~~PITNEY BOWES INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)~~

3. Segment Information

In January 2018, we revised our business reporting groups to reflect how we manage these groups and clients served in each market. The Commerce Services group was formed and includes our Global Ecommerce and Presort Services segments. Additionally, the operating results of the Production Mail Business have been classified as discontinued operations and segment operating results for the prior year have been recast to conform to the current year presentation. The principal products and services of each ~~of our~~ reportable ~~segments~~segment are as follows:

Commerce Services:

Global Ecommerce: Includes the worldwide revenue and related expenses from cross-border ecommerce transactions and domestic retail and ecommerce shipping solutions ~~including~~and fulfillment, delivery and ~~returns.~~return services.

Presort Services: Includes revenue and related expenses from sortation services that allow clients to qualify large volumes of First Class Mail, Marketing Mail and Bound and Packet Mail (Standard Flats and Bound Printed Matter) for postal worksharing discounts.

Small & Medium Business (SMB) Solutions:

North America Mailing: Includes the revenue and related expenses from mailing and shipping solutions, financing, services, supplies and ~~supplies~~other applications for small and medium businesses to efficiently create ~~physical and digital~~ mail, evidence postage and help simplify and save on the sending, tracking and receiving of letters, parcels and flats in the U.S. and Canada.

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)

International Mailing: Includes the revenue and related expenses from mailing and shipping solutions, financing, services and supplies for small and medium businesses to efficiently create ~~physical and digital~~ mail, evidence postage and help simplify and save on the sending, tracking and receiving of letters, parcels and flats in areas outside the U.S. and Canada.

Software Solutions:

Includes the worldwide revenue and related expenses from the licensing of customer engagement, customer information, ~~and~~ location intelligence software, data solutions and related support services.

Management uses segment earnings before interest and taxes (EBIT) to measure profitability and performance at the segment level and believes that it provides a useful measure of operating performance and underlying trends of the business. We determine segment EBIT by deducting from segment revenue the related costs and expenses attributable to the segment. Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges and other items not allocated to a particular business segment. Segment EBIT may not be indicative of our overall consolidated performance and therefore, should be read in conjunction with our consolidated results of operations. The following tables provide information about our reportable segments and reconciliation of segment EBIT to net income.

~~PITNEY BOWES INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)~~

Revenue and EBIT by business segment is presented below:


	Revenue								Revenue
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2018		2017		2018		2017		2019		2018
Global Ecommerce	$	232,845	$	106,181	$	718,535	$	288,839	$	266,254	$	246,590
Presort Services	125,334		119,074		382,522		370,203		134,847		134,458
Commerce Services	358,179		225,255		1,101,057		659,042		401,101		381,048
North America Mailing	313,965		320,091		954,080		1,016,993		315,474		340,811
International Mailing	84,970		93,858		276,365		282,482		78,509		98,430
Small & Medium Business Solutions	398,935		413,949		1,230,445		1,299,475
SMB Solutions									393,983		439,241
Software Solutions	75,742		94,069		243,738		248,349		73,318		76,294
Total revenue	$	832,856	$	733,273	$	2,575,240	$	2,206,866	$	868,402	$	896,583


	EBIT												EBIT
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2018			2017			2018			2017			2019			2018
Global Ecommerce	$	(14,330	)	$	(9,594	)	$	(28,034	)	$	(17,894	)	$	(14,600	)	$	(7,711	)
Presort Services	17,435			19,474			57,026			69,461			15,066			27,026
Commerce Services	3,105			9,880			28,992			51,567			466			19,315
North America Mailing	118,070			107,963			352,833			370,004			110,613			128,568
International Mailing	12,794			8,809			42,040			36,239			11,790			16,022
Small & Medium Business Solutions	130,864			116,772			394,873			406,243
SMB Solutions													122,403			144,590
Software Solutions	3,525			18,531			24,450			24,928			1,692			2,492
Total segment EBIT	137,494			145,183			448,315			482,738			124,561			166,397
Reconciling items:
Interest, net													(38,966		)	(43,078		)
Unallocated corporate expenses	(39,696		)	(41,322		)	(137,257		)	(151,473		)	(55,689		)	(51,082		)
Interest, net	(37,437		)	(41,230		)	(122,484		)	(120,323		)
Restructuring charges and asset impairments, net	(7,232		)	(1,470		)	(19,639		)	(29,109		)
Gain from the sale of technology	—			—			—			6,085
Restructuring charges													(3,598		)	(904		)
Other expense													(17,710		)	—
Transaction costs	(36		)	(4,896		)	(1,089		)	(4,896		)	(1,726		)	(1,055		)
Other expense	(7,964		)	—			(7,964		)	—
Income from continuing operations before income taxes	45,129			56,265			159,882			183,022			6,872			70,278
(Benefit) provision for income taxes	(1,976		)	10,828			20,745			38,700
Income from discontinued operations, net of tax	29,848			11,921			39,543			27,070
Net income	$	76,953		$	57,358		$	178,680		$	171,392
Provision for income taxes													8,301			18,795
(Loss) income from discontinued operations, net of tax													(1,230		)	8,487
Net (loss) income													$	(2,659	)	$	59,970

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)

4. Discontinued Operations

On July 2, 2018, we completed the sale of the Production Mail Business, other than in certain non-U.S. jurisdictions, to an affiliate of Platinum Equity, LLC, a leading global private equity firm. Subsequently during the third quarter, we closed on the sale of additional non-U.S. jurisdictions, and expect to close on the sale of the majority of the remaining non-U.S. jurisdictions in the fourth quarter, subject to local regulatory requirements. Cash proceeds received in the third quarter were $340 million. Net proceeds from the sale after the payment of closing costs, transaction fees and taxes are estimated to be approximately $270 million.

In connection with the sale of the Production Mail Business, we entered into Transition Services Agreements (TSAs) with the purchaser whereby we will perform certain support functions for periods of a year or less. None of these TSAs will have a material effect on our financial performance.

Selected financial information ~~of the Production Mail Business~~ included in discontinued operations is as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Revenue $ 19,557
$ 109,547
$ 211,000
$ 293,965

(Loss) earnings from discontinued operations $ (1,316 ) $ 18,700
$ 20,304
$ 42,345
Gain on sale, including transaction costs 86,640
—
77,863
—
Income from discontinued operations before taxes 85,324
18,700
98,167
42,345
Tax provision 55,476
6,779
58,624
15,275
Income from discontinued operations, net of tax $ 29,848
$ 11,921
$ 39,543
$ 27,070

~~The major categories of assets and liabilities of the Production Mail Business included in assets of discontinued operations and liabilities of discontinued operations are as follows:~~



	Three Months Ended March 31,
	2019			2018
Revenue	$	750		$	102,234

(Loss) earnings from discontinued operations	$	(663	)	$	11,803
Loss on sale	(667		)	—
(Loss) income from discontinued operations before taxes	(1,330		)	11,803
Tax (benefit) provision	(100		)	3,316
(Loss) income from discontinued operations	$	(1,230	)	$	8,487

September 30, 2018 December 31, 2017
Cash and cash equivalents $ 1,026
$ —
Accounts receivable, net 2,900
97,402
Inventories 4,360
48,910
Other current assets and prepayments 188
3,365
Property, plant and equipment, net 578
5,541
Rental property and equipment, net 386
1,786
Goodwill 8,787
177,799
Other assets 48
45
Assets of discontinued operations $ 18,273
$ 334,848

Accounts payable and accrued liabilities $ 2,261
$ 36,592
Advance billings 2,534
30,607
Other noncurrent liabilities 5,651
5,609
Liabilities of discontinued operations $ 10,446
$ 72,808

5. Earnings per Share (EPS)



	Three Months Ended March 31,
	2019			2018
Numerator:
(Loss) income from continuing operations	$	(1,429	)	$	51,483
(Loss) income from discontinued operations, net of tax	(1,230		)	8,487
Net (loss) income (numerator for diluted EPS)	(2,659		)	59,970
Less: Preference stock dividend	8			8
(Loss) income attributable to common stockholders (numerator for basic EPS)	$	(2,667	)	$	59,962
Denominator:
Weighted-average shares used in basic EPS	185,971			186,863
Dilutive effect of common stock equivalents ⁽¹⁾	—			1,312
Weighted-average shares used in diluted EPS	185,971			188,175
Basic (loss) earnings per share ⁽²⁾:
Continuing operations	$	(0.01	)	$	0.28
Discontinued operations	(0.01		)	0.05
Net (loss) income	$	(0.01	)	$	0.32
Diluted (loss) earnings per share ⁽²⁾:
Continuing operations	$	(0.01	)	$	0.27
Discontinued operations	(0.01		)	0.05
Net (loss) income	$	(0.01	)	$	0.32

Anti-dilutive options excluded from diluted earnings per share:	14,989			11,636


(1)	Dilutive effect of common stock equivalents are not included in the calculation of diluted earnings per share for the three months ended March 31, 2019 as the Company is reporting a net loss for the period.


(2)	The sum of the earnings per share amounts may not equal the totals due to rounding.

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)

~~5. Earnings per Share~~

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Numerator:

Net income from continuing operations $ 47,105
$ 45,437
$ 139,137
$ 144,322
Income from discontinued operations, net of tax 29,848
11,921
39,543
27,070
Net income (numerator for diluted EPS) 76,953
57,358
178,680
171,392
Less: Preference stock dividend 8
9
24
28
Income attributable to common stockholders (numerator for basic EPS) $ 76,945
$ 57,349
$ 178,656
$ 171,364
Denominator:

Weighted-average shares used in basic EPS 187,470
186,497
187,167
186,257
Effect of dilutive shares 945
1,260
1,023
943
Weighted-average shares used in diluted EPS 188,415
187,757
188,190
187,200
Basic earnings per share⁽¹⁾:

Continuing operations $ 0.25
$ 0.24
$ 0.74
$ 0.77
Discontinued operations 0.16
0.06
0.21
0.15
Net income $ 0.41
$ 0.31
$ 0.95
$ 0.92
Diluted earnings per share⁽¹⁾:

Continuing operations $ 0.25
$ 0.24
$ 0.74
$ 0.77
Discontinued operations 0.16
0.06
0.21
0.14
Net income $ 0.41
$ 0.31
$ 0.95
$ 0.92

Anti-dilutive shares not used in calculating diluted weighted-average shares 12,195
9,927
12,097
10,211

⁽¹⁾~~The sum of earnings per share amounts may not equal the totals due to rounding.~~

6. Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined on the last-in, first-out (LIFO) basis for most U.S. inventories and the first-in, first-out (FIFO) basis for most non-U.S. inventories. Inventories at ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 consisted of the following:


	September 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Raw materials	$	11,998		$	11,767		$	13,258		$	8,231
Supplies and service parts	22,213			21,475			23,627			21,841
Finished products	16,993			13,261			36,474			36,690
Inventory at FIFO cost	51,204			46,503			73,359			66,762
Excess of FIFO cost over LIFO cost	(3,005		)	(5,734		)	(4,483		)	(4,483		)
Total inventory, net	$	48,199		$	40,769		$	68,876		$	62,279

^(b)~~Reclassified from accumulated other comprehensive loss into other components of net pension and postretirement cost (see Note 12 for additional details).~~


⁽¹⁾	Amounts in parentheses indicate reductions to income and increases to other comprehensive income.


⁽²⁾	Reclassified from AOCI into other components of net pension and postretirement cost (see Note 12 for additional details).

PITNEY BOWES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; table amounts in thousands unless otherwise noted, except per share amounts)

Changes in AOCI for the ~~nine~~three months ended ~~September 30,~~March 31, 2019 and 2018 ~~and 2017~~ were as follows:

Cash flow hedges Available for sale securities Pension and postretirement benefit plans Foreign currency adjustments Total
Balance at January 1, 2018 $ (406 ) $ 1,597
$ (748,800 ) $ (44,564 ) $ (792,173 )
Other comprehensive loss before reclassifications (a) (593 ) (6,402 ) —
(31,545 ) (38,540 )
Reclassifications into earnings (a), (b) 1,366
(112 ) 24,850
—
26,104
Net other comprehensive income (loss) 773
(6,514 ) 24,850
(31,545 ) (12,436 )
Balance at September 30, 2018 $ 367
$ (4,917 ) $ (723,950 ) $ (76,109 ) $ (804,609 )



	Cash flow hedges			Available for sale securities			Pension and postretirement benefit plans			Foreign currency adjustments			Total
Balance at January 1, 2019	$	191		$	(3,061	)	$	(846,461	)	$	(99,630	)	$	(948,961	)
Other comprehensive income before reclassifications (a)	258			2,799			—			21,274			24,331
Reclassifications into earnings (1), (2)	(95		)	17			6,636			—			6,558
Net other comprehensive income	163			2,816			6,636			21,274			30,889
Balance at March 31, 2019	$	354		$	(245	)	$	(839,825	)	$	(78,356	)	$	(918,072	)

Cash flow hedges Available for sale securities Pension and postretirement benefit plans Foreign currency adjustments Total
Balance at January 1, 2017 $ (1,485 ) $ 120
$ (787,813 ) $ (150,955 ) $ (940,133 )
Other comprehensive (loss) income before reclassifications (a) (376 ) 1,921
(1,482 ) 100,223
100,286
Reclassifications into earnings (a), (b) 955
330
20,078
—
21,363
Net other comprehensive income 579
2,251
18,596
100,223
121,649
Balance at September 30, 2017 $ (906 ) $ 2,371
$ (769,217 ) $ (50,732 ) $ (818,484 )



	Cash flow hedges			Available for sale securities			Pension and postretirement benefit plans			Foreign currency adjustments			Total
Balance at January 1, 2018	$	(406	)	$	1,597		$	(748,800	)	$	(46,869	)	$	(794,478	)
Other comprehensive income (loss) before reclassifications (a)	43			(4,010		)	—			15,211			11,244
Reclassifications into earnings (1), (2)	443			18			8,172			—			8,633
Net other comprehensive income (loss)	486			(3,992		)	8,172			15,211			19,877
Balance at March 31, 2018	$	80		$	(2,395	)	$	(740,628	)	$	(31,658	)	$	(774,601	)

~~(a)~~(1) Amounts are net of tax. Amounts in parentheses indicate debits to AOCI.

~~(b)~~(2) See table above for additional details of these reclassifications.

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains statements that are forward-looking. We want to caution readers that any forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 ~~as amended,~~(Securities Act) and Section 21E of the Securities Exchange Act of 1934 may change based on various factors. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, and actual results could differ materially. Words such as "estimate," "target," "project," "plan," "believe," "expect," "anticipate," "intend" and similar expressions may identify such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or ~~otherwise.~~otherwise, except as required by law. Forward-looking statements in this Form 10-Q speak only as of the date hereof, and forward-looking statements in documents attached that are incorporated by reference speak only as of the date of those documents.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission. Factors which could cause future financial performance to differ materially from the expectations as expressed in any forward-looking statement made by or on our behalf include, without limitation:

declining physical mail volumes

changes in, or loss of, our contractual relationships with the U.S. Postal Service (USPS) or posts in other major markets

changes in postal regulations

competitive factors, including pricing pressures; technological developments and the introduction of new products and services by competitors

the United Kingdom's potential exit from the European Union (Brexit)

our success in developing ~~new products~~ and ~~services, including digital-based~~marketing new products and services and obtaining regulatory ~~approval~~approvals, if required

~~the market’s acceptance of new products and services~~

changes in ~~postal~~banking regulations or ~~banking regulations~~

~~changes in, or~~the loss of our ~~contractual relationships with the U.S. Postal Service or posts in our other major markets~~Industrial Bank charter

changes in labor conditions and transportation costs

macroeconomic factors, including global and regional business conditions that adversely impact customer demand, foreign currency exchange rates and interest rates

~~economic tensions between governments and~~ changes in global political conditions and international trade policies, including the imposition or expansion of trade tariffs

the continued availability and security of key information technology systems and the cost to comply with information security requirements and privacy laws

a breach of security, including a ~~cyberattack~~cyber-attack or other comparable event

third-party suppliers' ability to provide products and services required by our clients

our success at managing the relationships with ~~our~~ outsource providers, including the costs of outsourcing functions and operations ~~not central~~

capital market disruptions or credit rating downgrades that adversely impact our ability to access capital markets at reasonable costs

our ~~business~~success at managing customer credit risk

integrating newly acquired businesses, including operations and product and service offerings

the loss of some of our larger clients in ~~the Global Ecommerce segment~~our Commerce Services group

intellectual property infringement claims

~~our success at managing customer credit risk~~

~~capital market disruptions or credit rating downgrades that adversely impact our ability to access capital markets at reasonable costs~~

~~our ability to fully utilize the enterprise business platform in North America and successfully deploy it in major international markets without significant disruption to existing operations~~

significant changes in pension, health care and retiree medical costs

income tax adjustments or other regulatory levies from tax audits and changes in tax laws, rulings or regulations ~~including the impact of the Tax Cuts and Jobs Act of 2017~~

~~potential impacts to our business due to changes in global political conditions, including~~ the use of the postal system for transmitting harmful biological agents, illegal substances or other terrorist attacks

acts of nature

Overview

~~Our strategy is focused around three core principles: to invest~~Effective January 1, 2019, we adopted Accounting Standards Codification 842, Leases using the modified retrospective transition approach of applying the standard at the beginning of the earliest comparative period presented in ~~offerings that reduce~~ the ~~complexity of mailing and shipping for~~financial statements. Accordingly, prior period financial results have been recast.

We continue our ~~clients; to continue to focus on operational excellence initiatives to reduce costs; and to focus on integrating and leveraging technologies across the enterprise.~~

Year-to-date, total revenue increased 17% over the prior year, but total earnings before interest and taxes (EBIT) has declined. The decline in EBIT is largely due to continued investments in opportunities to reduce the complexity in mailing and shipping and the overall portfolio shift to higher growth digital and shipping solutions.

Over the last five years, we have developed a simpler and more digital operating model and have reduced our cost structure. Last year we announced our intentions to reduce costs by an additional $200 million over a 24-month period. Our attainment to date leaves us well positioned to achieve or exceed our savings objectives.

~~In connection with our shift~~transformation to higher growth markets that align with our ~~strategic~~ focus on ~~shipping,~~reducing the complexity of mailing and shipping. Commerce Services was the largest contributor to revenue and accounted for 46% of total revenue compared to 43% at March 31, 2018.

In January 2019, we sold ~~our Document Messaging Technology production mail business~~the direct operations and ~~supporting software (the Production Mail Business)~~moved to a dealer model in six smaller markets within International Mailing (Market Exits). ~~The sale of the U.S. based operations was completed~~We recorded a pre-tax loss on ~~July 2, 2018 while~~ the sale of $18 million, primarily due to the ~~majority~~write-off of certain non-U.S. jurisdictions closed later in the third quarter or are expected to close in the fourth quarter, subject to local regulatory requirements. Proceeds from the sale were $340 million, the majority of which was used to repay debt.

cumulative translation adjustments.

Financial Results Summary - Three Months Ended ~~September 30:~~March 31:

2018 2017 Change
Revenue $ 832,856
$ 733,273
14%
Net income from continuing operations $ 47,105
$ 45,437
4%
Diluted earnings per share - continuing operations $ 0.25
$ 0.24
4%



	2019			2018		Change
Revenue	$	868,402		$	896,583	(3)%
Segment earnings before interest and taxes (EBIT)	$	124,561		$	166,397	(25)%
(Loss) income from continuing operations	$	(1,429	)	$	51,483	>(100%)
Net (loss) income	$	(2,659	)	$	59,970	>(100%)
Diluted (loss) earnings per share - continuing operations	$	(0.01	)	$	0.27	>(100%)
Net cash provided by operations	$	69,728		$	69,629	—%

~~Revenue~~

~~Revenue increased 14% as~~On a reported basis, revenue decreased 3% from the prior year period. Currency had a 1% unfavorable impact on revenue and ~~at constant currency.~~

~~The increase reflects growth in~~Market Exits had an additional 1% unfavorable impact on revenue. On a reported basis, business services revenue ~~partially offset by~~increased 5% due to growth in Commerce Services, but all other revenue lines declined due to declines in ~~equipment sales,~~our mailing business and lower software ~~revenue and stream revenues (financing, rentals, supplies and support services).~~license revenue.

~~Commerce Services grew 59% primarily due to the acquisition of Newgistics. Excluding Newgistics,~~ Commerce Services revenue grew ~~3% as Presort Services grew~~ 5% ~~due to higher mail processing volumes.~~, driven primarily by growth of 8% in Global ~~Ecommerce revenue was flat.~~

Ecommerce. Small and Medium Business (SMB) Solutions ~~(SMB)~~ revenue declined ~~4% as reported~~10%, with Market Exits and ~~3% at constant currency.~~currency having a 2% and 1% unfavorable impact on revenue, respectively. Within SMB, North America Mailing ~~revenue~~ declined 2%7% and International Mailing declined 20%. Market Exits and currency adversely impacted International Mailing revenue by 8% and 6%, respectively. Software Solutions revenue declined ~~9% as~~4%.

Segment EBIT declined 25% from the prior year. Within Commerce Services, Global Ecommerce reported an EBIT loss of $15 million compared to a loss of $8 million in the prior year, driven by a shift in the mix of business to faster growing, lower margin services, investments in market growth opportunities and ~~7% at constant currency~~higher labor, transportation and postal costs. Presort EBIT declined 44% due to lower ~~equipment sales~~margins. SMB EBIT declined 15% due to the decline in revenue and ~~stream revenues.~~

a charge related to a SendPro C-Series tablet replacement program to address an underlying battery longevity issue. Software Solutions ~~revenue decreased 19% as reported and at constant currency~~EBIT declined 32% due to ~~lower licensing revenue~~the decline in ~~the current year as well as a large Location Intelligence deal in third quarter of 2017.~~revenue.

~~Net Income from Continuing Operations~~

~~Net~~(Loss) income from continuing operations before taxes was ~~$47 million compared to $45 million~~adversely impacted in the ~~prior year. The increase~~quarter by a pre-tax loss of $18 million from the Market Exits, the decline in revenue and lower margins. Net (loss) income was ~~driven~~also impacted by ~~lower selling, general and administrative expenses and~~ a ~~lower~~121% effective tax rate ~~partially offset by lower gross margins and the loss from the extinguishment of debt.~~

~~Financial Results Summary - Nine Months Ended September 30:~~

2018 2017 Change
Revenue $ 2,575,240
$ 2,206,866
17%
Net income from continuing operations $ 139,137
$ 144,322
(4)%
Diluted earnings per share - continuing operations $ 0.74
$ 0.77
(4)%
Net cash provided by operating activities - continuing operations $ 246,426
$ 312,557
(21)%

~~Revenue~~

~~Revenue increased 17% as reported and 16% at constant currency.~~

~~The increase reflects growth in business services revenue, partially offset by declines in equipment sales, software revenues and stream revenues.~~

Commerce Services grew 67%. Revenue for Global Ecommerce more than doubled over the prior year, and excluding revenue from Newgistics, grew 15% due to higher shipping and marketplace revenue. Presort Services revenue grew 3% due to higher mail processing volumes.

SMB revenue declined 5% as reported and 6% at constant currency. North America Mailing revenue declined 6% primarily due to a decline in equipment sales and stream revenues. International Mailing revenue decreased 2% as reported and 7% at constant currency due to lower equipment sales, supplies and support services revenue.

~~Software Solutions revenue decreased 2% as reported and 3% at constant currency due to lower licensing revenue.~~

~~Net Income from Continuing Operations~~

~~Net income from continuing operations was $139 million compared to $144 million in the prior year. The decrease was~~ driven by ~~lower overall margins as our portfolio continues to shift to higher growth, but lower margin businesses, continued investments in Global Ecommerce and higher amortization expense from~~a tax of $2 million on the ~~acquisition~~book loss of ~~Newgistics, partially offset by lower selling, general and administrative, restructuring and pension costs and a lower effective tax rate.~~

~~Cash Flows from Continuing Operations~~

~~Net cash provided by operating activities from continuing operations was $246 million compared to $313 million in the prior year. We also received $340~~$18 million from ~~the sale of the Production Mail Business. During the first nine months of 2018, we used cash to:~~

~~repay $565 million of debt;~~

~~pay dividends of $105 million to our stockholders;~~Market Exits resulting primarily from nondeductible currency write offs and

~~invest $141 million in capital expenditures.~~ basis differences.

Outlook

We expect ~~continued~~revenue to grow as we transform our portfolio to higher growth businesses. Within Global Ecommerce, we expect revenue growth from the expansion of our domestic parcel and fulfillment business, growth in domestic shipping solutions and cross sale opportunities of our cross-border products. Higher volumes of bound and packet mail are expected to generate revenue growth at Presort Services.

In SMB Solutions, we expect continued declines in revenue due to lower mail volumes and lower lease opportunities. However, we expect the magnitude of the decline to be mitigated by the continued success of our SendPro C-Series product in North America and planned launches in several international markets and the introduction of new services and products. We began offering expanded third-party equipment finance offerings to our existing SMB client base in the United States. Under this program, in addition to leasing options for our mailing equipment products, we will offer financing alternatives to our clients to lease other manufacturers' equipment to meet their business needs. We expect that cash flows will be negatively impacted during the year as we ~~move~~invest in the origination of third-party equipment leases and build a finance receivable portfolio.

Within Software Solutions, revenue growth will be driven by a combination of sales opportunities from our ~~portfolio into high growth, albeit lower margin, areas.~~ indirect channel, software and data license deals, SaaS revenue and maintenance revenue.

We expect continued progress in our efforts to improve productivity and reduce spend. Over the last five years, we have transformed to a more digital operating model and have reduced our cost structure. In 2017, we announced our intention to reduce gross spend by $200 million over a 24-month period. We ~~are addressing challenges such as higher transportation~~achieved over $150 million of this target in 2018 and ~~labor costs,~~expect to recognize the remainder in 2019. A large portion of these gross savings has been, and ~~are on target to deliver cost savings this year.~~

We are integrating and leveraging the Newgistics network into our Commerce Services businesses. Shipping solutions will become a larger contributor to revenue and Shipping APIs, cross-border volume expansion and carrier services offerings will continue to ~~contribute to revenue growth~~be, reinvested in ~~Global Ecommerce. Presort~~the business, particularly in Commerce Services ~~revenue is expected to continue to perform around the market ranges.~~and our third-party equipment financing initiative.

Within our mailing business, we expect that the introduction of new services and products, including the SendPro products and expanded finance offerings, will contribute to improvements in equipment sales and stream revenue trends in North America over the long-term.

~~In Software Solutions, we continue to build our indirect channel to drive improvements and expect to expand our customer base.~~

RESULTS OF OPERATIONS

Revenue by source and the related cost of revenue are shown in the following tables:


	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended March 31,
	2018		2017		Actual % change		Constant Currency % change		2018		2017		Actual % change		Constant Currency % change		2019		2018		Actual % change		Constant currency % change
Equipment sales	$	100,937	$	103,514	(2	)%	(2	)%	$	317,058	$	349,401	(9	)%	(10	)%	$	89,787	$	106,708	(16	)%	(14	)%
Supplies	50,403		53,627		(6	)%	(5	)%	165,853		173,321		(4	)%	(6	)%	50,953		59,993		(15	)%	(13	)%
Software	76,026		94,226		(19	)%	(19	)%	244,022		248,391		(2	)%	(3	)%	73,318		76,294		(4	)%	(2	)%
Rentals	91,115		95,333		(4	)%	(4	)%	277,550		290,087		(4	)%	(5	)%	22,157		24,965		(11	)%	(9	)%
Financing	76,730		81,079		(5	)%	(5	)%	233,504		250,477		(7	)%	(8	)%	97,043		100,349		(3	)%	(2	)%
Support services	74,117		75,783		(2	)%	(2	)%	219,311		223,056		(2	)%	(3	)%	128,621		140,650		(9	)%	(7	)%
Business services	363,528		229,711		58	%	58	%	1,117,942		672,133		66	%	66	%	406,523		387,624		5	%	5	%
Total revenue	$	832,856	$	733,273	14	%	14	%	$	2,575,240	$	2,206,866	17	%	16	%	$	868,402	$	896,583	(3	)%	(2	)%

Item 4: Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures are also designed to reasonably ensure that such information is accumulated and communicated to management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), to allow timely decisions regarding disclosures.

Under the direction of our CEO and CFO, management evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) and internal controls over financial reporting. Our CEO and CFO concluded that, as of the end of the period covered by this report, such disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the required time periods. In addition, no changes in internal control over financial reporting occurred during the quarter covered by this report that materially affected, or are reasonably likely to materially affect, such internal control over financial reporting. It should be noted that any system of controls is based in part upon certain assumptions designed to obtain reasonable (and not absolute) assurance as to its effectiveness, and there can be no assurance that any design will succeed in achieving its stated goals. Notwithstanding this caution, the CEO and CFO have reasonable assurance that the disclosure controls and procedures were effective as of ~~September 30, 2018.~~March 31, 2019.

~~We acquired Newgistics in~~Effective January 1, 2019, we adopted the new lease accounting standard. Although the adoption of this standard did not have a ~~purchase business combination in October 2017. We are in~~material impact on our results of operations or cash flows for the ~~process of reviewing~~three months ended March 31, 2019 and ~~evaluating the~~2018, we did implement changes to our internal controls related to the adoption of ~~Newgistics~~the new lease accounting standard. In addition, we implemented a new information technology application to calculate ROU assets and ~~are implementing~~lease liabilities for our leases. There were no other changes to our internal control ~~structure~~ over ~~this acquired business.~~financial reporting during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1: Legal Proceedings

See Note 14 to the Condensed Consolidated Financial Statements.

Item 1A: Risk Factors

There were no material changes to the risk factors identified in our ~~2017~~2018 Annual Report.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

Repurchases of Equity Securities

We periodically repurchase shares of our common stock in the open market to manage the dilution created by shares issued under employee stock plans and for other purposes. In February 2019, the Board of Directors authorized an additional $100 million share repurchase giving us the ability to repurchase up to $121 million of our shares.

The following table provides information about purchases of our common stock during the three months ended ~~September 30, 2018:~~March 31, 2019:




	~~Total number of~~ ~~shares purchased~~	~~Average price~~ ~~paid per share~~	~~Total number of~~ ~~shares purchased~~ ~~as part of~~ ~~publicly~~ ~~announced plans or programs~~	~~Approximate~~ ~~dollar value of~~ ~~shares that may~~ ~~yet be purchased~~ ~~under the plans or programs (in~~ ~~thousands)~~
~~Beginning balance~~				~~$21,022~~
~~July 1, 2018 - July 31, 2018~~	—	—	—	~~$21,022~~
~~August 1, 2018 - August 31, 2018~~	—	—	—	~~$21,022~~
~~September 1, 2018 - September 30, 2018~~	—	—	—	~~$21,022~~
	—	—	—



	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands)
Beginning balance				$21,022
January 1, 2019 - January 31, 2019	—	—	—	$21,022
February 1, 2019 - February 28, 2019	2,148,385	$7.13	2,148,385	$105,700
March 1, 2019 - March 31, 2019	3,492,949	$6.82	3,492,949	$81,880
	5,641,334	$6.95	5,641,334

Item 6: Exhibits

Exhibit

Number

Description

Exhibit Number in this Form 10-Q

Description

Exhibit Number in this Form 10-Q

3~~(a)~~(c)

Restated Certificate of Incorporation of Pitney Bowes Inc. (incorporated by reference to Exhibit 3(c) to Form 8-K filed with the Commission on May 12, 2012)

3(a)

Restated Certificate of Incorporation of Pitney Bowes Inc. (incorporated by reference to Exhibit 3(c) to Form 8-K filed with the Commission on May 12, 2011)

3(c)

3~~(b)~~

Pitney Bowes Inc. Amended and Restated By-laws effective May 13, 2013 (incorporated by reference to Exhibit 3(d) to Form 8-K filed with the Commission on May 15, 2013)

3(b)

Pitney Bowes Inc. Amended and Restated By-laws effective May 13, 2013 (incorporated by reference to Exhibit 3 to Form 8-K filed with the Commission on May 15, 2013)

Asset Purchase agreement between Pitney Bowes Inc. and Stark Acquisition Corporation dated April 27, 2018 (incorporated by reference to Exhibit 2.1 to Form 8-K filed with Commission on May 1, 2018)

10a

Amendment and supplement asset purchase agreement between Pitney Bowes, Inc. and Stark Acquisition Corporation dated July 1, 2018 (incorporated by reference to Exhibit to 10a to Form 10-Q filed with the Commission on August 2, 2018)

10a

Computation of ratio of earnings to fixed charges

31.1

Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended

31.1

Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended

31.1

31.2

Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended

31.2

Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended

31.2

32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350

32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350

32.1

32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

32.2

101.INS

XBRL Report Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Calculation Linkbase Document

101.DEF

XBRL Taxonomy Definition Linkbase Document

101.LAB

XBRL Taxonomy Label Linkbase Document

101.PRE

XBRL Taxonomy Presentation Linkbase Document



State of incorporation: Delaware		~~06-0495050~~
~~(State or other jurisdiction of incorporation or organization)~~		( I.R.S. Employer Identification No.)
		06-0495050
3001 Summer Street, Stamford, Connecticut 06926		~~06926~~
~~(Address of principal executive offices)~~(203) 356-5000		~~(Zip Code)~~



~~(203) 356-5000~~
~~(Registrant’s telephone number, including area code)~~Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $1 par value per share	PBI	New York Stock Exchange



Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o
Smaller reporting company o	Emerging growth company o



		Page Number

Part I - Financial Information:

Item 1:	Financial Statements

	Condensed Consolidated Statements of Income for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2019 and 2018 ~~and 2017~~	3

	Condensed Consolidated Statements of Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2019 and 2018 ~~and 2017~~	4

	Condensed Consolidated Balance Sheets at ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018	5

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2019 and 2018 ~~and 2017~~	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3330

Item 3:	Quantitative and Qualitative Disclosures about Market Risk	4337

Item 4:	Controls and Procedures	4338


Part II - Other Information:

Item 1:	Legal Proceedings	4439

Item 1A:	Risk Factors	4439

Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	4439

Item 6:	Exhibits	4540


Signatures		4641


	September 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	759,231		$	1,009,021		$	838,905		$	867,262
Short-term investments	55,929			48,988			65,405			59,391
Accounts receivable (net of allowance of $17,108 and $14,786, respectively)	378,036			427,022
Short-term finance receivables (net of allowance of $12,570 and $12,187, respectively)	787,121			828,003
Accounts receivable (net of allowance of $21,029 and $17,617, respectively)							412,661			456,138
Short-term finance receivables (net of allowance of $13,633 and $12,454, respectively)							684,436			758,511
Inventories	48,199			40,769			68,876			62,279
Current income taxes	11,395			58,439			21,897			5,947
Other current assets and prepayments	92,916			74,589			134,929			100,625
Assets of discontinued operations	18,273			334,848			—			4,854
Total current assets	2,151,100			2,821,679			2,227,109			2,315,007
Property, plant and equipment, net	399,347			373,503			412,727			410,114
Rental property and equipment, net	179,058			183,956			41,862			46,228
Long-term finance receivables (net of allowance of $8,070 and $6,446 respectively)	600,129			652,087
Long-term finance receivables (net of allowance of $8,518 and $7,768 respectively)							545,360			536,369
Goodwill	1,765,083			1,774,645			1,754,259			1,766,511
Intangible assets, net	238,167			272,186			223,005			227,137
Operating lease assets							152,139			156,788
Noncurrent income taxes	54,114			59,909			61,700			66,326
Other assets	526,937			540,750			388,104			419,677
Total assets	$	5,913,935		$	6,678,715		$	5,806,265		$	5,944,157

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,342,097		$	1,450,149		$	1,313,440		$	1,390,362
Current income taxes	40,018			8,823
Current operating lease liabilities							35,219			37,208
Current portion of long-term debt	192,649			271,057			207,231			199,535
Advance billings	224,141			257,766			213,171			235,116
Current income taxes							5,697			15,284
Liabilities of discontinued operations	10,446			72,808			—			3,276
Total current liabilities	1,809,351			2,060,603			1,774,758			1,880,781
Deferred taxes on income	230,663			234,643			257,639			254,353
Tax uncertainties and other income tax liabilities	101,362			116,551			51,950			39,548
Noncurrent operating lease liabilities							124,873			127,237
Long-term debt	3,076,968			3,559,278			3,047,661			3,066,073
Other noncurrent liabilities	443,925			519,079			463,028			474,323
Total liabilities	5,662,269			6,490,154			5,719,909			5,842,315

Commitments and contingencies (See Note 14)

Stockholders’ equity:
Cumulative preferred stock, $50 par value, 4% convertible	1			1			1			1
Cumulative preference stock, no par value, $2.12 convertible	403			441			388			396
Common stock, $1 par value (480,000,000 shares authorized; 323,337,912 shares issued)	323,338			323,338			323,338			323,338
Additional paid-in capital	117,918			138,367			109,166			121,475
Retained earnings	5,290,761			5,229,584			5,267,615			5,279,682
Accumulated other comprehensive loss	(804,609		)	(792,173		)	(918,072		)	(948,961		)
Treasury stock, at cost (135,722,534 and 136,734,174 shares, respectively)	(4,676,146		)	(4,710,997		)
Treasury stock, at cost (140,812,458 and 135,662,830 shares, respectively)							(4,696,080		)	(4,674,089		)
Total stockholders’ equity	251,666			188,561			86,356			101,842
Total liabilities and stockholders’ equity	$	5,913,935		$	6,678,715		$	5,806,265		$	5,944,157



	Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
	As reported			Prior guidance			Increase (decrease)			As reported		Prior guidance		Increase (decrease)
Income Statement
Total revenue	$	832,856		$	828,999		$	3,857		$	2,575,240	$	2,553,059	$	22,181
Equipment sales	$	100,937		$	101,632		$	(695	)	$	317,058	$	319,165	$	(2,107	)
Software	$	76,026		$	71,081		$	4,945		$	244,022	$	218,410	$	25,612
Business services	$	363,528		$	363,921		$	(393	)	$	1,117,942	$	1,119,266	$	(1,324	)

Total costs and expenses	$	787,727		$	790,565		$	(2,838	)	$	2,415,358	$	2,420,406	$	(5,048	)
Cost of equipment sales	$	39,353		$	39,409		$	(56	)	$	132,513	$	132,628	$	(115	)
Cost of software	$	24,743		$	23,957		$	786		$	75,257	$	72,499	$	2,758
Selling, general and administrative	$	269,387		$	272,955		$	(3,568	)	$	847,281	$	854,972	$	(7,691	)

Income from continuing operations before taxes	$	45,129		$	38,434		$	6,695		$	159,882	$	132,653	$	27,229
(Benefit) provision for income taxes	$	(1,976	)	$	(3,768	)	$	1,792		$	20,745	$	13,666	$	7,079
Net income from continuing operations	$	47,105		$	42,202		$	4,903		$	139,137	$	118,987	$	20,150

Basic earnings - continuing operations	$	0.25		$	0.22		$	0.03		$	0.74	$	0.63	$	0.11
Diluted earnings per share - continuing operations	$	0.25		$	0.22		$	0.03		$	0.74	$	0.63	$	0.11



	Three Months Ended March 31, 2019
	Global Ecommerce		Presort Services		North America Mailing		International Mailing		Software Solutions		Total Revenue recognized under ASC 606		Revenue from leasing transactions and financing		Total Consolidated Revenue
Major products/service lines
Equipment sales	$	—	$	—	$	9,215	$	12,079	$	—	$	21,294	$	68,493	$	89,787
Supplies	—		—		35,103		15,850		—		50,953		—		50,953
Software	—		—		—		—		73,318		73,318		—		73,318
Rentals	—		—		—		—		—		—		22,157		22,157
Financing	—		—		—		—		—		—		97,043		97,043
Support services	—		22		107,709		20,890		—		128,621		—		128,621
Business services	266,254		134,825		4,517		927		—		406,523		—		406,523
Subtotal	266,254		134,847		156,544		49,746		73,318		680,709		$	187,693	$	868,402

Revenue from leasing transactions and financing
Equipment sales	—		—		57,894		10,599		—		68,493
Rentals	—		—		17,279		4,878		—		22,157
Financing	—		—		83,757		13,286		—		97,043
Total revenue	$	266,254	$	134,847	$	315,474	$	78,509	$	73,318	$	868,402

Timing of revenue recognition under ASC 606
Products/services transferred at a point in time	$	—	$	—	$	44,318	$	27,930	$	20,970	$	93,218
Products/services transferred over time	266,254		134,847		112,226		21,816		52,348		587,491
Total	$	266,254	$	134,847	$	156,544	$	49,746	$	73,318	$	680,709



	Three Months Ended March 31, 2018
	Global Ecommerce		Presort Services		North America Mailing		International Mailing		Software Solutions		Total Revenue recognized under ASC 606		Revenue from leasing transactions and financing		Total Consolidated Revenue
Major products/service lines
Equipment sales	$	—	$	—	$	10,416	$	11,795	$	—	$	22,211	$	84,497	$	106,708
Supplies	—		—		38,951		21,042		—		59,993		—		59,993
Software	—		—		—		—		76,294		76,294		—		76,294
Rentals	—		—		—		—		—		—		24,965		24,965
Financing	—		—		—		—		—		—		100,349		100,349
Support services	—		—		113,713		26,937		—		140,650		—		140,650
Business services	246,590		134,458		4,889		1,687		—		387,624		—		387,624
Subtotal	246,590		134,458		167,969		61,461		76,294		686,772		$	209,811	$	896,583

Revenue from leasing transactions and financing
Equipment sales	—		—		68,472		16,025		—		84,497
Rentals	—		—		19,512		5,453		—		24,965
Financing	—		—		84,858		15,491		—		100,349
Total revenue	$	246,590	$	134,458	$	340,811	$	98,430	$	76,294	$	896,583

Timing of revenue recognition under ASC 606
Products/services transferred at a point in time	$	—	$	—	$	49,367	$	32,836	$	25,001	$	107,204
Products/services transferred over time	246,590		134,458		118,602		28,625		51,293		579,568
Total	$	246,590	$	134,458	$	167,969	$	61,461	$	76,294	$	686,772



	September 30, 2018		January 1, 2018 ⁽¹⁾		Increase (decrease)
Contracts assets, current	$	8,472	$	5,075	$	3,397
Contracts assets, noncurrent	$	7,520	$	648	$	6,872
Advance billings, current	$	171,682	$	209,098	$	(37,416	)
Advance billings, noncurrent	$	14,891	$	17,765	$	(2,874	)



	Balance sheet location	March 31, 2019		December 31, 2018		Increase (decrease)
Contracts assets, current	Other current assets and prepayments	$	17,319	$	16,115	$	1,204
Contracts assets, noncurrent	Other assets	$	11,385	$	13,092	$	(1,707	)
Advance billings, current	Advance billings	$	203,735	$	221,527	$	(17,792	)
Advance billings, noncurrent	Noncurrent liabilities	$	13,144	$	12,778	$	366


	Remainder of 2018		2019		2020-2025		Total		Remainder of 2019		2020		2021-2024		Total
North America Mailing⁽¹⁾	$	39,160	$	136,602	$	209,758	$	385,520	$	196,642	$	214,546	$	288,869	$	700,057
International Mailing⁽¹⁾	12,174		35,227		48,822		96,223		23,105		19,664		21,651		64,420
Software Solutions⁽²⁾	22,780		39,503		32,645		94,928		55,521		49,884		26,118		131,523
Total	$	74,114	$	211,332	$	291,225	$	576,671	$	275,268	$	284,094	$	336,638	$	896,000



	Sales-type Lease Receivables
	North America		International		Total
Remaining for year ending December 31, 2019	$	486,499	$	52,782	$	539,281
Year ending December 31, 2020	275,321		56,077		331,398
Year ending December 31, 2021	186,002		41,078		227,080
Year ending December 31, 2022	106,014		26,276		132,290
Year ending December 31, 2023	42,879		12,511		55,390
Thereafter	2,905		1,744		4,649
Total	$	1,099,620	$	190,468	$	1,290,088



	Sales-type Lease Receivables						Loan Receivables
	North America			International			North America			International			Total
Balance at January 1, 2019	$	10,253		$	2,355		$	6,777		$	837		$	20,222
Amounts charged to expense	3,399			231			957			20			4,607
Write-offs and other	(516		)	(702		)	(1,335		)	(125		)	(2,678		)
Balance at March 31, 2019	$	13,136		$	1,884		$	6,399		$	732		$	22,151

	Sales-type Lease Receivables						Loan Receivables
	North America			International			North America			International			Total
Balance at January 1, 2018	$	7,721		$	2,812		$	7,098		$	1,020		$	18,651
Amounts charged to expense	2,186			399			1,925			140			4,650
Write-offs and other	(1,145		)	(127		)	(2,073		)	(176		)	(3,521		)
Balance at March 31, 2018	$	8,762		$	3,084		$	6,950		$	984		$	19,780



Remaining for year ending December 31, 2019	$	26,317
Year ending December 31, 2020	25,322
Year ending December 31, 2021	9,881
Year ending December 31, 2022	4,023
Year ending December 31, 2023	2,590
Thereafter	59
Total	$	68,192



Remaining for year ending December 31, 2018	$	15,092
Year ending December 31, 2019	38,021
Year ending December 31, 2020	33,721
Year ending December 31, 2021	29,989
Year ending December 31, 2022	29,012
Thereafter	92,332
Total	$	238,167


	September 30, 2018									December 31, 2017									March 31, 2019									December 31, 2018
	North America			International			Total			North America			International			Total			North America			International			Total			North America			International			Total
Sales-type lease receivables
Gross finance receivables	$	1,000,825		$	268,733		$	1,269,558		$	1,023,549		$	292,059		$	1,315,608		$	1,099,620		$	190,468		$	1,290,088		$	1,110,896		$	247,774		$	1,358,670
Unguaranteed residual values	58,565			13,163			71,728			74,093			14,202			88,295			48,204			11,671			59,875			52,637			12,772			65,409
Unearned income	(210,001		)	(56,613		)	(266,614		)	(216,720		)	(62,325		)	(279,045		)	(370,344		)	(43,966		)	(414,310		)	(383,453		)	(55,113		)	(438,566		)
Allowance for credit losses	(10,779		)	(2,264		)	(13,043		)	(7,721		)	(2,794		)	(10,515		)	(13,136		)	(1,884		)	(15,020		)	(10,252		)	(2,356		)	(12,608		)
Net investment in sales-type lease receivables	838,610			223,019			1,061,629			873,201			241,142			1,114,343			764,344			156,289			920,633			769,828			203,077			972,905
Loan receivables
Loan receivables	301,575			31,643			333,218			339,373			34,492			373,865			286,716			29,578			316,294			300,319			29,270			329,589
Allowance for credit losses	(6,712		)	(885		)	(7,597		)	(7,098		)	(1,020		)	(8,118		)	(6,399		)	(732		)	(7,131		)	(6,777		)	(837		)	(7,614		)
Net investment in loan receivables	294,863			30,758			325,621			332,275			33,472			365,747			280,317			28,846			309,163			293,542			28,433			321,975
Net investment in finance receivables	$	1,133,473		$	253,777		$	1,387,250		$	1,205,476		$	274,614		$	1,480,090		$	1,044,661		$	185,135		$	1,229,796		$	1,063,370		$	231,510		$	1,294,880


	September 30, 2018										March 31, 2019
	Sales-type Lease Receivables				Loan Receivables						Sales-type Lease Receivables				Loan Receivables
	North America		International		North America		International		Total		North America		International		North America		International		Total
1 - 90 days	$	959,594	$	262,464	$	294,349	$	31,430	$	1,547,837	$	1,065,521	$	186,947	$	280,124	$	29,302	$	1,561,894
> 90 days	41,231		6,269		7,226		213		54,939		34,099		3,521		6,592		276		44,488
Total	$	1,000,825	$	268,733	$	301,575	$	31,643	$	1,602,776	$	1,099,620	$	190,468	$	286,716	$	29,578	$	1,606,382
Past due amounts > 90 days
Still accruing interest	$	6,350	$	1,718	$	—	$	—	$	8,068	$	6,709	$	715	$	2,178	$	128	$	9,730
Not accruing interest	34,881		4,551		7,226		213		46,871		27,390		2,806		4,414		148		34,758
Total	$	41,231	$	6,269	$	7,226	$	213	$	54,939	$	34,099	$	3,521	$	6,592	$	276	$	44,488



	December 31, 2017
	Sales-type Lease Receivables				Loan Receivables
	North America		International		North America		International		Total
1 - 90 days	$	971,002	$	286,170	$	330,503	$	34,239	$	1,621,914
> 90 days	52,547		5,889		8,870		253		67,559
Total	$	1,023,549	$	292,059	$	339,373	$	34,492	$	1,689,473
Past due amounts > 90 days
Still accruing interest	$	10,807	$	1,738	$	—	$	—	$	12,545
Not accruing interest	41,740		4,151		8,870		253		55,014
Total	$	52,547	$	5,889	$	8,870	$	253	$	67,559



Remaining for year ending December 31, 2019	$	30,303
Year ending December 31, 2020	35,564
Year ending December 31, 2021	31,026
Year ending December 31, 2022	29,798
Year ending December 31, 2023	26,726
Thereafter	69,588
Total	$	223,005


	December 31, 2017		Acquisitions		Other⁽¹⁾			September 30, 2018		December 31, 2018		Divestiture			Currency impact			March 31, 2019
Global Ecommerce	$	602,461	$	—	$	(653	)	$	601,808	$	609,431	$	—		$	—		$	609,431
Presort Services	204,781		2,684		—			207,465		207,465		—			—			207,465
Commerce Services	807,242		2,684		(653		)	809,273		816,896		—			—			816,896
North America Mailing	368,905		—		(219		)	368,686		368,248		—			167			368,415
International Mailing	158,203		—		(7,456		)	150,747		147,207		(10,490		)	(3,573		)	133,144
Small & Medium Business Solutions	527,108		—		(7,675		)	519,433		515,455		(10,490		)	(3,406		)	501,559
Software Solutions	440,295		—		(3,918		)	436,377		434,160		—			1,644			435,804
Total goodwill	$	1,774,645	$	2,684	$	(12,246	)	$	1,765,083	$	1,766,511	$	(10,490	)	$	(1,762	)	$	1,754,259


Level 1 –	Unadjusted quoted prices in active markets for identical assets and liabilities.


Level 2 –	Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.


Level 3 –	Unobservable inputs that are supported by little or no market activity, may be derived from internally developed methodologies based on management’s best estimate of fair value and that are significant to the fair value of the asset or liability.


	September 30, 2018										March 31, 2019
	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Assets:
Investment securities
Money market funds / commercial paper	$	102,777	$	432,125		$	—	$	534,902		$	225,808	$	398,019		$	—	$	623,827
Equity securities	—		25,621			—		25,621			—		21,663			—		21,663
Commingled fixed income securities	1,546		20,726			—		22,272			1,600		20,655			—		22,255
Government and related securities	118,914		17,405			—		136,319			85,390		9,132			—		94,522
Corporate debt securities	—		69,924			—		69,924			—		51,677			—		51,677
Mortgage-backed / asset-backed securities	—		158,540			—		158,540			—		89,618			—		89,618
Derivatives
Foreign exchange contracts	—		2,507			—		2,507			—		1,610			—		1,610
Total assets	$	223,237	$	726,848		$	—	$	950,085		$	312,798	$	592,374		$	—	$	905,172
Liabilities:
Derivatives
Foreign exchange contracts	$	—	$	(3,888	)	$	—	$	(3,888	)	$	—	$	(3,430	)	$	—	$	(3,430	)
Total liabilities	$	—	$	(3,888	)	$	—	$	(3,888	)	$	—	$	(3,430	)	$	—	$	(3,430	)


	September 30, 2018									March 31, 2019
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
Government and related securities	$	136,967	$	980	$	(2,879	)	$	135,068	$	94,831	$	221	$	(575	)	$	94,477
Corporate debt securities	71,261		218		(1,555		)	69,924		51,769		329		(421		)	51,677
Commingled fixed income securities	1,628		—		(82		)	1,546		1,647		—		(47		)	1,600
Mortgage-backed / asset-backed securities	161,972		569		(4,001		)	158,540		90,486		335		(1,203		)	89,618
Total	$	371,828	$	1,767	$	(8,517	)	$	365,078	$	238,733	$	885	$	(2,246	)	$	237,372


Designation of Derivatives	Balance Sheet Location	September 30, 2018			December 31, 2017			Balance Sheet Location	March 31, 2019			December 31, 2018
Derivatives designated as hedging instruments
Foreign exchange contracts	Other current assets and prepayments	$	80		$	57		Other current assets and prepayments	$	175		$	61
	Accounts payable and accrued liabilities	(60		)	(144		)	Accounts payable and accrued liabilities	—			(104		)

Interest rate swap	Other assets	—			1,776

Derivatives not designated as hedging instruments
Foreign exchange contracts	Other current assets and prepayments	2,427			65			Other current assets and prepayments	1,435			1,970
	Accounts payable and accrued liabilities	(3,828		)	(191		)	Accounts payable and accrued liabilities	(3,430		)	(631		)

	Total derivative assets	$	2,507		$	1,898		Total derivative assets	$	1,610		$	2,031
	Total derivative liabilities	(3,888		)	(335		)	Total derivative liabilities	(3,430		)	(735		)
	Total net derivative (liability) asset	$	(1,381	)	$	1,563		Total net derivative (liability) asset	$	(1,820	)	$	1,296


	Three Months Ended September 30,																Three Months Ended March 31,
	Derivative Gain (Loss) Recognized in AOCI (Effective Portion)						Location of Gain (Loss) (Effective Portion)		Gain (Loss) Reclassified from AOCI to Earnings (Effective Portion)								Derivative Gain (Loss) Recognized in AOCL (Effective Portion)							Location of Gain (Loss) (Effective Portion)		Gain (Loss) Reclassified from AOCL to Earnings (Effective Portion)
Derivative Instrument	2018			2017				2018				2017				2019				2018				Location of Gain (Loss) (Effective Portion)	2019				2018
Foreign exchange contracts	$	(42	)	$	(152	)	Location of Gain (Loss) (Effective Portion)	Revenue		$	(38	)		$	(139	)		$	345			$	35		Revenue		$	111			$	(3	)
							Cost of sales		52				(59		)									Cost of sales		16				(84		)
Interest rate swap	(824		)	(229		)	Interest Expense		—				—				—				(181		)	Interest Expense		—				—
	$	(866	)	$	(381	)			$	14			$	(198	)		$	345			$	(146	)			$	127			$	(87	)

	Nine Months Ended September 30,
	Derivative Gain (Loss) Recognized in AOCL (Effective Portion)						Location of Gain (Loss) (Effective Portion)		Gain (Loss) Reclassified from AOCL to Earnings (Effective Portion)
Derivative Instrument	2018			2017				2018				2017
Foreign exchange contracts	$	111		$	(701	)	Location of Gain (Loss) (Effective Portion)	Revenue		$	38			$	(133	)
							Cost of sales		(33		)		89
Interest rate swap	(1,776		)	92			Interest Expense		—				—
	$	(1,665	)	$	(609	)			$	5			$	(44	)


		Three Months Ended September 30,							Three Months Ended March 31,
		Derivative Gain (Loss) Recognized in Earnings							Derivative Gain (Loss) Recognized in Earnings
Derivatives Instrument	Location of Derivative Gain (Loss)	2018			2017			Location of Derivative Gain (Loss)	2019		2018
Foreign exchange contracts	Selling, general and administrative expense	$	(1,948	)	$	(655	)	Selling, general and administrative expense	$	5,269	$	(4,713	)

		Nine Months Ended September 30,
		Derivative Gain (Loss) Recognized in Earnings
Derivatives Instrument	Location of Derivative Gain (Loss)	2018			2017
Foreign exchange contracts	Selling, general and administrative expense	$	(20,344	)	$	(1,716	)


��	September 30, 2018		December 31, 2017
					March 31, 2019		December 31, 2018
Carrying value	$	3,269,617	$	3,830,335	$	3,254,892	$	3,265,608
Fair value	$	3,092,977	$	3,718,986	$	3,152,589	$	3,003,678


										Severance and benefits costs			Other exit costs			Total
Balance at January 1, 2019										$	13,641		$	1,808		$	15,449
Expenses, net										3,330			268			3,598
Cash payments										(7,191		)	(953		)	(8,144		)
Balance at March 31, 2019										$	9,780		$	1,123		$	10,903
	Severance and benefits costs			Other exit costs			Total
Balance at January 1, 2018	$	42,151		$	1,569		$	43,720		$	42,151		$	1,569		$	43,720
Expenses, net	13,655			6,274			19,929			835			69			904
Cash payments	(37,511		)	(1,589		)	(39,100		)	(15,008		)	(577		)	(15,585		)
Balance at September 30, 2018	$	18,295		$	6,254		$	24,549

Balance at January 1, 2017	$	28,234		$	281		$	28,515
Expenses, net	23,832			1,712			25,544
Cash payments	(27,724		)	(718		)	(28,442		)
Balance at September 30, 2017	$	24,342		$	1,275		$	25,617
Balance at March 31, 2018										$	27,978		$	1,061		$	29,039


	Interest rate	September 30, 2018		December 31, 2017		Interest rate	March 31, 2019		December 31, 2018
Notes due March 2018	5.60%	$	—	$	250,000
Notes due March 2019	6.25%	—		300,000
Notes due September 2020	3.875%	300,000		300,000		3.875%	$	300,000	$	300,000
Notes due October 2021	3.625%	600,000		600,000		3.875%	600,000		600,000
Notes due May 2022	4.375%	400,000		400,000		4.375%	400,000		400,000
Notes due April 2023	4.7%	400,000		400,000		4.95%	400,000		400,000
Notes due March 2024	4.625%	500,000		500,000		4.625%	500,000		500,000
Notes due January 2037	5.25%	35,841		35,841		5.25%	35,841		35,841
Notes due March 2043	6.7%	425,000		425,000		6.7%	425,000		425,000
Term loans	Variable	635,000		650,000		Variable	617,500		630,000
Other debt		5,336		5,476			5,255		5,297
Principal amount		3,301,177		3,866,317			3,283,596		3,296,138
Less: unamortized costs, net		31,560		35,982			28,704		30,530
Total debt		3,269,617		3,830,335			3,254,892		3,265,608
Less: current portion long-term debt		192,649		271,057			207,231		199,535
Long-term debt		$	3,076,968	$	3,559,278		$	3,047,661	$	3,066,073


	Defined Benefit Pension Plans												Nonpension Postretirement Benefit Plans				Defined Benefit Pension Plans												Nonpension Postretirement Benefit Plans
	United States						Foreign										United States						Foreign
	Three Months Ended						Three Months Ended						Three Months Ended				Three Months Ended						Three Months Ended						Three Months Ended
	September 30,						September 30,						September 30,				March 31,						March 31,						March 31,
	2018			2017			2018			2017			2018		2017		2019			2018			2019			2018			2019		2018
Service cost	$	23		$	34		$	567		$	587		$	298	$	438	$	21		$	37		$	384		$	589		$	255	$	407
Interest cost	15,363			17,122			4,434			4,809			1,676		1,780		15,878			15,616			4,488			4,696			1,654		1,603
Expected return on plan assets	(25,281		)	(24,369		)	(8,730		)	(8,214		)	—		—		(23,179		)	(25,424		)	(8,764		)	(9,185		)	—		—
Amortization of transition credit	—			—			(2		)	(2		)	—		—		—			—			(2		)	(2		)	—		—
Amortization of prior service (credit) cost	(15		)	(15		)	(18		)	(18		)	112		74		(15		)	(15		)	63			(18		)	80		88
Amortization of net actuarial loss	7,851			7,229			1,807			2,055			338		905		7,036			8,076			1,612			1,912			511		934
Settlement/Curtailment	796			—			—			—			339		—
Net periodic benefit (income) cost	$	(1,263	)	$	1		$	(1,942	)	$	(783	)	$	2,763	$	3,197	$	(259	)	$	(1,710	)	$	(2,219	)	$	(2,008	)	$	2,500	$	3,032
Contributions to benefit plans	$	2,479		$	1,792		$	661		$	1,000		$	4,442	$	4,009	$	1,628		$	1,409		$	8,210		$	9,210		$	4,756	$	4,795

	Defined Benefit Pension Plans												Nonpension Postretirement Benefit Plans
	United States						Foreign
	Nine Months Ended						Nine Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,
	2018			2017			2018			2017			2018		2017
Service cost	$	69		$	98		$	1,731		$	1,688		$	1,109	$	1,290
Interest cost	46,087			51,488			13,721			13,993			4,888		5,321
Expected return on plan assets	(75,815		)	(73,287		)	(27,045		)	(23,956		)	—		—
Amortization of transition credit	—			—			(5		)	(6		)	—		—
Amortization of prior service (credit) cost	(45		)	(45		)	(54		)	(53		)	287		223
Amortization of net actuarial loss	23,555			21,725			5,590			5,981			2,153		2,693
Settlement/Curtailment	796			—			—			—			339		—
Net periodic benefit (income) cost	$	(5,353	)	$	(21	)	$	(6,062	)	$	(2,353	)	$	8,776	$	9,527
Contributions to benefit plans	$	5,674		$	4,691		$	10,640		$	11,391		$	13,552	$	13,027



	Preferred stock		Preference stock			Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Treasury stock			Total equity
Balance at December 31, 2017	$	1	$	441		$	323,338	$	138,367		$	5,229,584		$	(792,173	)	$	(4,710,997	)	$	188,561
Cumulative effect of accounting changes	—		—			—		—			(12,207		)	—			—			(12,207		)
Net income	—		—			—		—			178,680			—			—			178,680
Other comprehensive loss	—		—			—		—			—			(12,436		)	—			(12,436		)
Dividends paid	—		—			—		—			(105,296		)	—			—			(105,296		)
Issuance of common stock	—		—			—		(35,457		)	—			—			34,050			(1,407		)
Conversion to common stock	—		(38		)	—		(763		)	—			—			801			—
Stock-based compensation expense	—		—			—		15,771			—			—			—			15,771
Balance at September 30, 2018	$	1	$	403		$	323,338	$	117,918		$	5,290,761		$	(804,609	)	$	(4,676,146	)	$	251,666



Leases	Balance Sheet Location	March 31, 2019		December 31, 2018
Assets
Operating	Operating lease assets	$	152,139	$	156,788
Finance	Property, plant and equipment, net	11,536		10,683
Total leased assets		$	163,675	$	167,471

Liabilities
Operating	Current operating lease liabilities	$	35,219	$	37,208
	Noncurrent operating lease liabilities	124,873		127,237
Finance	Accounts payable and accrued liabilities	2,844		2,708
	Other noncurrent liabilities	7,651		7,054
Total lease liabilities		$	170,587	$	174,207



	Three Months Ended March 31,
Lease Cost	2019			2018
Operating lease expense	$	12,091		$	12,277
Finance lease expense
Amortization of leased assets	880			602
Interest on lease liabilities	172			118
Variable lease expense	5,864			5,142
Sublease income	(666		)	(249		)
Total expense	$	18,341		$	17,890



Future Lease Payments	Operating Leases		Finance Leases		Total
Remaining for year ending December 31, 2019	$	32,088	$	2,643	$	34,731
Year ending December 31, 2020	35,873		2,935		38,808
Year ending December 31, 2021	28,825		2,543		31,368
Year ending December 31, 2022	20,484		1,992		22,476
Year ending December 31, 2023	14,086		1,348		15,434
Thereafter	57,329		569		57,898
Total	188,685		12,030		200,715
Less: present value discount	28,593		1,535		30,128
Lease liability	$	160,092	$	10,495	$	170,587



Lease Term and Discount Rate	March 31, 2019	December 31, 2018
Weighted-average remaining lease term
Operating leases	7.1 years	5.9 years
Finance leases	4.1 years	3.8 years
Weighted-average discount rate
Operating leases	4.7%	4.7%
Finance leases	6.5%	6.2%



	Three Months Ended March 31,
Cash Flow Information	2019		2018
Operating cash outflows - operating leases	$	11,797	$	11,751
Operating cash outflows - finance leases	$	172	$	118
Financing cash outflows - finance leases	$	745	$	564

Leased assets obtained in exchange for new lease obligations
Operating leases	$	8,153	$	2,996
Finance leases	$	1,673	$	1,072