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 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" 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, and forward-looking statements in documents that are incorporated by reference speak only as of the date of those documents. Our results of operations, financial condition and 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 theSecurities and Exchange Commission . In particular, we continue to navigate the impacts of the COVID-19 pandemic as well as the risk of a global recession, and the effects that they may have on our, and our clients' businesses. Other factors which could cause future financial performance to differ materially from expectations, and which may also be exacerbated by COVID-19 or the risk of a global recession or negative change in the economy, include, without limitation:
•declining physical mail volumes
•changes in postal regulations or the operations and financial health of posts in theU.S. or other major markets, or changes to the broader postal or shipping markets
•the loss of, or significant changes to,
•our ability to continue to grow and manage unexpected fluctuations in volumes, gain additional economies of scale and improve profitability within our Global Ecommerce segment
•changes in labor and transportation availability and costs
•global supply chain issues adversely impacting our third-party suppliers' ability to provide us products and services
•declines in demand for our ecommerce services resulting from supply chain delays or interruptions affecting our retail clients, or changes in retail consumer behavior or spending patterns
•the impacts of inflation and rising prices on our costs and expenses, and to our clients and retail consumers
•competitive factors, including pricing pressures, technological developments and the introduction of new products and services by competitors
•the loss of some of our larger clients in our Global Ecommerce and Presort Services segments
•expenses and potential impacts resulting from a breach of security, including cyber-attacks or other comparable events
•the potential impacts on our cost of debt due to potential interest rate increases
•our success at managing customer credit risk
•changes in foreign currency exchange rates, especially the impact a
strengthening
•changes in tax laws, rulings or regulations
•capital market disruptions or credit rating downgrades that adversely impact our ability to access capital markets at reasonable costs
•our success in developing and marketing new products and services and obtaining regulatory approvals, if required
•the continued availability and security of key information technology systems and the cost to comply with information security requirements and privacy laws
•changes in international trade policies, including the imposition or expansion of trade tariffs, and other geopolitical risks
•our success at managing relationships and costs with outsource providers of certain functions and operations
•changes in banking regulations or the loss of our
•increased environmental and climate change requirements or other developments in these areas
•intellectual property infringement claims
•the use of the postal system for transmitting harmful biological agents, illegal substances or other terrorist attacks
•impact of acts of nature on the services and solutions we offer
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 2021 Annual Report, as supplemented by Part II, Item 1A in this Quarterly Report on Form 10-Q. 31 --------------------------------------------------------------------------------
Overview
Financial Results Summary - Three and Six Months Ended
Revenue Three Months Ended June 30, Six Months Ended June 30, Constant Constant Actual % Currency % Actual % Currency % 2022 2021 change Change 2022 2021 change change Business services$ 551,478 $ 567,022 (3) % (2) %$ 1,148,862 $ 1,137,476 1 % 1 % Support services 107,625 115,156 (7) % (5) % 217,977 233,853 (7) % (5) % Financing 67,298 73,453 (8) % (7) % 139,327 151,265 (8) % (7) % Equipment sales 89,986 86,267 4 % 7 % 179,282 173,070 4 % 6 % Supplies 38,245 38,655 (1) % 2 % 79,306 80,879 (2) % - % Rentals 16,863 18,650 (10) % (8) % 33,683 37,857 (11) % (10) % Total revenue$ 871,495 $ 899,203 (3) % (2) %$ 1,798,437 $ 1,814,400 (1) % - % Revenue Three Months Ended June 30, Six Months Ended June 30, Constant Constant Actual % currency % Actual % currency % 2022 2021 change change 2022 2021 change change Global Ecommerce$ 393,770 $ 418,429 (6) % (5) %$ 812,297 $ 831,515 (2) % (2) % Presort Services 138,934 134,619 3 % 3 % 299,478 277,745 8 % 8 % SendTech Solutions 338,791 346,155 (2) % - % 686,662 705,140 (3) % (1) % Total revenue$ 871,495 $ 899,203 (3) % (2) %$ 1,798,437 $ 1,814,400 (1) % - % Segment EBIT Three Months Ended June 30, Six Months Ended June 30, 2022 2021 % change 2022 2021 % change Global Ecommerce$ (28,825) $ (10,831) >(100%)$ (42,521) $ (37,207) (14) % Presort Services 12,851 16,134 (20) % 32,483 35,185 (8) % SendTech Solutions 95,565 107,121 (11) % 200,140 221,591 (10) % Total Segment EBIT$ 79,591 $ 112,424 (29) %$ 190,102 $ 219,569 (13) % Revenue decreased 3% (2% at constant currency) in the second quarter of 2022 compared to the prior year primarily driven by a decrease in business services revenue due to lower cross-border volumes, lower support services revenue driven by a declining meter population and a shift to cloud-enabled products and lower financing revenue due to a declining lease portfolio. Global Ecommerce revenue decreased 6% (5% at constant currency), SendTech Solutions revenue declined 2% (flat at constant currency) and Presort Services revenue increased 3%. Segment EBIT in the quarter decreased 29% compared to the prior year period. Global Ecommerce EBIT decreased$18 million primarily due to the decline in revenue and increased operating expenses. Presort Services EBIT decreased 20% primarily due to increased transportation and labor costs and SendTech Solutions EBIT decreased 11% primarily driven by the decline in revenue. Refer to Results of Operations section for further information. 32
--------------------------------------------------------------------------------
Outlook
We see market opportunities for our businesses and are making investments in new solutions and services. This includes investments in our physical networks in Global Ecommerce and Presort Services for greater efficiency and economies of scale and upgrading our technologies across all three segments. We are also executing against initiatives to improve efficiencies in each business and in Corporate shared services. Our mix of business continues to shift to higher growth, lower margin markets, and while the investments we are making today may put further near-term downward pressure on our margins, we expect these investments to provide a platform for long-term growth and margin improvements. On a consolidated basis, we expect revenue growth in 2022 compared to 2021 from a low-single digit percentage decline to low-single digit percentage growth. Although we expect some continued growth in the demand and costs for transportation services and labor, we expect margin improvements in the second half of the year from increased productivity and pricing initiatives. Supply chain delays are slowing our receipt and installation of equipment and technologies designed to increase automation and drive productivity in Global Ecommerce and Presort Services. Supply chain delays are also affecting our ability to receive required parts and components for our SendTech Solutions products on a timely basis. We will continue to take proactive steps to manage our operations and mitigate the financial impacts of these higher costs and supply chain issues; however, some of the factors are not within our control, and the duration and severity of supply chain issues is unknown and unpredictable. Expectations for the remainder of the year are dependent on several external factors, including no further weakening of the global economy or additional shut-downs related to COVID-19, continued improvement in labor availability, changes in fuel price expectations, and no additional adverse geopolitical developments. 33
-------------------------------------------------------------------------------- RESULTS OF OPERATIONS In our revenue discussion, we may refer to revenue growth on a constant currency basis. Constant currency measures exclude the impact of changes in currency exchange rates from the prior period under comparison. We believe that excluding the impacts of currency exchange rates provides investors with a better understanding of the underlying revenue performance. Constant currency change is calculated by converting the current period non-U.S. dollar denominated revenue using the prior year's exchange rate. Where constant currency measures are not provided, the actual change and constant currency change are the same. Management measures segment profitability and performance using segment earnings before interest and taxes (EBIT), which is calculated by deducting from segment revenue the related costs and expenses attributable to the segment. Segment EBIT excludes interest, taxes, unallocated corporate expenses, restructuring charges, asset and goodwill impairment charges and other items not allocated to a business segment. Management believes that Segment EBIT provides investors a useful measure of operating performance and underlying trends of the business. Segment EBIT may not be indicative of our overall consolidated performance and should be read in conjunction with our consolidated results of operations. Effective for 2022, we refined our methodology for allocating transportation costs between Global Ecommerce and Presort Services, resulting in an increase to Global Ecommerce EBIT and a corresponding decrease to Presort Services EBIT of approximately$3 million and$7 million for the three and six months endedJune 30, 2022 , respectively. REVENUE AND SEGMENT EBIT Global Ecommerce Global Ecommerce includes the revenue and related expenses from business to consumer logistics services for domestic and cross-border delivery, returns and fulfillment. Revenue Cost of Revenue Gross Margin Three Months Ended June 30, Three Months Ended June 30,
Three Months Ended
Constant Actual % Currency % 2022 2021 change change 2022 2021 2022 2021 Business services$ 393,770 $ 418,429 (6) % (5) %$ 356,025 $ 373,347 9.6 % 10.8 % Segment EBIT Three Months Ended June 30, Actual % 2022 2021 change Segment EBIT$ (28,825) $ (10,831) >(100%) Global Ecommerce revenue decreased 6% (5% at constant currency) in the second quarter of 2022 compared to the prior year period primarily due to cross-border volume declines due in part, to a strengtheningU.S. dollar and weakening global economic factors. Gross margin decreased$7 million and gross margin percentage decreased to 9.6% from 10.8% compared to the prior year period, primarily due to the decline in revenue and higher postal costs of$3 million , partially offset by margin improvements in domestic parcel delivery services and$3 million favorability from the revised transportation cost allocation methodology. Segment EBIT for the second quarter of 2022 was a loss of$29 million compared to a loss of$11 million in the prior year period. The EBIT degradation was driven by the decline in gross margin of$7 million as well as increased operating expenses of$11 million , driven primarily by higher credit card fees and higher credit loss provision of$4 million and$3 million , respectively. 34 -------------------------------------------------------------------------------- Revenue Cost of Revenue Gross Margin Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, Constant Actual % Currency % 2022 2021 change change 2022 2021 2022 2021 Business services$ 812,297 $ 831,515 (2) % (2) %$ 724,493 $ 757,655 10.8 % 8.9 % Segment EBIT Six Months Ended June 30, Actual % 2022 2021 change Segment EBIT$ (42,521) $ (37,207) (14) % Global Ecommerce revenue decreased 2% in the first half of 2022 compared to the prior year period due primarily to lower volumes, partially offset by pricing actions. Cross-border and digital delivery volumes contributed revenue declines of 5% and 2%, respectively, which were partially offset by domestic parcel delivery volumes contributing revenue growth of 6%. Gross margin increased$14 million and gross margin percentage increased to 10.8% from 8.9% compared to the prior year period. The increase was primarily due to pricing actions, improved warehouse productivity, margin improvements in domestic parcel delivery and fulfillment services and a decrease in transportation costs of$7 million , primarily driven by the revised transportation cost allocation methodology. Partially offsetting these increases were lower revenue from cross-border and digital delivery services and higher postal costs of$12 million . Segment EBIT for the first half of 2022 was a loss of$43 million compared to a loss of$37 million in the prior year period. The EBIT decline was driven primarily by increased operating expenses of$19 million primarily driven by higher credit card fees of$9 million , higher employee-related expenses of$6 million and higher credit loss provision of$4 million , partially offset by the increase in gross margin of$14 million .
Presort Services
Presort Services includes revenue and related expenses from sortation services to qualify large volumes of First Class Mail, Marketing Mail, Marketing Mail Flats and Bound Printed Matter for postal worksharing discounts. Revenue Cost of Revenue Gross Margin Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, Constant Actual % Currency % 2022 2021 change change 2022 2021 2022 2021 Business services$ 138,934 $ 134,619 3 % 3 %$ 111,305 $ 103,175 19.9 % 23.4 % Segment EBIT Three Months Ended June 30, Actual % 2022 2021 change Segment EBIT$ 12,851 $ 16,134 (20) % Presort Services revenue increased 3% in the second quarter of 2022 compared to the prior year period. The processing of First Class Mail and Marketing Mail contributed revenue growth of 2% and 1%, respectively, primarily due to the impact of pricing actions and product mix. Gross margin decreased$4 million and gross margin percentage declined to 19.9% from 23.4%. Segment EBIT decreased$3 million , or 20% compared to the prior year period. In the second quarter of 2022, gross margin and segment EBIT were impacted by higher transportation costs of$7 million primarily driven by the revised transportation cost allocation methodology of$3 million and higher fuel costs of$2 million , and increased labor costs of$4 million , primarily due to wage increases. The impact of these higher costs has been partially offset through productivity gains and pricing actions. 35 -------------------------------------------------------------------------------- Revenue Cost of Revenue Gross Margin Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, Constant Actual % Currency % 2022 2021 change change 2022 2021 2022 2021 Business services$ 299,478 $ 277,745 8 % 8 %$ 235,956 $ 212,174 21.2 % 23.6 % Segment EBIT Six Months Ended June 30, Actual % 2022 2021 change Segment EBIT$ 32,483 $ 35,185 (8) % Presort Services revenue increased 8% in the first half of 2022 compared to the prior year period. The processing of First Class Mail, Marketing Mail and Marketing Mail Flats and Bound Printed Matter contributed revenue growth of 5%, 2% and 1%, respectively, primarily due to the impact of pricing actions. Gross margin decreased$2 million and gross margin percentage declined to 21.2% from 23.6%. Segment EBIT decreased$3 million , or 8% in the first half of 2022 compared to the prior year period. During the first half of the year, gross margin and segment EBIT were impacted by higher transportation costs of$15 million primarily driven by tight demand for these services, higher fuel costs and the revised transportation cost allocation methodology, and higher labor costs of$12 million due to higher demand for labor and wage increases. The impact of these higher costs has been partially offset through pricing actions and productivity improvements.
SendTech Solutions
SendTech Solutions includes the revenue and related expenses from physical and digital mailing and shipping technology solutions, financing, services, supplies and other applications to help simplify and save on the sending, tracking and receiving of letters, parcels and flats. Revenue Cost of Revenue Gross Margin Three Months Ended June 30, Three Months Ended June 30,
Three Months Ended
Constant Actual % Currency % 2022 2021 change change 2022 2021 2022 2021 Business services$ 18,774 $ 13,974 34 % 35 %$ 9,858 $ 6,247 47.5 % 55.3 % Support services 107,625 115,156 (7) % (5) % 37,365 37,095 65.3 % 67.8 % Financing 67,298 73,453 (8) % (7) % 12,533 11,773 81.4 % 84.0 % Equipment sales 89,986 86,267 4 % 7 % 63,232 61,503 29.7 % 28.7 % Supplies 38,245 38,655 (1) % 2 % 10,957 10,467 71.4 % 72.9 % Rentals 16,863 18,650 (10) % (8) % 7,401 6,013 56.1 % 67.8 % Total revenue$ 338,791 $ 346,155 (2) % - %$ 141,346 $ 133,098 58.3 % 61.5 % Segment EBIT Three Months Ended June 30, Actual % 2022 2021 change Segment EBIT$ 95,565 $ 107,121 (11) % SendTech Solutions revenue decreased 2% (flat at constant currency) in the second quarter of 2022 compared to the prior year period. Support services revenue declined 7% (5% at constant currency) primarily due to a declining meter population and shift to cloud-enabled products, which generally require less service. Financing revenue declined 8% (7% at constant currency) primarily due to lower lease extensions as more clients opted to lease new equipment rather than extend leases on existing equipment. Partially offsetting these decreases, business services revenue increased 34% (35% at constant currency) primarily due to growth in subscription services and equipment sales revenue increased 4% (7% at constant currency), due in part, to customers upgrading equipment to comply with new security requirements. 36 -------------------------------------------------------------------------------- Gross margin decreased$16 million , gross margin percentage decreased to 58.3% from 61.5% and segment EBIT decreased$12 million , or 11%. In the second quarter of 2022, gross margin and segment EBIT were impacted by the decrease in higher margin support services revenue and financing revenue. Segment EBIT in the quarter benefited from lower operating expenses of$4 million , primarily due to cost management. Revenue Cost of Revenue Gross Margin Six Months Ended June 30, Six Months Ended June 30,
Six Months Ended
Constant Actual % Currency % 2022 2021 change change 2022 2021 2022 2021 Business services$ 37,087 $ 28,216 31 % 32 %$ 19,740 $ 12,315 46.8 % 56.4 % Support services 217,977 233,853 (7) % (5) % 74,300 73,323 65.9 % 68.6 % Financing 139,327 151,265 (8) % (7) % 24,135 23,659 82.7 % 84.4 % Equipment sales 179,282 173,070 4 % 6 % 126,673 123,293 29.3 % 28.8 % Supplies 79,306 80,879 (2) % - % 22,431 21,678 71.7 % 73.2 % Rentals 33,683 37,857 (11) % (10) % 12,668 12,460 62.4 % 67.1 % Total revenue$ 686,662 $ 705,140 (3) % (1) %$ 279,947 $ 266,728 59.2 % 62.2 % Segment EBIT Six Months Ended June 30, Actual % 2022 2021 change Segment EBIT$ 200,140 $ 221,591 (10) % SendTech Solutions revenue decreased 3% (1% at constant currency) in the second half of 2022 compared to the prior year period. Support services revenue declined 7% (5% at constant currency) primarily due to a declining meter population and shift to cloud-enabled products. Financing revenue declined 8% (7% at constant currency) primarily due to lower lease extensions as more clients opted to lease new equipment rather than extend leases on existing equipment. Partially offsetting these decreases, business services revenue increased 31% (32% at constant currency) primarily due to growth in subscription services and equipment sales revenue increased 4% (6% at constant currency). Gross margin for the second half of 2022 decreased$31 million and gross margin percentage decreased to 59.2% from 62.2%. Segment EBIT decreased$21 million , or 10%. For the first half of 2022, gross margin and segment EBIT were impacted by the declines in higher margin support services revenue and financing revenue. Segment EBIT for the first half of 2022 benefited from lower operating expenses of$10 million , due in part, to lower employee-related expenses and other cost savings. 37
--------------------------------------------------------------------------------
UNALLOCATED CORPORATE EXPENSES
The majority of selling, general and administrative (SG&A) expenses are recorded directly or allocated to our reportable segments. SG&A expenses not recorded directly, or allocated to our reportable segments, are reported as unallocated corporate expenses. Unallocated corporate expenses primarily represents corporate administrative functions such as finance, marketing, human resources, legal, information technology and innovation. Three Months Ended June 30, Six Months Ended June 30, Actual % Actual % 2022 2021 change 2022 2021 change Unallocated corporate expenses$ 40,761 $ 56,316 (28) %$ 98,595 $ 113,781 (13) %
Unallocated corporate expenses decreased
CONSOLIDATED EXPENSES
Selling, general and administrative
SG&A expense for the second quarter of 2022 declined$10 million compared to the prior year period, primarily due to lower variable compensation expense of$18 million , partially offset by higher credit loss provision of$4 million and higher professional fees of$2 million . SG&A expense for the first half of 2022 declined$5 million compared to the prior year period, primarily due to lower variable compensation expense of$16 million , partially offset by higher travel costs of$4 million , credit loss provision of$2 million and professional fees of$1 million .
Research and development (R&D)
R&D expense for the second quarter and first half of 2022 was
Restructuring charges
Restructuring charges, consisting of costs for employee severance and facility closures, were$4 million for the second quarter and$8 million for the first half of 2022. See Note 9 to the Condensed Consolidated Financial Statements for further information. Other (income) expense Other (income) expense for the first six months of 2022 includes a$14 million gain on the sale of ourShelton, Connecticut office building, a$3 million gain from the 2019 sale of a business and a charge of$5 million from the early redemption of debt. See Notes 10 and 16 to the Condensed Consolidated Financial Statements for further information.
Income taxes
The effective tax rate for the three and six months ended
38 -------------------------------------------------------------------------------- LIQUIDITY AND CAPITAL RESOURCES AtJune 30, 2022 , we had cash, cash equivalents and short-term investments of$582 million , which includes$153 million held at our foreign subsidiaries used to support the liquidity needs of those subsidiaries. Our ability to maintain adequate liquidity for our operations is dependent upon a number of factors, including our revenue and earnings, our clients' ability to pay their balances on a timely basis, the impacts of changing macroeconomic and geopolitical conditions and our ability to manage costs and improve productivity. At this time, we believe that existing cash and investments, cash generated from operations and borrowing capacity under our$500 million revolving credit facility will be sufficient to fund our cash needs for the next 12 months.
Cash Flow Summary
Changes in cash and cash equivalents were as follows:
2022 2021 Change Net cash from operating activities$ 45,694 $ 144,729 $ (99,035) Net cash from investing activities (27,518) (68,034) 40,516 Net cash from financing activities (166,504) (199,024) 32,520 Effect of exchange rate changes on cash and cash equivalents (13,455) 349 (13,804) Change in cash and cash equivalents$ (161,783) $ (121,980) $ (39,803) Operating Activities Cash flows from operating activities in 2022 declined$99 million compared to the prior year period primarily due to the timing of collections of receivables, lower customer deposits, the timing of insurance premium payments and other working capital changes.
Investing Activities
Cash flows from investing activities for 2022 increased$41 million compared to the prior year, primarily due to higher proceeds from the sale of businesses and assets of$25 million , lower capital expenditures of$20 million and net proceeds of$4 million from other investment activities. Cash flows from investing activities in 2022 include proceeds of$51 million from the sale of ourShelton facility and$9 million related to the 2019 sale of a business. Cash flows from investing activities in 2021 include net proceeds of$28 million from the sale of Tacit and$2 million for other asset sales.
Financing Activities
Cash flows from financing activities for 2022 improved$33 million compared to the prior year primarily due to lower net repayments of debt of$37 million and lower premiums and fees paid to refinance debt of$42 million . These improvements were partially offset by lower cash flow from changes in customer deposits at thePB Bank of$32 million and$13 million of common stock repurchases.
Financings and Capitalization
In
The credit agreement that governs our$500 million secured revolving credit facility and term loans contains financial and non-financial covenants. AtJune 30, 2022 , we were in compliance with all covenants and there were no outstanding borrowings under the revolving credit facility. Each quarter, our Board of Directors considers whether to approve the payment, as well as the amount, of a dividend. There are no material restrictions on our ability to declare dividends. We expect to continue to pay a quarterly dividend; however, no assurances can be given.
Contractual Obligations and Off-Balance Sheet Arrangements
As ofJune 30, 2022 , we have entered into real estate and equipment leases with aggregate payments of$124 million and terms ranging from four to eight years that have not commenced. Most of these leases are expected to commence throughout the second half of 2022 and some into 2023. AtJune 30, 2022 , there are no off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our financial condition, results of operations or liquidity. 39 --------------------------------------------------------------------------------
Critical Accounting EstimatesGoodwill Goodwill is tested annually for impairment at the reporting unit level during the fourth quarter or sooner if circumstances indicate an impairment may exist. The impairment test for goodwill determines the fair value of each reporting unit and compares it to the reporting unit's carrying value, including goodwill. If the fair value of a reporting unit exceeds the carrying value of the net assets assigned to that reporting unit, goodwill is not impaired and no further testing is required. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, the goodwill impairment loss is calculated as the difference between these amounts, limited to the amount of goodwill allocated to the reporting unit. We determined that the agreement to sellBorderfree was a triggering event that indicated an impairment may exist. Accordingly, we performed a goodwill impairment test of the Global Ecommerce reporting unit to assess the recoverability of the carrying value of remaining goodwill. We engaged a third-party to assist in the determination of the fair value of the reporting unit. The results of our test indicated that no impairment existed; however, the estimated fair value of the Global Ecommerce reporting unit exceeded its carrying value by less than 20%. The determination of fair value relied on internal projections developed using numerous estimates and assumptions that are inherently subject to significant uncertainties. These estimates and assumptions included revenue growth, profitability, cash flows, capital spending and other available information. The determination of fair value also incorporated a risk-adjusted discount rate, terminal growth rates and other assumptions that market participants may use. Changes in any of these estimates or assumptions could materially affect the determination of fair value and the associated goodwill impairment assessment. Potential events and circumstances that could have an adverse effect on our estimates and assumptions include, but are not limited to, declining revenue, our inability to grow volumes, gain additional economies of scale and improve profitability, continued increases in costs and rising interest rates. The goodwill balance related to the Global Ecommerce reporting unit atJune 30, 2022 was$339 million . We will continue to monitor and evaluate the carrying value of goodwill for this reporting unit, and should facts and circumstances change, a non-cash impairment charge could be recorded in the future.
Regulatory Matters
There have been no significant changes to the regulatory matters disclosed in our 2021 Annual Report.
© Edgar Online, source