Juno 2012 Annual Report Download - page 25

Table of Contents
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We transact business in different foreign currencies and may be exposed to financial market risk resulting from fluctuations in foreign currency
exchange rates, including the British Pound, the Euro, the Indian Rupee, the Swedish Krona, the Swiss Franc, and the Canadian Dollar. Revenues and
expenses in foreign currencies translate into higher or lower revenues and expenses in U.S. Dollars as the U.S. Dollar weakens or strengthens against
such other currencies. Substantially all of the revenues of our international businesses are received, and substantially all expenses are incurred, in
currencies other than the U.S. Dollar, which increases or decreases the related U.S. Dollar-reported revenues and expenses depending on the
fluctuations in foreign currency exchange rates. Certain of our key business metrics, such as the FTD segment's average order value and the Content &
Media segment's ARPU, are similarly affected by such foreign currency exchange rate fluctuations. Changes in global economic conditions, market
factors, and governmental actions, among other factors, can affect the value of these currencies in relation to the U.S. Dollar. A strengthening of the
U.S. Dollar compared to these currencies and, in particular, to the British Pound and the Euro, has had, and in future periods could have, an adverse
effect on the comparisons of our revenues and operating income against prior periods. We cannot accurately predict the impact of future foreign
currency exchange rate fluctuations on our operating results, and such fluctuations could negatively impact the comparisons of such results against prior
periods.

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The systems underlying the operations of each of our business segments are complex and diverse, and must efficiently integrate with third-party
systems, such as credit card processors. Key systems include, without limitation, order transmission, fulfillment and processing, including the system
for transmitting orders through the floral network; billing; website and database management; customer support; telecommunications network
management; advertisement serving and management systems; and internal financial systems. Some of these systems, such as customer support for our
Content & Media and Communications segments, are outsourced to third parties, and other systems, such as Interflora's order transmission, fulfillment
and billing system and FTD's customer service telephone system, are not redundant. We have experienced systems problems in the past, and we or
these third parties may experience problems in the future. In addition, if these third parties face financial or other difficulties, our business could be
adversely impacted. Any significant errors, failures, interruptions, delays, or other problems with our systems or our third-party vendors or their
systems could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
In addition, our Content & Media and Communications businesses outsource a majority of their live technical and billing support functions. These
businesses rely on customer support vendors, and we maintain only a small number of internal customer support personnel for these businesses. Our
internal customer support personnel are not equipped to provide the necessary range of customer support functions in the event that our vendors
unexpectedly become unable or unwilling to provide these services to us.


We are currently, and have been in the past, party to various legal actions and investigations. These actions may include, without limitation, claims
by private parties in connection with consumer protection and other laws, claims that we infringe third-party patents, trademarks, copyrights or other
intellectual property or proprietary rights, securities laws claims, claims involving marketing practices or unfair competition, claims in connection with
employment practices, breach of contract claims, and other business-related claims. The nature of our business could subject us to additional claims for
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