Dollar General 2015 Annual Report Download - page 86

10-K
actions filed each year has continued to increase, and recent changes and proposed changes in federal
and state laws, regulations and agency guidance may cause claims to rise even more. The outcome of
litigation, particularly class action lawsuits, regulatory actions and intellectual property claims, is
difficult to assess or quantify. Plaintiffs in these types of lawsuits may seek recovery of very large or
indeterminate amounts, and the magnitude of the potential loss relating to these lawsuits may remain
unknown for substantial periods of time. In addition, certain of these lawsuits, if decided adversely to
us or settled by us, may result in liability material to our financial statements as a whole or may
negatively affect our operating results if changes to our business operations are required. The cost to
defend future litigation may be significant. There also may be adverse publicity associated with
litigation that could negatively affect customer perception of our business, regardless of whether the
allegations are valid or whether we are ultimately found liable. As a result, litigation may adversely
affect our business, results of operations and financial condition. See Note 8 to the consolidated
financial statements for further details regarding certain of these pending matters.
Natural disasters (whether or not caused by climate change), unusual weather conditions, pandemic
outbreaks, terrorist acts, and global political events could disrupt business and result in lower sales and
otherwise adversely affect our financial performance.
The occurrence of one or more natural disasters, such as hurricanes, fires, floods, tornadoes and
earthquakes, unusual weather conditions, pandemic outbreaks, terrorist acts or disruptive global
political events, such as civil unrest in countries in which our suppliers are located, or similar
disruptions could adversely affect our business and financial performance. Uncharacteristic or
significant weather conditions can affect consumer shopping patterns, which could lead to lost sales or
greater than expected markdowns and adversely affect our short-term results of operations. To the
extent these events result in the closure of one or more of our distribution centers, a significant
number of stores, or our corporate headquarters or impact one or more of our key suppliers, our
operations and financial performance could be materially adversely affected through an inability to
make deliveries or provide other support functions to our stores and through lost sales. In addition,
these events could result in increases in fuel (or other energy) prices or a fuel shortage, delays in
opening new stores, the temporary lack of an adequate work force in a market, the temporary or
long-term disruption in the supply of products from some domestic and overseas suppliers, the
temporary disruption in the transport of goods from overseas, delay in the delivery of goods to our
distribution centers or stores, the inability of customers to reach or have transportation to our stores
directly affected by such events, the temporary reduction in the availability of products in our stores
and disruption of our utility services or to our information systems. These events also can have indirect
consequences such as increases in the costs of insurance if they result in significant loss of property or
other insurable damage.
Material damage or interruptions to our information systems as a result of external factors, staffing
shortages or challenges or difficulties in maintaining or updating our existing technology or developing or
implementing new technology could have a material adverse effect on our business or results of operations.
We depend on a variety of information technology systems for the efficient functioning of our
business and are continually improving our information processes and computer systems to better run
our business. These technology initiatives may not deliver desired results or may do so on a delayed
schedule. Additionally, such systems are subject to damage or interruption from power outages,
computer and telecommunications failures, computer viruses, cybersecurity breaches, natural disasters
and human error. Damage or interruption to these systems may require a significant investment to fix
or replace them, and we may suffer interruptions in our operations in the interim, may experience loss
or corruption of critical data and may receive negative publicity, all of which could have a material
adverse effect on our business or results of operations.
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