Pep Boys 2013 Annual Report Download - page 84

We are subject to environmental laws and may be subject to environmental liabilities that could have a
material adverse effect on us in the future.
We are subject to various federal, state and local environmental laws and governmental regulations
relating to the operation of our business, including those governing the handling, storage and disposal
of hazardous substances contained in the products we sell and use in our service bays, the recycling of
batteries, tires and used lubricants, the ownership and operation of real property and the sale of small
engine merchandise. When we acquire or dispose of real property or enter into financings secured by
real property, we undertake investigations that may reveal soil and/or groundwater contamination at the
subject real property. All such known contamination has either been remediated, or is in the process of
being remediated. Any costs expected to be incurred related to such contamination are either covered
by insurance or financial reserves provided for in the consolidated financial statements. However, there
exists the possibility of additional soil and/or groundwater contamination on our real property where we
have not undertaken an investigation. A failure by us to comply with environmental laws and
regulations could have a material adverse effect on us.
A breach of our security could compromise customer, employee or Company information and could harm
our reputation, lead to substantial additional costs, or possible litigation.
In the course of business, personal information about our customers and employees is stored both
electronically and physically. We have taken reasonable and appropriate steps to safeguard this
information. If this information is compromised, however, our reputation could be damaged resulting in
lost business, we could incur additional costs in remediating the issue, or we could face possible
regulatory action. The regulatory environment related to information security and privacy is constantly
evolving, and compliance with those requirements could result in additional costs. There is no
guarantee that the procedures we have implemented are adequate to safeguard all confidential
information, and a breach of this information could potentially have a negative impact on our results of
operations and financial condition.
Business interruptions may negatively impact our store hours, operability of our computer systems and
the availability and cost of merchandise which may adversely impact our sales and profitability.
War or acts of terrorism, hurricanes, tornadoes, earthquakes or other natural disasters, or the
threat of any of these calamities or others, may have a negative impact on our ability to obtain
merchandise to sell in our stores, result in certain of our stores being closed for an extended period of
time, negatively affect the lives of our customers or associates, or otherwise negatively impact our
operations. Some of our merchandise is imported from other countries. If imported goods become
difficult or impossible to import 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 receiving merchandise from our suppliers and shipping
it to our stores.
Terrorist attacks, war in the Middle East, or insurrection involving any oil producing country would
likely result in an abrupt increase in the price of crude oil, gasoline, diesel fuel and other types of
energy. Such price increases would increase the cost of doing business for us and our suppliers, and
also would negatively impact our customers’ disposable income and have an adverse impact on our
business, sales, profit margins and results of operations.
We rely extensively on our computer systems and the systems of our business partners to manage
inventory, process transactions and report results. Any such systems are subject to damage or
interruption from power outages, telecommunication failures, computer viruses, security breaches and
catastrophic events. If our computer systems or those of our business partners fail we may experience
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