AutoZone 2013 Annual Report Download - page 77

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applicable laws and regulations, to maintain an effective system of internal controls or to provide accurate and
timely financial statement information could also hurt our reputation.
Our business involves the storage of personal information about our customers and AutoZoners. Failure to protect
the security of our customers’, employees’ and company information could subject us to costly regulatory
enforcement actions, expose us to litigation and our reputation could suffer. While we take significant steps to
protect customer, employee and other confidential information, including maintaining compliance with payment
card industry standards, our security measures may be breached in the future due to cyber attack, employee error
or other acts, and unauthorized parties may obtain access to this data. To date, we have not experienced any
significant breaches of information.
Damage to our reputation or loss of consumer confidence for any of these or other reasons could have a material
adverse effect on our results of operations and financial condition, as well as require additional resources to
rebuild our reputation.
Business interruptions may negatively impact our store hours, operability of our computer and other
systems, availability of merchandise and otherwise have a material negative effect on our sales and our
business.
War or acts of terrorism, political unrest, hurricanes, windstorms, fires, earthquakes and other natural or other
disasters or the threat of any of them, may result in certain of our stores being closed for a period of time or
permanently or have a negative impact on our ability to obtain merchandise available for sale in our stores. Some
of our merchandise is imported from other countries. If imported goods become difficult or impossible to bring
into the United States, and if we cannot obtain such merchandise from other sources at similar costs, our sales and
profit margins may be negatively affected.
In the event that commercial transportation is curtailed or substantially delayed, our business may be adversely
impacted, as we may have difficulty shipping merchandise to our distribution centers and stores resulting in lost
sales and/or a potential loss of customer loyalty. Transportation issues could also cause us to cancel purchase
orders if we are unable to receive merchandise in our distribution centers.
We rely extensively on our computer systems to manage inventory, process transactions and summarize results.
Our systems are subject to damage or interruption from power outages, telecommunications failures, computer
viruses, security breaches and catastrophic events. If our systems are damaged or fail to function properly, we may
incur substantial costs to repair or replace them, and may experience loss of critical data and interruptions or
delays in our ability to manage inventories or process transactions, which could result in lost sales, inability to
process purchase orders and/or a potential loss of customer loyalty, which could adversely affect our results of
operations.
Item 1B. Unresolved Staff Comments
None.
10-K