Lexmark 2010 Annual Report Download - page 26

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The entrance of additional competitors that are focused on printing solutions and software solutions,
including ECM solutions, could negatively impact the Company’s strategy and operating results.
• The entrance of additional competitors that are focused on printing solutions could further intensify
competition in the inkjet and laser printer markets and could have a material adverse impact on the
Company’s strategy and financial results.
• The Company acquired Perceptive Software in 2010 to strengthen its industry workflow solutions
and to compete in the ECM and document-process automation software solutions market and the
entrance of additional competitors that are focused on ECM solutions could materially impact the
Company’s strategy to expand in this market and adversely affect the Company’s financial results.
The Company may fail to realize all of the anticipated benefits of any investments, acquisitions or other
significant transactions, which could harm our financial results.
• As part of our business strategy, the Company routinely discusses, evaluates opportunities, and
may enter into agreements regarding possible investments, acquisitions, and other transactions.
Such transactions, including our acquisition of Perceptive Software, routinely involve significant
risks and challenges and the Company may not be able to realize all of the anticipated benefits of
such transactions. The Company may not be able to identify suitable opportunities on terms
acceptable to the Company. The transaction may fail to advance the Company’s business strategy.
The Company may not realize a satisfactory return on our investment. The Company may not be
able to obtain regulatory or other approvals required for the transaction. The future business
operations of an acquired entity may not be successful. The Company may not be able to retain
customers and key employees of an acquired entity. The Company may not be able to realize
expense synergies and revenue expansion goals. Disruptions from the transaction could harm
relationships with the Company’s or the acquired entity’s existing customers, business partners,
employees and suppliers. The Company may face a difficult time integrating new employees,
business systems and technology. Intangible assets and goodwill recognized by the Company in the
acquisition could become impaired if subsequent measurements of fair value and implied value,
respectively, do not support the carrying values of such assets.
The Company’s inability to perform satisfactorily under service contracts for managed print services may
negatively impact the Company’s strategy and operating results.
• The Company’s inability to perform satisfactorily under service contracts for managed print services
and other customer services may result in the loss of customers, loss of reputation and/or financial
consequences that may have a material adverse impact on the Company’s financial results and
strategy.
Increased competition in the Company’s aftermarket supplies business may negatively impact the
Company’s revenue and gross margins.
• Refill, remanufactured, clones, counterfeits and other compatible alternatives for some of the
Company’s cartridges are available and compete with the Company’s supplies business. The
Company expects competitive supplies activity to increase. Various legal challenges and
governmental activities may intensify competition for the Company’s aftermarket supplies business.
New legislation, fees on the Company’s products or litigation costs required to protect the Company’s
rights may negatively impact the Company’s cost structure, access to components and operating results.
• Certain countries (primarily in Europe) and/or collecting societies representing copyright owners’
interests have commenced proceedings to impose fees on devices (such as scanners, printers and
multifunction devices) alleging the copyright owners are entitled to compensation because these
devices enable reproducing copyrighted content. Other countries are also considering imposing
fees on certain devices. The amount of fees, if imposed, would depend on the number of products
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