# PITNEY BOWES INC /DE/ (PBI)

Informational only - not investment advice.

CIK: 0000078814
SIC: 3579 Office Machines, NEC
SIC breadcrumb: [Manufacturing](/division/D/) > [Industrial And Commercial Machinery And Computer Equipment](/major-group/35/) > [SIC 3579 Office Machines, NEC](/industry/3579/)
Latest 10-K filed: 2026-02-19
SEC page: https://www.sec.gov/edgar/browse/?CIK=78814
Filing source: https://www.sec.gov/Archives/edgar/data/78814/000162828026009650/pbi-20251231.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 1892629000 | USD | 2025 | 2026-02-20 |
| Net income | 144697000 | USD | 2025 | 2026-02-20 |
| Assets | 3168951000 | USD | 2025 | 2026-02-20 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-20. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000078814.json. Derived margins are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 2,981,323,000 | 2,784,007,000 | 3,211,522,000 | 3,205,125,000 | 3,554,075,000 | 3,673,561,000 | 2,482,883,000 | 2,078,925,000 | 2,026,598,000 | 1,892,629,000 |
| Net income | 92,805,000 | 243,528,000 | 241,811,000 | 194,319,000 | -180,376,000 | -1,351,000 | 36,940,000 | -385,627,000 | -203,597,000 | 144,697,000 |
| Diluted EPS | 0.49 | 1.30 | 1.28 | 1.10 | -1.05 | -0.01 | 0.21 | -2.20 | -1.12 | 0.84 |
| Assets | 5,837,133,000 | 6,634,606,000 | 5,938,419,000 | 5,469,958,000 | 5,224,363,000 | 4,958,871,000 | 4,741,355,000 | 4,272,185,000 | 3,397,516,000 | 3,168,951,000 |
| Liabilities | 5,940,793,000 | 6,498,859,000 | 5,836,577,000 | 5,180,804,000 | 5,153,742,000 | 4,846,239,000 | 4,680,702,000 | 4,640,761,000 | 3,975,949,000 | 3,971,311,000 |
| Stockholders' equity | -103,660,000 | 30,553,000 | 101,842,000 | 289,154,000 | 70,621,000 | 112,632,000 | 60,653,000 | -368,576,000 | -578,433,000 | -802,360,000 |
| Cash and cash equivalents | 764,522,000 | 1,009,021,000 | 867,262,000 | 924,442,000 | 921,450,000 | 732,480,000 | 668,331,000 | 600,054,000 | 469,726,000 | 284,887,000 |
| Net margin | 3.11% | 8.75% | 7.53% | 6.06% | -5.08% | -0.04% | 1.49% | -18.55% | -10.05% | 7.65% |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000078814.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-06-30 |  |  | 0.02 | reported discrete quarter |
| 2022-Q3 | 2022-09-30 |  |  | 0.03 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | -0.04 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 776,481,000 | -141,535,000 | -0.81 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 783,751,000 | -12,519,000 | -0.07 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 871,578,000 | -223,836,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 830,509,000 | -2,885,000 | -0.02 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 793,170,000 | -24,867,000 | -0.14 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 499,463,000 | -138,472,000 | -0.75 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 516,121,000 | -37,373,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 493,420,000 | 35,422,000 | 0.19 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 461,909,000 | 29,975,000 | 0.17 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 459,675,000 | 51,963,000 | 0.30 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 477,625,000 | 27,337,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 477,413,000 | 58,138,000 | 0.39 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/78814/000162828026031003/pbi-20260331.htm

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization.
Confidence: high
Filing date: 2026-05-06
Report date: 2026-03-31

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

Forward-Looking Statements

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains statements that are forward-looking. We caution readers that any forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (Securities Act) and Section 21E of the Securities Exchange Act of 1934 (Exchange Act) may change based on various factors. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on current expectations and assumptions, which we believe are reasonable; however, such statements are subject to risks and uncertainties, and actual results could differ materially from those projected or assumed in any of our forward-looking statements. Words such as "estimate," "target," "project," "plan," "believe," "expect," "anticipate," "intend," "will," "forecast," "strategy," "goal," "should," "would," "could," "may" 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, except as required by law. Forward-looking statements in this Form 10-Q speak only as of the date hereof.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, our results of operations, financial condition and forward-looking statements are subject to change and to inherent risks and uncertainties disclosed or incorporated by reference in our filings with the Securities and Exchange Commission ("SEC"). Other factors which could cause future financial performance to differ materially from expectations, include, without limitation:

•changes in postal regulations or the operations and financial health of posts in the U.S. or other major markets, or changes to the broader postal or shipping markets

•accelerated or sudden decline in physical mail or shipping volumes

•the loss of some of our larger clients

•periods of difficult economic conditions impacting the company and our clients, including inflation and rising prices, changes in interest rates and a slow-down in economic activity, including a global recession, or a prolonged U.S. government shutdown

•our ability to compete successfully

•changes in banking regulations, major bank failures, the loss of our Industrial Bank charter or limitations on our banking activities

•changes in government contracting regulations and compliance challenges

•changes in labor and transportation availability and costs

•global supply chain issues adversely impacting our third party suppliers' ability to provide us with products and services

•changes in trade policies, tariffs and regulations

•changes in senior management and Board of Directors, loss of key employees and ability to attract and retain employees

•expenses and potential impacts resulting from cyber-attacks or other cybersecurity incidents affecting us or our suppliers

•inability to comply with data privacy and protection laws and regulations

•interruptions or difficulties in the operation of our cloud-based applications and systems or those of our suppliers

•changes in credit ratings, capital market disruptions, decline in cash flows, noncompliance with debt covenants or future interest rate increases that may adversely impact our ability to access capital markets at reasonable costs

•our indebtedness, including Convertible Notes, and the impact of any conversion, repurchase or redemption of the Convertible Notes

•our success at managing customer credit risk

•changes in foreign currency exchange rates

•the risks and uncertainties associated with the Ecommerce Restructuring

•changes in tax rates, laws or regulations

•inability to protect our intellectual property rights and intellectual property infringement claims

•our success in developing and marketing new products and services and obtaining regulatory approvals, if required

•acts of nature and the impact of a pandemic on the Company and the services and solutions we offer

•shareholder activism

Further information about factors that could materially affect us, including our results of operations and financial condition, is contained in Item 1A. "Risk Factors" in our 2025 Annual Report, as supplemented by Part II, Item 1A in this Quarterly Report on Form 10-Q.

28

RESULTS OF OPERATIONS

Three Months Ended March 31,

Favorable/(Unfavorable)

2026

2025

% Change

Total revenue

$

477,413 

$

493,420 

(3)

%

Total cost of revenue

217,630 

224,299 

3 

%

Selling, general and administrative

133,377 

165,915 

20 

%

Research and development

3,794 

4,763 

20 

%

Restructuring charges

5,112 

1,400 

(100%)

Interest expense, net

25,992 

24,270 

(7)

%

Other components of pension and postretirement cost

11,034 

1,854 

(100%)

Other expense

— 

24,187 

100 

%

Income before taxes

80,474 

46,732 

72 

%

Provision for income taxes

22,336 

11,310 

(97)

%

Net income

$

58,138 

$

35,422 

64 

%

In the Condensed Consolidated Statements of Operations, we allocate a portion of total interest expense to finance interest expense which is included in Cost of financing and other. The amount of total interest expense allocated to finance interest expense is based on the average outstanding finance receivables and our overall effective interest rate for the period. For segment reporting purposes, finance interest expense is excluded from segment results.

SEGMENT RESULTS

Our segments include SendTech Solutions and Presort Services. Management measures segment profitability and performance using adjusted segment earnings before interest and taxes (EBIT). Adjusted segment EBIT is calculated as segment revenues less the related costs and expenses attributable to the segment. Segment results exclude interest, including finance interest expense, taxes, corporate expenses, restructuring charges and other items not allocated to the segments.

Effective April 1, 2025, segment reporting was revised to report the revenue and related expenses of a cross-border services contract in our SendTech Solutions reporting segment, which was previously reported in Other. Accordingly, segment results for the three months ended March 31, 2025 have been revised to conform to the current period presentation.

Effective January 1, 2026, we are excluding expense related to the U.S. and Canada pension plans from Adjusted segment EBIT as we have taken steps to terminate these plans. Prior periods were not recast.

29

SendTech Solutions

Within SendTech Solutions, we provide 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. We also offer financing alternatives that enable clients to finance equipment and product purchases, to finance or lease other manufacturers’ equipment and to provide working capital, 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.

Financial results for the SendTech Solutions segment was as follows:

Three Months Ended March 31,

Favorable/(Unfavorable)

2026

2025

% change

Services

$

143,104 

$

140,618 

2 

%

Products

88,650 

93,190 

(5)

%

Financing and other

82,193 

81,798 

— 

%

Total revenue

313,947 

315,606 

(1)

%

Cost of services

50,135 

51,219 

2 

%

Cost of products

48,680 

50,919 

4 

%

Cost of financing and other

3,212 

3,892 

17 

%

Total costs of revenue

102,027 

106,030 

4 

%

Gross margin

211,920 

209,576 

1 

%

Gross margin %

67.5 

%

66.4 

%

Selling, general and administrative

90,960 

105,851 

14 

%

Research and development

4,004 

4,891 

18 

%

Other components of pension and post retirement cost

3,426 

1,807 

(90)

%

Adjusted Segment EBIT

$

113,530 

$

97,027 

17 

%

SendTech Solutions revenue decreased $2 million in the first quarter of 2026 compared to the prior year period. Revenue in the first quarter of 2025 includes an unfavorable adjustment of $4 million related to prior periods. Products revenue declined $5 million primarily due to customers opting to extend leases of their existing advanced-technology equipment rather than purchase new equipment as well as a declining meter population. Services revenue increased $2 million while Financing and other revenue was flat compared to the prior year period.

Gross margin increased $2 million and gross margin percentage increased slightly to 67.5% from 66.4% compared to the prior year period primarily driven by the unfavorable revenue adjustment of $4 million in the first quarter of 2025 and product mix.

Selling, general and administrative ("SG&A") expense declined $15 million primarily driven by lower employee-related expenses of $5 million, lower professional and outsourcing fees of $4 million and lower marketing expenses of $2 million.

Adjusted segment EBIT was $114 million in the first quarter of 2026 compared to $97 million for the prior year period, which includes the $4 million charge from the unfavorable revenue adjustment related to prior periods.

30

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, First Class Flats, Marketing Mail, and Marketing Mail Flats/Bound Printed Matter for postal worksharing discounts.

Financial results for the Presort Services segment was as follows:

Three Months Ended March 31,

Favorable/(Unfavorable)

2026

2025

% Change

Services

$

163,466 

$

177,814 

(8)

%

Cost of services

106,020 

104,635 

(1)

%

Gross Margin

57,446 

73,179 

(21)

%

Gross Margin %

35.1 

%

41.2 

%

Selling, general and administrative

18,231 

18,353 

1 

%

Other components of net pension and postretirement cost

37 

47 

21 

%

Adjusted segment EBIT

$

39,178 

$

54,779 

(28)

%

Revenue decreased $14 million in the first quarter of 2026 compared to the prior year period primarily due to a 6% decline in total mail volumes driven by a broader market decline. The processing of First Class Mail and First Class Flats contributed revenue decreases of $10 million and $4 million, respectively.

Gross margin decreased $16 million and gross margin percentage decreased to 35.1% from 41.2% in the prior period primarily due to lower revenue and increased transportation costs of $3 million.

SG&A expense was relatively flat compared to the prior year period.

Adjusted segment EBIT was $39 million in the first quarter of 2026 compared to $55 million in the prior year period.

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, and primarily represent corporate administrative functions such as finance, human resources, legal and information technology.

Corporate expenses were as follows:

Three Months Ended March 31,

Favorable/(Unfavorable)

2026

2025

Actual % change

Corporate expenses

$

22,331 

$

32,117 

30 

%

Corporate expenses for the first quarter of 2026 decreased $10 million compared to the prior year period primarily due to lower employee-related expenses driven by actions taken under our restructuring plans.

31

CONSOLIDATED EXPENSES

SG&A Expense

SG&A expense decreased $33 million in the first quarter of 2026 compared to the prior year period. In addition to the changes in segment SG&A expense previously disc

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization.
Confidence: high

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. Actual results may differ significantly from those currently expressed. A detailed discussion of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements is outlined under "Forward-Looking Statements" and "Item 1A. Risk Factors" in this Form 10-K. All table amounts are presented in thousands of dollars.

RESULTS OF OPERATIONS

Years Ended December 31,

Favorable/(Unfavorable)

2025

2024

Actual % Change

Total revenue

$

1,892,629 

$

2,026,598 

(7)

%

Total cost of revenue

868,767 

964,298 

10 

%

Selling, general and administrative

621,567 

717,894 

13 

%

Research and development

15,278 

31,957 

52 

%

Restructuring charges

58,660 

76,915 

24 

%

Interest expense, net

101,460 

110,094 

8 

%

Other components of net pension and postretirement cost

7,543 

89,044 

92 

%

Other expense

26,830 

88,723 

70 

%

Income (loss) from continuing operations before income taxes

192,524 

(52,327)

100%

Provision (benefit) for income taxes

47,827 

(154,829)

(100%)

Income from continuing operations

144,697 

102,502 

41 

%

Loss from discontinued operations, net of tax

— 

(306,099)

100 

%

Net income (loss)

$

144,697 

$

(203,597)

100%

Years Ended December 31,

Favorable/(Unfavorable)

2024

2023

Actual % Change

Total revenue

$

2,026,598 

$

2,078,925 

(3)

%

Total cost of revenue

964,298 

1,048,315 

8 

%

Selling, general and administrative

717,894 

781,609 

8 

%

Research and development

31,957 

29,486 

(8)

%

Restructuring charges

76,915 

52,412 

(47)

%

Goodwill impairment

— 

123,574 

100 

%

Interest expense, net

110,094 

98,769 

(11)

%

Other components of net pension and postretirement cost

89,044 

(8,256)

(100%)

Other expense (income)

88,723 

(3,064)

(100%)

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 

%

Refer to Segment Results and Consolidated Expenses sections for detailed information.

17

CHANGES IN REPORTING

We recast our reporting presentation of revenue and cost of revenue to better align with our offerings. We now report Services revenue and Cost of services, which includes the previously reported Business services and Support services, Products revenue and Cost of products, which includes the previously reported Equipment sales and Supplies, and Financing and other revenue and Cost of financing and other, which includes the previously reported Financing and Rentals.

We recast our corporate expense allocation methodology to allocate all marketing and innovation expenses to our SendTech Solutions segment due to a change in how these functions are now managed.

We recast our segment reporting to report the revenue and related expenses of a cross-border services contract in our SendTech Solutions reporting segment, which was previously reported in Other operations.

Prior periods presented in this Form 10-K have been recast to conform to the current period presentation.

SEGMENT RESULTS

We operate in two segments: SendTech Solutions and Presort Services. Management measures segment profitability and performance as segment revenues less the related costs and expenses attributable to the segment. Segment results exclude interest, taxes, corporate expenses, restructuring charges and other items not allocated to the segments.

In the Consolidated Statements of Operations, we allocate a portion of total interest expense to finance interest expense, included in Cost of financing and other. For segment reporting, we exclude the allocated finance interest expense from the determination of adjusted segment EBIT.

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. We offer financing alternatives that enable clients to finance Company and other manufacturers' equipment and product purchases, a revolving credit solution that allows clients to make meter rental payments and purchase postage, services and supplies, an interest-bearing deposit solution to clients that prefer to prepay postage and meet working capital needs.

Financial performance for the SendTech Solutions segment was as follows:

Years Ended December 31,

Favorable/(Unfavorable)

2025

2024

% change

Services

$

569,403 

$

588,046 

(3)

%

Products

364,709 

430,845 

(15)

%

Financing and other

321,889 

335,141 

(4)

%

Total revenue

1,256,001 

1,354,032 

(7)

%

Cost of services

196,143 

218,108 

10 

%

Cost of products

212,366 

244,203 

13 

%

Cost of financing and other

13,807 

17,461 

21 

%

Total costs of revenue

422,316 

479,772 

12 

%

Gross margin

833,685 

874,260 

(5)

%

Gross margin %

66.4 

%

64.6 

%

Selling, general and administrative

398,230 

461,737 

14 

%

Research and development

15,968 

29,883 

47 

%

Other components of pension and post retirement costs

7,298 

(2,111)

(100%)

Adjusted Segment EBIT

$

412,189 

$

384,751 

7 

%

SendTech Solutions revenue decreased $98 million in 2025 compared to 2024. Products revenue declined $66 million primarily due to customers opting to extend leases of their existing advanced-technology equipment rather than purchase new equipment, the impact of

18

the prior year product migration and a significant deal in the prior year. Services revenue declined $19 million primarily due to the declining meter population. Financing and other revenue declined $13 million driven by the impact of the prior year product migration and mix of business. Revenue in 2025 includes an unfavorable adjustment of $4 million related to prior periods (see Note 1 to the Consolidated Financial Statements for further information).

Gross margin declined $41 million compared to the prior year. The impact of lower revenue was partially offset by headcount reductions and other cost savings initiatives resulting in an increase in gross margin percentage to 66.4% from 64.6%.

Selling, general and administrative ("SG&A") expense declined $64 million and research and development ("R&D") expense declined $14 million, primarily driven by lower employee-related expenses and overall cost savings initiatives.

Adjusted segment EBIT was $412 million in 2025, which includes the $4 million charge from the unfavorable revenue adjustment related to prior periods compared to $385 million for the prior year.

Years Ended December 31,

Favorable/(Unfavorable)

2024

2023

% change

Services

$

588,046 

$

595,319 

(1)

%

Products

430,845 

471,448 

(9)

%

Financing and other

335,141 

339,097 

(1)

%

Total revenue

1,354,032 

1,405,864 

(4)

%

Cost of services

218,108 

232,975 

6 

%

Cost of products

244,203 

265,360 

8 

%

Cost of financing and other

17,461 

19,407 

10 

%

Total costs of revenue

479,772 

517,742 

7 

%

Gross margin

874,260 

888,122 

(2)

%

Gross margin %

64.6 

%

63.2 

%

Selling, general and administrative

461,737 

485,080 

5 

%

Research and development

29,883 

29,905 

— 

%

Other components of pension and post retirement costs

(2,111)

(2,245)

(6)

%

Adjusted Segment EBIT

$

384,751 

$

375,382 

2 

%

SendTech Solutions revenue decreased $52 million in 2024 compared to 2023. Products revenue declined $41 million primarily due to customers opting to extend leases of their existing advanced-technology equipment rather than purchase new equipment. Services revenue declined $7 million primarily due to the declining meter population and continuing shift to cloud-enabled products, which was partially offset by an increase in our shipping subscriptions, including enterprise subscriptions and growth in digital delivery services due to client mix.

Gross margin declined $14 million primarily due to the decline in revenue; however, gross margin percentage increased to 64.6% from 63.2% compared to the prior year. The increase in gross margin percentage was primarily driven by improvements in gross margin due to growth in enterprise shipping subscriptions and digital delivery services.

SG&A expense declined $23 million, primarily driven by lower employee-related expenses of $17 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.

Adjusted segment EBIT was $385 million in 2024 compared to $375 million in 2023.

19

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, First Class Flats, Marketing Mail, and Marketing Mail Flats/Bound Printed Matter for postal worksharing discounts.

Financial performance for the Presort Services segment was as follows:

Years Ended December 31,

Favorable/(Unfavorable)

2025

2024

 % Change

Services

$

636,628 

$

662,587 

(4)

%

Cost of services

398,771 

417,741 

5 

%

Gross Margin

237,857 

244,846 

(3)

%

Gross Margin %

37.4 

%

37.0 

%

Selling, general and administrative

72,391 

78,860 

8 

%

Other components of net pension and postretirement cost

189 

202 

6 

%

Adjusted segment EBIT

$

165,277 

$

165,784 

— 

%

Revenue decreased $26 million in 2025 compared to 2024 primarily due to a 7% decline in total mail volumes driven by client losses and a broader market decline, partially mitigated by pricing actions. The processing of First Class Mail and First Class Flats, Marketing Mail Flats/Bound Printed Matter and Marketing Mail contributed revenue decreases of $15 million, $6 million and $5 million, respectively. Prior year revenue includes a $5 million favorable adjustment related to prior periods. See Note 1 to the Consolidated Financial Statements for more information.

Gross margin decreased $7 million compared to the prior year primarily due to the decline in revenue, partially offset by a $5 million favorable cost adjustment related to prior periods (see Note 1 to the Consolidated Financial Statements for further information). Gross margin percentage increased slightly to 37.4% from 37.0%.

SG&A expense declined $6 million compared to the prior year driven primarily by lower credit loss provision of $2 million, lower employee related expenses of $2 million and overall cost savings initiatives.

Adjusted segment EBIT was $165 million in 2025 compared to $166 million in 2024.

Years Ended December 31,

Favorable/(Unfavorable)

2024

2023

% Change

Services

$

662,587 

$

617,599 

7 

%

Cost of services

417,741 

432,229 

3 

%

Gross Margin

244,846 

185,370 

32 

%

Gross Margin %

37.0 

%

30.0 

%

Selling, general and administrative

78,860 

74,230 

(6)

%

Other components of net pension and postretirement costs

202 

228 

11 

%

Adjusted segment EBIT

$

165,784 

$

110,912 

49 

%

Revenue increased $45 million in 2024 compared to 2023 primarily due to pricing actions and product mix. The processing of First Class Mail and First Class Flats 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.

20

Gross margin increased $59 million and gross margin percentage increased to 37.0% from 30.0% in the prior year primarily due to the increase in revenue, lower transportation costs of $5 million driven by lane optimization, cost savings as a result of the 2023 Plan, and the benefits from investments made in automation and higher-throughput sortation equipment.

SG&A expense increased $5 million compared to 2023 primarily due to higher credit loss provision of $3 million.

Adjusted segment EBIT was $166 million in 2024, including the $5 million benefit from the favorable revenue adjustment, compared to $111 million in 2023.

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. Corporate expenses primarily represents corporate administrative functions such as finance, human resources, legal and information technology.

Years Ended December 31,

Favorable/(Unfavorable)

2025

2024

Actual % change

Corporate expenses

$

116,173 

$

152,503 

24 

%

Corporate expenses for 2025 decreased $36 million compared to the prior year primarily due to lower salary expense of $38 million driven by actions taken under the 2024 Plan and overall cost savings initiatives.

Years Ended December 31,

Favorable/(Unfavorable)

2024

2023

Actual % change

Corporate expenses

$

152,503 

$

175,951 

13 

%

Corporate expenses for 2024 decreased $23 million compared to the prior year primarily due to lower salary expense of $22 million due to savings from the 2023 and 2024 Plans, lower professional and outsourcing fees of $12 million, non-cash foreign currency revaluation gains on intercompany loans of $8 million, lower insurance costs of $3 million and various other expense savings totaling approximately $15 million from cost savings initiatives. These cost savings were partially offset by higher variable compensation expense of $37 million.

CONSOLIDATED EXPENSES

SG&A Expense

SG&A expense decreased $96 million in 2025 compared to 2024 primarily due to lower employee-related expenses of $88 million driven by actions taken under our restructuring plans, lower professional and outsourcing fees of $28 million, lower insurance expense of $18 million and general cost savings initiatives, partially offset by higher non-cash foreign currency revaluation losses on intercompany loans of $32 million.

SG&A expense decreased $64 million in 2024 compared to 2023 primarily driven by lower employee-related costs of $10 million, due to lower salary expense of $40 million from headcount reductions partially offset by higher variable compensation of $33 million and a favorable impact of $16 million from the revaluation of intercompany loans. SG&A expense also benefited from overall cost savings initiatives that resulted in expense savings of approximately $38 million from savings in areas such as marketing, travel, real estate and insurance.

R&D Expense

R&D expense decreased $17 million in 2025 compared to 2024 primarily due to headcount reductions and general cost savings initiatives.

R&D expense increased $2 million in 2024 compared to 2023.

21

Restructuring charges

Restructuring charges decreased $18 million in 2025 compared to 2024. Employee severance charges decreased $25 million driven by the significant number of actions taken under the 2024 Plan in the prior year, partially offset by a $7 million abandonment charge in the current year related to the closure of our corporate office in Stamford, Connecticut. See Note 12 to the Consolidated Financial Statements for further information.

Restructuring charges increased $25 million in 2024 compared to 2023 primarily driven by actions taken under the 2023 and 2024 Plans.

Other components of net pension and postretirement cost

Other components of net pension and postretirement cost were $8 million, $89 million and a benefit of $8 million in 2025, 2024 and 2023, respectively. Other components of net pension and postretirement cost in 2024 includes a settlement charge of $91 million from a targeted campaign to offer lump sum settlements to vested participants. The amount of other components of net pension and postretirement cost recognized each year will vary based on actuarial assumptions and actual results of our pension plans. See Note 14 to the Consolidated Financial Statements for further information.

Other expense (income)

Other expense (income) declined $62 million in 2025 compared to 2024 primarily due to lower charges in connection with the Ecommerce Restructuring of $55 million and a $10 million prior year asset impairment, partially offset by a higher loss on the redemption/refinancing of debt of $3 million.

Other expense (income) increased $92 million in 2024 compared to 2023 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.

Income taxes

See Note 15 to the Consolidated Financial Statements for further information.

OUTLOOK

For 2026, we expect low to mid-single digit decline in revenue driven by the continued secular decline in mailing. We expect low single digit decline in EBIT and EBIT margin, primarily driven by expected competitive pricing pressures in Presort Services, partially offset by lower worldwide operating costs from previous and continued cost-cutting actions, including savings under the 2025 Plan. Lower interest costs and share repurchases are expected to benefit earnings per share and partially offset the impacts of lower EBIT.

Within SendTech Solutions, we intend to pursue strategies that will leverage the segment's strong position, customer base and current product and technology offerings to mitigate the secular downward pressures in the mailing industry.

Within Presort Services, we are focused on increasing volume growth by maintaining competitive pricing and pursuing strategic growth opportunities.

We will also continue to implement capital allocation strategies to opportunistically reduce debt and lower interest costs, return capital to our shareholders through share repurchases and dividends and pursue other long-term investment opportunities.

22

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. At December 31, 2025 we had cash, cash equivalents and short-term investments of $297 million, which includes $44 million held at our foreign subsidiaries used to support the liquidity needs of those subsidiaries. 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. Our future capital requirements will depend on many factors, including our strategic plans, investments and stock repurchase activity levels.

Cash Flow Summary

The change in cash and cash equivalents is as follows:

2025

2024

2023

Net cash from operating activities

$

383,257 

$

229,170 

$

80,091 

Net cash from investing activities

(125,097)

(49,056)

(124,096)

Net cash from financing activities

(445,358)

(305,455)

(30,002)

Effect of exchange rate changes on cash and cash equivalents

2,359 

(4,987)

5,731 

Change in cash and cash equivalents

$

(184,839)

$

(130,328)

$

(68,276)

Operating activities

Cash flows from operating activities in 2025 improved $154 million compared to the prior year, which includes an improvement of $47 million related to discontinued operations. Excluding discontinued operations, cash flows from continuing operations improved $107 million driven primarily by changes in working capital.

Cash flows from operating activities in 2024 improved $149 million compared to the prior year driven primarily by a decline in finance receivables and lower payments of accounts payable and accrued liabilities. Cash flow from operations also benefited from lower cash outflows from discontinued operations of $107 million.

Investing activities

Cash flows from investing activities for 2025 declined $76 million compared to the prior year primarily due to higher investments in loan receivables of $52 million and lower cash from investment activities of $53 million. These declines were partially offset by higher cash under the DIP Facility of $26 million as we received reimbursements of $9 million in the current year compared to net disbursements of $17 million in the prior year.

Cash flows from investing activities for 2024 improved $75 million compared to the prior year primarily due to higher cash from investment activities of $40 million, lower investments in loan receivables of $20 million, lower cash outflows from discontinued operations of $17 million, and lower capital expenditures of $6 million, partially offset by net DIP Facility funding of $17 million.

Financing activities

Cash flows from financing activities for 2025 declined $140 million compared to the prior year primarily due to common stock repurchases of $378 million, lower cash from changes in customer account deposits at the Bank of $40 million and higher dividend payments of $15 million. These declines were partially offset by higher cash from debt activity of $280 million and prior year cash outflows related to discontinued operations of $7 million.

Cash flows from financing activities for 2024 declined $275 million compared to the prior year primarily due to higher net debt repayments of $178 million and lower cash from changes in customer account deposits at the Bank of $97 million.

Debt and Financing Activities

In the first quarter of 2025, we redeemed the remaining outstanding balance of the Notes due March 2028 and recorded a loss of $17 million. Additionally, we entered into a new senior secured credit agreement (the "New Credit Agreement"), which provided a $265 million revolving credit facility (subsequently increased to $400 million during 2025) maturing March 2028, a $160 million term loan maturing March 2028 and a $615 million term loan maturing March 2032. The proceeds from the new term loans were used to repay the outstanding balances of the Term loan due March 2026 and Term loan due March 2028, under our prior credit agreement and for general corporate purposes. We recorded a loss of $8 million in connection with this refinance.

Under the New Credit Agreement, we are required to maintain (i) a Consolidated Interest Coverage Ratio (as defined in the New Credit Agreement) of not less than 2.00 to 1.00, (ii) a Consolidated Secured Net Leverage Ratio (as defined in the New Credit

23

Agreement) of no greater than 3.00 to 1.00 and (iii) a Consolidated Total Net Leverage Ratio (as defined in the New Credit Agreement) of no greater than 5.25 to 1.00 for the fiscal quarters ending March 31, 2025 and June 30, 2025, 5.00 to 1.00 for the fiscal quarters ending September 30, 2025 and December 31, 2025 and 4.75 to 1.00 for each fiscal quarter ending on or after March 31, 2026. At December 31, 2025, we were in compliance with these financial covenants and there were no outstanding borrowings under the revolving credit facility. Borrowings under our New Credit Agreement are secured by assets of the Company.

The New Credit Agreement also contains provisions whereby if, on any day between the period commencing on September 14, 2026 and ending on March 15, 2027, the Notes due March 2027 have not been redeemed in full and liquidity is less than an amount equal to the amount to redeem the Notes due March 2027 plus $100 million, the Term loan due March 2028 and any borrowings under the revolving credit facility would become due on such date (the "Pro Rata Springing Maturity Date"), and if on any date during the period beginning on December 14, 2026 and ending on March 15, 2027, the Notes due March 2027 remain outstanding and the Pro Rata Springing Maturity Date has occurred, the Term loan due March 2032 would be become due on the date that is 91 days after the Pro Rata Springing Maturity Date. We are considering various strategies and intend to redeem the Notes due March 2027 before September 2026 either with available liquidity or refinance through the capital markets.

In August 2025, we issued an aggregate $230 million convertible senior notes due 2030 (the "Convertible Notes"). The Convertible Notes accrue interest at a rate of 1.50% per annum, payable semi-annually in arrears on February 15 and August 15 of each year and mature on August 15, 2030, unless earlier repurchased, redeemed or converted. The initial conversion rate is 70.1533 shares of common stock per $1,000 principal amount, which represents an initial conversion price of approximately $14.25 per share of common stock, subject to adjustment. Net proceeds were $221 million. We used $24.7 million of the proceeds to enter into privately negotiated capped call transactions (the "Capped Call Transactions") with certain of the initial purchasers or their respective affiliates and certain other financial institutions. The Capped Call Transactions are expected to reduce the potential dilution of our common stock upon conversion of any Convertible Notes, with such reduction subject to a cap. We also used $61.9 million of the proceeds to repurchase 5.5 million of our common stock. The remaining proceeds will be used for general corporate purposes and other strategic investments.

The Convertible Notes are senior unsecured obligations of the Company and are guaranteed jointly and severally, on a senior unsecured basis, by each of the Company’s existing and future wholly owned U.S. subsidiaries that guarantee the Company’s existing credit agreement, existing senior notes or any other series of capital market debt with an aggregate principal amount outstanding in excess of $150 million.

Conversions of the Convertible Notes will be settled by paying cash up to the aggregate principal amount of the Convertible Notes being converted and by delivering shares of our common stock in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted.

See Note 13 to the Consolidated Financial Statements for further information regarding the Convertible Notes and Capped Call Transactions.

In November 2025, we commenced a tender offer to purchase, subject to certain terms and conditions, up to $80 million aggregate principal amount of our Notes due January 2037 and Notes due March 2043. The tender offer was completed in December 2025 by purchasing validly tendered and accepted notes in the aggregate principal amount of $80 million. We recorded a gain of $10 million for the tender offer.

During 2025, we purchased an aggregate $57 million of the Notes due March 2027 and Notes due March 2029 in the open market and we repaid $32 million of principal related to our term loans.

In connection with the GEC Chapter 11 Cases, the Company, through one of its wholly owned subsidiaries, agreed to provide funding to the Ecommerce Debtors through a DIP Facility. We provided initial funding of $28 million and have received repayments of $20 million. The remaining balance on the DIP Facility is fully reserved and any future repayments will be recorded as income in the period received.

While we are focused on reducing our leverage and interest costs, we may incur additional debt or issue additional equity securities in the future.

24

Future Cash Requirements

The following table summarizes our known and contractually committed cash requirements at December 31, 2025.

Payments due in (in millions)

Total

2026

2027

2028

2029

2030

Thereafter

Debt maturities

$

2,026 

$

17 

$

368 

$

134 

$

332 

$

236 

$

939 

Lease obligations

153 

38 

35 

30 

23 

15 

12 

Purchase obligations

95 

95 

— 

— 

— 

— 

— 

Retiree medical payments

71 

9 

9 

8 

8 

7 

30 

Total

$

2,345 

$

159 

$

412 

$

172 

$

363 

$

258 

$

981 

Debt

Required debt repayments over the next 12 months are $17 million, which we anticipate satisfying through available cash on hand and cash generated from operations. We estimate that cash interest payments for the next 12 months will be $130 - $140 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 10 years and include renewal options. See Note 7 and Note 17 to the Consolidated Financial Statements for further information.

Purchase obligations

Purchase obligations include unrecorded open purchase orders for goods and services.

Off Balance Sheet Arrangements

At December 31, 2025, we had approximately $27 million outstanding letters of credit guarantees with financial institutions that are primarily issued as security for insurance, leases, customs and other performance obligations. 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. Outstanding letters of credit reduce the amount we can borrow under our revolving credit facility.

25

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. The accounting policies below have been identified by management as those policies that are most critical to our financial statements due to the estimates and assumptions required. Management believes that the estimates and assumptions used are reasonable and appropriate based on the information available at the time the financial statements were prepared; however, actual results could differ from those estimates and assumptions. See Note 1 to the Consolidated Financial Statements for a summary of our accounting policies.

Revenue recognition

We derive revenue from multiple sources including the sale and lease of equipment, equipment rentals, financing, support services and business services. Certain transactions are consummated at the same time and can therefore generate revenue from multiple sources. The most common form of these arrangements involves a sale or noncancelable lease of equipment, meter services and an equipment maintenance agreement. We are required to determine whether each product and service within the contract should be treated as a separate performance obligation (unit of accounting) for revenue recognition purposes. We recognize revenue for performance obligations when control is transferred to the customer. Transfer of control may occur at a point in time or over time, depending on the nature of the contract and the performance obligation.

For contracts that include multiple performance obligations, the total transaction price is typically determined based on the sum of standalone selling prices (SSP) for each performance obligation, which are a range of selling prices that we would sell a product or service to a customer on a separate basis. SSP are established for each performance obligation at the inception of the contract and can be observable prices or estimated. Revenue is allocated to the meter service and equipment maintenance agreement elements using their respective observable selling prices charged in standalone and renewal transactions. For sale and lease transactions, the SSP of the equipment is based on a range of observable selling prices in standalone transactions. We recognize revenue on non-lease transactions when control of the equipment transfers to the customer, which is upon delivery for customer installable models and upon installation or customer acceptance for other models. We recognize revenue on equipment for lease transactions upon shipment for customer installable models and upon installation or customer acceptance for other models.

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 allowance for credit losses as a percentage of finance receivables was 2% at both December 31, 2025 and 2024. Holding all other assumptions constant, a 0.25% increase in the allowance rate at December 31, 2025 would have reduced pre-tax income by $3 million.

Trade accounts receivable are generally due within 30 days after the invoice date. 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. The allowance for credit losses as a percentage of trade accounts receivables was 4% and 5% at December 31, 2025 and 2024, respectively. Holding all other assumptions constant, a 0.25% increase in the allowance rate at December 31, 2025 would have reduced pre-tax income by less than $1 million.

Income taxes and valuation allowance

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our annual tax rate is based on income, statutory tax rates, tax reserve changes and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant judgment is required in determining the annual tax rate and in evaluating our tax positions. We regularly assess the likelihood of tax adjustments in each of the tax jurisdictions in which we have operations and account for the related financial statement implications. We have established tax reserves that we believe are appropriate given the possibility of tax adjustments. Determining the appropriate level of tax reserves requires judgment regarding the uncertain application of tax laws. Reserves are adjusted when information becomes available or when an event occurs indicating a change in the reserve is appropriate. Changes in tax reserves could have a material impact on our financial condition or results of operations.

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. 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.

26

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.

We manage significant defined benefit pension obligations. As part of our strategy to mitigate risks associated with these plans, in 2025, we entered into buy-in contracts (the "Buy-In") with insurance carriers to secure a portion of the defined benefit pension obligations (see Note 14 to the Consolidated Financial Statements).

These transactions involved transferring the risk for a select group of plan participants of the U.S. Qualified Pension Plan and the Canada Pension Plan to high-quality insurance carriers. The purchase of these buy-in contracts were made by transferring plan assets. While the related obligations and assets remain on our balance sheet, this action reduces our exposure to future fluctuations in the value of assets and liabilities for the covered population. We anticipate this will lead to a more stable funded status in future periods. We continue to evaluate opportunities for future de-risking activities, which could include additional buy-in or potentially buy-out transactions depending on market conditions and regulatory considerations.

As a result of the de-risking of the pension plan assets, the expected rate of return on Plan assets assumption used in the determination of net periodic pension costs is lower than the prior year, and as a result, we estimate that 2026 net periodic pension costs will increase approximately $35 million over 2025 levels.

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 2025 was 5.65% and 5.45%, respectively. The discount rate used to determine 2026 net periodic pension expense for the U.S. Plan and the U.K. Plan was 5.34% and 5.50%, 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 $16 million and $11 million, respectively.

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. 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.

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. 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. 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.

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. 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 2025, 16% of our consolidated revenue was from operations outside the United States.

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