Lexmark 2011 Annual Report Download - page 23

Environmental and Regulatory Matters
Lexmark’s operations, both domestically and internationally, are subject to numerous laws and
regulations, particularly relating to environmental matters that impose limitations on the discharge of
pollutants into the air, water and soil and establish standards for the treatment, storage and disposal of
solid and hazardous wastes. Lexmark could incur substantial costs, including cleanup costs, fines and
civil or criminal sanctions, and third-party damage or personal injury claims, if we were to violate or
become liable under environmental laws. The liability for environmental remediation and other
environmental costs is accrued when Lexmark considers it probable and can reasonably estimate the
costs. Environmental costs and accruals are presently not material to our results of operations,
financial position, cash flows, or statement of changes in stockholders’ equity and comprehensive
earnings. There is no assurance that existing or future environmental laws applicable to our operations
or products will not have a material adverse effect on Lexmark’s results of operations, cash flows, or
statement of changes in stockholders’ equity and comprehensive earnings.
Lexmark has implemented numerous programs to recover, remanufacture and recycle certain of its
products and intends to continue to expand on initiatives that have a positive effect on the
environment. Lexmark is committed to maintaining compliance with all environmental laws applicable
to its operations, products and services.
Lexmark is also required to have permits from a number of governmental agencies in order to conduct
various aspects of its business. Compliance with these laws and regulations has not had, and in the
future is not expected to have, a material effect on the capital expenditures, earnings or competitive
position of the Company. There can be no assurance, however, that future changes in environmental
laws or regulations, or in the criteria required to obtain or maintain necessary permits, will not have an
adverse effect on the Company’s operations.
Lexmark is subject to legislation in an increasing number of jurisdictions that makes producers of
electrical goods, including printers, financially responsible for specified collection, recycling, treatment
and disposal of past and future covered products (sometimes referred to as “product take-back
legislation”). There is no assurance that such existing or future laws will not have a material adverse
effect on Lexmark’s operations or financial condition, although Lexmark does not anticipate that effects
of product take-back legislation will be different or more severe for Lexmark than the impacts on others
in the electronics industry.
Item 1A. Risk Factors
The following significant factors, as well as others of which we are unaware or deem to be immaterial
at this time, could materially adversely affect our business, financial condition or operating results in
the future. Therefore, the following information should be considered carefully together with other
information contained in this report. Past financial performance may not be a reliable indicator of future
performance, and historical trends should not be used to anticipate results or trends in future periods.
Economic weakness and uncertainty and foreign currency exchange rate fluctuations, could adversely
impact the Company’s revenue, operating income and other financial results.
• The Company’s revenue is largely dependent on global economic conditions and the demand
for its imaging products and associated supplies, solutions and services and ECM and BPM
software solutions and services in the markets in which the Company competes. Continued
economic weakness and global economic uncertainty could adversely affect the Company’s
results in future periods. During times of economic uncertainty, demand for the Company’s
products may decrease. Restrictions on credit globally and foreign currency exchange rate
fluctuations in certain countries may impact economic activity and the Company’s results.
Credit risk associated with the Company’s customers, channel partners and the Company’s
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