuming foreign currency exchange rates at December 31, 2024, a 1% change in the British Pound, Euro and Canadian Dollar would impact earnings by $4 million, $3 million and $2 million, respectively.
Removed
Historically, we entered into foreign exchange contracts to minimize the impact of the revaluation of these intercompany loans and related interest on earnings. Changes in fair value of these foreign exchange contracts were also recorded in earnings and designed to generally offset the impact to earnings from the revaluation of the underlying intercompany loans.
Removed
While there was typically minimal impact to earnings, the settlement of these derivative contracts resulted in cash outflows or inflows, which could be significant. In the fourth quarter of 2023, management decided to no longer use foreign exchange contracts to hedge the revaluation of intercompany loans and related interest.

Other PBI 10-K year-over-year comparisons