Costco 2007 Annual Report Download - page 19

These factors include political conditions, economic conditions, regulatory constraints, currency
regulations and exchange rates, and other matters in any of the countries or regions in which we
operate, now or in the future. Other factors that may impact international operations include foreign
trade, monetary and fiscal policies both of the United States and of other countries, laws and regulations
of foreign governments, agencies and similar organizations, and risks associated with having major
facilities located in countries which have been historically less stable than the United States.
Implementation of technology initiatives could disrupt our operations in the near term and fail
to provide the anticipated benefits.
We have made and will continue to make significant technology investments both in our operations and
in our administrative functions. The costs, potential problems and interruptions associated with the
implementation of technology initiatives could disrupt or reduce the efficiency of our operations in the
near term. In addition, new or upgraded technology might not provide the anticipated benefits; it might
take longer than expected to realize the anticipated benefits or the technology might fail.
Market expectations for our financial performance is high.
We believe that the price of our stock reflects high market expectations for our future operating results.
Any failure to meet these expectations for our comparable warehouse sales growth rates, earnings and
earnings per share or new warehouse openings could cause the market price of our stock to drop.
Cost related to natural disasters could unfavorably affect our financial performance.
The occurrence of one or more natural disasters, such as hurricanes or earthquakes (particularly in
California) could unfavorably affect our operations and financial performance. Such events could result in
physical damage to one or more of our properties, the temporary closure of one or more warehouses or
depots, the temporary lack of an adequate work force in a market, the temporary or long-term disruption in
the supply of products from some local and overseas suppliers, the temporary disruption in the transport
of goods from overseas, delays in the delivery of goods to our depots or warehouses within a country in
which we operate and the temporary reduction in the availability of products in our warehouses.
We are subject to a wide variety of federal, state, regional, local and international laws and
regulations relating to the use, storage, discharge, and disposal of hazardous materials and
hazardous and non-hazardous wastes, and other environmental matters.
Any failure to comply with these laws could result in costs to satisfy environmental compliance,
remediation requirements, or the imposition of severe penalties or restrictions on operations by
governmental agencies or courts that could adversely affect our operations.
We are involved in a number of legal proceedings, and while we cannot predict the outcomes of
such proceedings and other contingencies with certainty, some of these outcomes may
unfavorably affect our operations or increase our costs.
We are involved in a number of legal proceedings, including grand jury investigations, consumer,
employment, tort and other litigation. We cannot predict with certainty the outcomes of these legal
proceedings and other contingencies, including environmental remediation and other proceedings
commenced by governmental authorities. The outcome of some of these legal proceedings and other
contingencies could require us to take or refrain from taking actions which could unfavorably affect our
operations or could require us to pay substantial amounts of money. Additionally, defending against
these lawsuits and proceedings may involve significant expense and diversion of management’s
attention and resources. Our business requires compliance with a great variety of laws and regulations.
Failure to achieve compliance could subject us to lawsuits and other proceedings, and lead to damage
awards, fines and penalties.
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