Pitney Bowes 2007 Annual Report Download - page 23

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Employees and Employee Relations
At December 31, 2007, we employed 26,267 persons in the U.S. and 9,898 persons outside the U.S. Headcount increased in
2007 compared to 2006 primarily due to our acquisitions in 2007. We believe that our current relations with employees are
very good. The large majority of our employees are not represented by any labor union. Our management follows the policy
of keeping employees informed of decisions, and encourages and implements employee suggestions whenever practicable.
ITEM 1A. – RISK FACTORS
In addition to other information and risk disclosures contained in this Form 10-K, the risk factors discussed in this section
should be considered in evaluating our business. We work to manage and mitigate these risks proactively, including through
our use of an enterprise risk management program. In our management of these risks, we also evaluate the potential for
additional opportunities that may be exploitable in mitigating these risks. Nevertheless, the following risks, some of which
may be beyond our control, could materially impact our brand and reputation or results of operations or could cause future
results to differ materially from our current expectations:
Postal regulations and processes
The majority of our revenue is directly or indirectly subject to regulation and oversight by the USPS and foreign postal
authorities. We also depend on a healthy postal sector in the geographic markets where we do business, which could be
influenced positively or negatively by legislative or regulatory changes in the United States, another country or in the
European Union. Our profitability and revenue in a particular country could be affected as a result of adverse changes in
postal regulations, the business processes and practices of individual posts, the decision of a post to enter into particular
markets in direct competition with us, and the impact of any of these changes on postal competitors that do not use our
products or services. These changes could affect product specifications, service offerings, customer behavior and the overall
mailing industry.
Accelerated decline in use of physical mail
Changes in our customers’ communication behavior, including changes in communications technologies, could adversely
impact our revenue and profitability. Accelerated decline in physical mail could also result from government actions such as
executive orders, legislation or regulations that either mandate electronic substitution, prohibit certain types of mailings,
increase the difficulty of using information or materials in the mail, or impose higher taxes or fees on mailing or postal
services. While we have introduced various product and service offerings as alternatives to physical mail, we face
competition from existing and emerging products and services that offer alternative means of communication, such as email
and electronic document transmission technologies. An accelerated increase in the acceptance of electronic delivery
technologies or other displacement of physical mail could adversely affect our business.
Reduced confidence in the mail system
Unexpected events such as the transmission of biological or chemical agents, or acts of terrorism could have a negative effect
on customer confidence in a postal system and as a result adversely impact mail volume. An unexpected and significant
interruption in the use of the mail could have an adverse effect on our business.
Dependence on third-party suppliers
We depend on third-party suppliers for a variety of services, components, supplies and a portion of our product
manufacturing. In certain instances, we rely on single sourced or limited sourced suppliers around the world because there
are no alternative sources or the relationship is advantageous due to quality or price. If production or service was interrupted
and we were not able to find alternate suppliers, we could experience disruptions in manufacturing and operations including
product shortages, an increase in freight costs, and re-engineering costs. This could result in our inability to meet customer
demand, damage our reputation and customer relationships and adversely affect our business.
Access to additional liquidity
We provide financing services to our customers for equipment, postage, and supplies. Our ability to provide these services is
largely dependent upon our continued access to the U.S. capital markets. An additional source of liquidity for the company
consists of deposits held in our wholly-owned industrial loan corporation, Pitney Bowes Bank (“Bank”). A significant credit
rating downgrade, material capital market disruptions, significant withdrawals by depositors at the Bank, or adverse changes