Pitney Bowes 2015 Annual Report Download - page 47

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Restructuring
We have undertaken restructuring actions which require management to utilize certain estimates related to the amount and timing of
expenses. If the actual amounts differ from our estimates, the amount of the restructuring charges could be impacted. On a quarterly basis,
we update our estimates of future remaining obligations and costs associated with all restructuring actions and compare these updated
estimates to our current restructuring reserves, and make adjustments if necessary.
Loss contingencies
In the ordinary course of business, we are routinely defendants in, or party to, a number of pending and threatened legal actions. On a
quarterly basis, we review the status of each significant matter and assess the potential financial exposure. If the potential loss from any
claim or legal action is considered probable and can be reasonably estimated, we establish a liability for the estimated loss. The assessment
of the ultimate outcome of each claim or legal action and the determination of the potential financial exposure requires significant
judgment. Estimates of potential liabilities for claims or legal actions are based only on information that is available at that time. As
additional information becomes available, we may revise our estimates, and these revisions could have a material impact on our results
of operations and financial position.
Legal and Regulatory Matters
See Legal Proceedings in Item 3 for information regarding our legal proceedings and Other Tax Matters in Note 15 to the Consolidated
Financial Statements for regulatory matters regarding our tax returns.
Foreign Currency Exchange
During 2015, we derived 25% of our consolidated revenue from operations outside the United States. The functional currency for most
of our foreign operations is the local currency. Our largest foreign currency exposures are to the British pound, Euro, Canadian dollar,
Australian dollar and Japanese Yen (see Note 10 to the Consolidated Financial Statements for information regarding our foreign exchange
derivative instruments). Changes in the value of the U.S. dollar relative to the currencies of countries in which we operate impact our
reported assets, liabilities, revenue and expenses. Exchange rate fluctuations can also impact the settlement of intercompany receivables
and payables between our subsidiaries in different countries. For the years ended December 31, 2015, 2014 and 2013, the translation of
foreign currencies to U.S. dollar decreased revenues by 4.0%, 0.4% and 0.4%, respectively. A continuing strong U.S. dollar could adversely
affect our reported revenues and profitability, both from a translation perspective as well as a competitive perspective, as the cost of
international competitors' products and solutions improve relative to products and solutions sold from the U.S. A strengthening dollar
could also continue to affect the demand for U.S. goods sold to consumers in other countries through our global ecommerce solutions.