International Paper 2014 Annual Report Download - page 47

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restricting existing activities and products, subjecting
them to escalating costs. For example, we have
incurred, and expect that we will continue to incur,
significant capital, operating and other expenditures
complying with applicable environmental laws and
regulations. There can be no assurance that future
remediation requirements and compliance with existing
and new laws and requirements, including with global
climate change laws and regulations, Boiler MACT and
NAAQSs, will not require significant expenditures, or
that existing reserves for specific matters will be
adequate to cover future costs. We could also incur
substantial fines or sanctions, enforcement actions
(including orders limiting our operations or requiring
corrective measures), natural resource damages
claims, cleanup and closure costs, and third-party
claims for property damage and personal injury as a
result of violations of, or liabilities under, environmental
laws, regulations, codes and common law. The amount
and timing of environmental expenditures is difficult to
predict, and, in some cases, liability may be imposed
without regard to contribution or to whether we knew
of, or caused, the release of hazardous substances. As
another example, we are subject to a number of labor
and employment laws and regulations that could
significantly increase our operating costs and reduce
our operational flexibility.
RESULTS OF LEGAL PROCEEDINGS COULD HAVE
A MATERIAL EFFECT ON OUR CONSOLIDATED
FINANCIAL STATEMENTS. The costs and other
effects of pending litigation against us cannot be
determined with certainty. Although we believe that the
outcome of any pending or threatened lawsuits or
claims, or all of them combined, will not have a material
effect on our business or consolidated financial
statements, there can be no assurance that the
outcome of any lawsuit or claim will be as expected.
RISKS RELATING TO OUR OPERATIONS
MATERIAL DISRUPTIONS AT ONE OF OUR
MANUFACTURING FACILITIES COULD
NEGATIVELY IMPACT OUR FINANCIAL RESULTS.
We operate our facilities in compliance with applicable
rules and regulations and take measures to minimize
the risks of disruption at our facilities. A material
disruption at our corporate headquarters or one of our
manufacturing facilities could prevent us from meeting
customer demand, reduce our sales and/or negatively
impact our financial condition. Any of our manufacturing
facilities, or any of our machines within an otherwise
operational facility, could cease operations
unexpectedly due to a number of events, including:
• fires, floods, earthquakes, hurricanes or other
catastrophes;
• the effect of a drought or reduced rainfall on its
water supply;
• the effect of other severe weather conditions on
equipment and facilities;
• terrorism or threats of terrorism;
• domestic and international laws and regulations
applicable to our Company and our business
partners, including joint venture partners, around
the world;
• unscheduled maintenance outages;
• prolonged power failures;
• an equipment failure;
• a chemical spill or release;
• explosion of a boiler;
• damage or disruptions caused by third parties
operating on or adjacent to one of our
manufacturing facilities;
• disruptions in the transportation infrastructure,
including roads, bridges, railroad tracks and
tunnels;
• widespread outbreak of an illness or any other
communicable disease, or any other public health
crisis;
• labor difficulties; and
• other operational problems.
Any such downtime or facility damage could prevent us
from meeting customer demand for our products and/
or require us to make unplanned expenditures. If one
of these machines or facilities were to incur significant
downtime, our ability to meet our production targets and
satisfy customer requirements could be impaired,
resulting in lower sales and having a negative effect on
our business and financial results.
WE ARE SUBJECT TO CYBER-SECURITY RISKS
RELATED TO BREACHES OF SECURITY
PERTAINING TO SENSITIVE COMPANY,
CUSTOMER, EMPLOYEE AND VENDOR
INFORMATION AS WELL AS BREACHES IN THE
TECHNOLOGY THAT MANAGES OPERATIONS
AND OTHER BUSINESS PROCESSES. Our business
operations rely upon secure information technology
systems for data capture, processing, storage and
reporting. Despite careful security and controls design,
implementation, updating and independent third party
verification, our information technology systems, and
those of our third party providers, could become subject
to cyber attacks. Network, system, application and data
breaches could result in operational disruptions or
information misappropriation including, but not limited
to interruption to systems availability, denial of access