Xerox 2013 Annual Report Download - page 36

obtain licenses and technologies from these third parties at all or on reasonable terms, or such third parties may
demand cross-licenses to our intellectual property. It is also possible that our intellectual property rights could be
challenged, invalidated or circumvented, allowing others to use our intellectual property to our competitive
detriment. We also must ensure that all of our products comply with existing and newly enacted regulatory
requirements in the countries in which they are sold, particularly European Union environmental directives. If we fail
to accurately anticipate and meet our customers' needs through the development of new products, technologies and
service offerings or if we fail to adequately protect our intellectual property rights or if our new products are not
widely accepted or if our current or future products fail to meet applicable worldwide regulatory requirements, we
could lose market share and customers to our competitors and that could materially adversely affect our results of
operations and financial condition.
Our operating results may be negatively impacted by lower equipment placements and usage trends.
Our ability to maintain a consistent trend of revenue growth over the intermediate to longer term is largely
dependent upon expansion of our worldwide equipment placements, as well as sales of services and supplies
occurring after the initial equipment placement (post sale revenue) in the key growth markets of digital printing, color
and multifunction systems. We expect that revenue growth can be further enhanced through our document
management and consulting services in the areas of personalized and product life cycle communications, enterprise
managed print services and document content and imaging. The ability to achieve growth in our equipment
placements is subject to the successful implementation of our initiatives to provide advanced systems, industry-
oriented global solutions and services for major customers, improve direct and indirect sales productivity and
expand our indirect distribution channels in the face of global competition and pricing pressures. Our ability to
increase post sale revenue is largely dependent on our ability to increase the volume of pages printed, the mix and
price of color pages, equipment utilization and color adoption, as well as our ability to retain a high level of supplies
sales in unbundled contracts. Equipment placements typically occur through leases with original terms of three to
five years. There will be a lag between the increase in equipment placement and an increase in post sale revenues.
The ability to grow our customers' usage of our products may continue to be adversely impacted by the movement
toward distributed printing and electronic substitutes and the impact of lower equipment placements in prior periods.
If we are unable to maintain a consistent trend of revenue growth, it could materially adversely affect our results of
operations and financial condition.
We are subject to laws of the United States and foreign jurisdictions relating to individually identifiable
information, and failure to comply with those laws, whether or not inadvertent, could subject us to legal
actions and negatively impact our operations.
We receive, process, transmit and store information relating to identifiable individuals, both in our role as a service
and technology provider and as an employer. As a result, we are subject to numerous United States (both federal
and state) and foreign jurisdiction laws and regulations designed to protect individually identifiable information,
including the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the HIPAA regulations
governing, among other things, the privacy, security and electronic transmission of individually identifiable health
information, and the European Union Directive on Data Protection (Directive 95/46/EC). Other United States (both
federal and state) and foreign jurisdiction laws apply to our processing of individually identifiable information and
these laws have been subject to frequent changes, and new legislation in this area may be enacted at any time.
Changes to existing laws, introduction of new laws in this area, or failure to comply with existing laws that are
applicable to us may subject us to, among other things, additional costs or changes to our business practices,
liability for monetary damages, fines and/or criminal prosecution, unfavorable publicity, restrictions on our ability to
obtain and process information and allegations by our customers and clients that we have not performed our
contractual obligations, any of which may have a material adverse effect on our profitability and cash flow.
We are subject to breach of our security systems and service interruptions which could expose us to
liability, impair our reputation or temporarily render us unable to fulfill our service obligations under our
contracts.
We have implemented security systems with the intent of maintaining the physical security of our facilities and
protecting our customers', clients' and suppliers' confidential information and information related to identifiable
individuals against unauthorized access through our information systems or by other electronic transmission or
through the misdirection, theft or loss of physical media. These include, for example, the appropriate encryption of
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