WeightWatchers 2015 Annual Report Download - page 18

any deterioration in our performance would likely result in a reduction of our credit rating, which could harm our
ability to incur additional indebtedness or the ability to refinance our debt obligations on favorable terms or at all.
Any failure of our technology or systems to perform satisfactorily could result in an adverse impact on our
business.
We rely on software, hardware, network systems and similar technology, including cloud-based technology,
that is either developed by us or licensed from or maintained by third parties to operate our websites, Online
subscription product offerings and other services and products such as the recurring billing system associated
with certain of our commitment plans, and to support our business operations. As much of this technology is
complex, there may be future errors, defects or performance problems, including when we update our technology
or integrate new technology to expand and enhance our capabilities. Our technology may malfunction or suffer
from defects that become apparent only after extended use. In addition, our operations depend on our ability to
protect our information technology systems against damage from fire, power loss, water, earthquakes,
telecommunications failures, third-party cyber-attacks and similar unexpected adverse events. Interruptions in
our websites, services and products or network systems could result from unknown technical defects, insufficient
capacity or the failure of our third party providers to provide continuous and uninterrupted service. While we
maintain disaster recovery capabilities to return to normal operation in a timely manner, we do not have a fully
redundant system that includes an instantaneous recovery capability.
As a result of such possible defects, failures, interruptions or other problems, our services and products
could be rendered unreliable or be perceived as unreliable by customers, which could result in harm to our
reputation and brand. Any failure of our technology or systems could result in an adverse impact on our business.
Our reputation and the appeal of our services and product offerings may be harmed by security breaches
or privacy concerns.
Breaches of security, vandalism and other malicious acts, which are increasingly negatively impacting
companies, could result in unauthorized access to proprietary or customer information or data, including credit
card transaction data, or cause interruptions to our services and products. Such unauthorized access could harm
our reputation, expose us to liability claims and may result in the loss of existing or potential customers. We rely
upon sophisticated information technology systems to operate our business. In the ordinary course of business,
we collect, store and utilize confidential information (including, but not limited to, personal customer
information and data), and it is critical that we do so in a secure manner to maintain the confidentiality and
integrity of such confidential information as well as comply with applicable regulatory requirements and
contractual obligations.
We also have outsourced significant elements of our information technology infrastructure and, as a result,
we are managing many independent vendor relationships with third parties who may or could have access to our
confidential information. The size and complexity of our information technology and information security
systems, and those of our third-party vendors with whom we contract, make such systems potentially vulnerable
to security breaches. While we have invested and developed systems and processes designed to protect such
proprietary or customer information or data, there can be no assurance that our efforts will prevent service
interruptions or security breaches.
Most states require that customers be notified if a security breach results in the disclosure of their personal
financial account or other information, and additional states and governmental entities are considering such laws.
In addition, other public disclosure laws may require that material security breaches be reported. If we experience
a security breach and such notice or public disclosure is required in the future, our reputation and our business
may be harmed. Prospective and existing customers, as well as companies and health plan providers who we
currently or may in the future partner with, may have concerns regarding our use of private information or data
collected on our websites or through our services and products, such as weight management information,
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