Henry Schein 2013 Annual Report Download - page 36

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Cyber-security risks generally associated with our information systems and our technology products and services
could adversely affect our results of operations.
We rely on information systems (IS) in our business to obtain, rapidly process, analyze and manage data to,
among other things:
• maintain and manage worldwide systems to facilitate the purchase and distribution of thousands of
inventory items from numerous distribution centers;
• receive, process and ship orders on a timely basis;
• manage the accurate billing and collections for thousands of customers;
• process payments to suppliers; and
• maintain certain of our customers’ electronic medical records.
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A cyber-attack that bypasses our IS security systems causing an IS security breach may lead to a material
disruption of our IS business systems and/or the loss of business information resulting in adverse business impact.
Risks may include, among other things:
• future results could be adversely affected due to the theft, destruction, loss, misappropriation or
release of confidential data or intellectual property;
• operational or business delays resulting from the disruption of IS systems and subsequent clean-up
and mitigation activities; and
• negative publicity resulting in reputation or brand damage with our customers, partners or industry
peers.
Our results of operations could be adversely affected if our IS systems are interrupted, damaged by unforeseen
events, cyber-attacks or fail for any extended period of time.
We develop products and provide services to our customers that are technology-based. A cyber-attack that
bypasses the security systems of our products or services causing a security breach and/or perceived security
vulnerabilities in our products or services could cause significant reputational harm. Actual or perceived
vulnerabilities may lead to claims against us by our customers and/or governmental agencies. Although our
customer license agreements typically contain provisions that eliminate or limit our exposure to such liability, there
is no assurance these provisions will withstand all legal challenges.
Failure to maintain the confidentiality of sensitive customer data in accordance with applicable regulatory
requirements, or to abide by electronic health data transmission standards, could also expose us to claims, fines and
penalties and costs for remediation. Additionally, legislative or regulatory action related to cyber-security may
increase our costs to develop or implement new technology products and services.
We have various insurance policies, including cyber liability insurance, covering risks and in amounts that we
consider adequate. There can be no assurance that the insurance coverage we maintain is sufficient or will be
available in adequate amounts or at a reasonable cost. Successful claims for misappropriation or release of
confidential or personal data brought against us in excess of available insurance or fines or other penalties assessed
or any claim that results in significant adverse publicity against us, could have an adverse effect on our business and
our reputation.