Redbox 2014 Annual Report Download - page 21

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Failure to comply with these laws and regulations could result in, among other things, revocation of required licenses
or permits, loss of approved status, termination of contracts, administrative enforcement actions and fines, class action lawsuits,
cease and desist orders and civil and criminal liability. The occurrence of one or more of these events, as well as the increased
cost of compliance, could materially adversely affect our business, financial condition and results of operations.
Events outside of our control, including the current economic environment, have negatively affected, and could continue
to negatively affect, consumers’ use of our products and services.
Our consumers’ use of many of our products and services is dependent on discretionary spending, which is affected by,
among other things, economic and political conditions, consumer confidence, interest and tax rates, and financial and housing
markets. With economic uncertainty still affecting potential consumers, we may be impacted by more conservative purchasing
tendencies with fewer non-essential products and services purchases during the coming periods if the current economic
environment continues. In addition, because our business relies in part on consumers initially visiting retailers to purchase
products and services that are not necessarily our products and services, if consumers are visiting retailers less frequently and
being more careful with their money when they do, these tendencies may also negatively impact our business.
Further, our ability to obtain additional funding in the future, if and as needed, through equity issuances or loans, or
otherwise meet our current obligations to third parties, could be adversely affected if the economic environment continues to be
difficult. In addition, the ability of third parties to honor their obligations to us could be negatively impacted, as retailers,
suppliers and other parties deal with the difficult economic environment. Finally, there may be consequences that will
ultimately result from the current economic conditions that are not yet known, and any one or more of these unknown
consequences (as well as those currently being experienced) could potentially have a material adverse effect on our financial
condition, operating results and liquidity, as well as our business generally.
Our business can be adversely affected by severe weather, natural disasters and other events beyond our control, such as
earthquakes, fires, power failures, telecommunication loss and terrorist attacks.
A catastrophic event that results in the destruction or disruption of any of our critical business or information
technology systems could harm our ability to conduct normal business operations and our operating results. For example, our
corporate headquarters and certain critical business operations are located in the Bellevue, Washington area, which is near
major earthquake faults. While we have taken steps to protect the security of critical business processes and systems and have
established certain back-up systems and disaster recovery procedures, any disruptions, whether due to inadequate back-up or
disaster recovery planning, failures of information technology systems, interruptions in the communications network, or other
factors, could seriously harm our business, financial condition and results of operations.
In addition, our operational and financial performance is a direct reflection of consumer use of and the ability to
operate and service our kiosks used in our business. Severe weather, natural disasters and other events beyond our control can,
for extended periods of time, significantly reduce consumer use of our products and services as well as interrupt the ability of
our employees and third-party providers to operate and service our kiosks. For example, in October 2012, Hurricane Sandy
caused disruptions to our normal operations in the impacted region for an extended period of time. In some cases, severe
weather, natural disasters and other events beyond our control may result in extensive damage to, or destruction of, our
infrastructure and equipment, including loss of kiosks used to provide our products and services, which losses may not be fully
covered by insurance.
Our business involves the movement of large sums of money, and, as a result, our business is particularly dependent on
our ability to process and settle transactions accurately and efficiently.
Our business involves the movement of large sums of money. Our Coinstar business requires the effective transfer of
large sums of money between many different locations. Because we are responsible for large sums of money that often are
substantially greater than the revenues generated, the success of our business particularly depends upon the efficient, secure,
and error-free handling of the money. We rely on the ability of our employees and our operating systems and network to process
these transactions in an efficient, uninterrupted and error-free manner. In the event of a breakdown, catastrophic event, security
breach, improper operation or any other event impacting our systems or network or our vendors’ systems or processes, or
improper or other actions taken by employees, or third party vendors, we could suffer financial loss, loss of consumers,
regulatory sanctions and damage to our reputation.