Pitney Bowes 2014 Annual Report Download - page 21

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Our inability to obtain and protect our intellectual property and defend against claims of infringement by others may negatively impact
our operating results.
We rely on copyright, trade secret, patent and other intellectual property laws to establish and protect proprietary rights that are important
to our business. If we fail to enforce our intellectual property rights, our business may suffer. We, our clients, or our suppliers, may be
subject to third-party claims of infringement on intellectual property rights. These claims, if successful, may require us to redesign affected
products, enter into costly settlement or license agreements, pay damage awards, or face a temporary or permanent injunction prohibiting
us from marketing or selling certain products.
If we fail to comply with government contracting regulations, our operating results, brand name and reputation could suffer.
We have a significant number of contracts with governmental entities. Government contracts are subject to extensive and complex
procurement laws and regulations, along with regular audits of contract pricing and our business practices by government agencies. If
we are found to have violated some provisions of these contracts, we could be required to provide a refund, pay significant damages, or
be subject to contract cancellation, civil or criminal penalties, fines or debarment from doing business with the government. Any of these
events could not only affect us financially, but also adversely affect our brand and reputation.
We may not realize the anticipated benefits of strategic acquisitions and divestitures, which may harm our financial results.
As we increase our focus towards providing more digital technology and software solutions while maintaining a leadership role in the
mailing industry, we may make strategic acquisitions or divest certain businesses. These acquisitions and divestitures may involve
significant risks and uncertainties, which could have an adverse effect on our operating results, including:
• the loss of key employees or clients of businesses acquired or divested;
• significant charges to earnings for employee severance and other restructuring costs, goodwill and asset impairments and legal,
accounting and financial advisory fees;
• difficulties in achieving anticipated benefits or synergies from acquisitions and divestitures;
• difficulties in integrating newly acquired businesses and operations, including combining product and service offerings and
entering new markets, or reducing fixed costs previously associated with divested businesses; and
• difficulties in identifying and separating intellectual property to be divested from intellectual property we wish to keep.
If we are not successful at realizing the anticipated benefits of strategic acquisitions and divestitures, our financial results could be
negatively impacted.
Our operations expose us to the risk of material environmental liabilities, litigation and violations.
We are subject to various federal, state, local and foreign environmental protection and health and safety laws governing, among other
things:
• the generation, storage, use and transportation of hazardous materials;
• emissions or discharges of substances into the environment;
• the cleanup of contaminated sites;
• substances that may be subject to regulation in the manufacture, distribution, use or disposal of our products; and
• the health and safety of our employees.
Environmental laws are complex, change frequently and have tended to become more stringent over time. If we are found to have violated
these laws, we could be fined, criminally charged or otherwise sanctioned by regulators. In addition, private parties could bring personal
injury or other claims due to the presence of, or exposure to, hazardous substances. Certain environmental laws can assess liability on
contaminated sites retroactively, on a joint and several basis, and without any finding of noncompliance or fault. From time to time, we
may be involved in litigation over these issues. The amount and timing of costs under environmental laws are difficult to predict and
there can be no assurance that these costs will not materially adversely affect our financial condition, results of operations or cash flows.
Our investment in rebranding the company and enhancing marketing programs to build the market awareness necessary to create demand
for our businesses may not result in increased revenue and could adversely affect our profitability.
Our new brand strategy and identity are important to the next phase of our global business transformation. Our phased roll-out of the
new branding is integrated into the way we sell and service clients, including sales collateral and the digital experience of getting
information, service performance and transacting on our website. These factors are important to maintaining acceptance of our products
and services by our existing clients and achieving increased acceptance with new clients. We expect increased spending in brand
development and marketing promotion activities and if this increased spending does not result in increased revenue sufficient to offset
these expenses, our profitability could be adversely affected.