Cash America 2013 Annual Report Download - page 63

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of its customers, or otherwise damage its reputation and business. Any compromise of security could result in a violation
of applicable privacy and other laws, significant legal and financial exposure, damage to the Company’s reputation, and
a loss of confidence in the Company’s security measures, which could harm its business. In addition, most of the
Company’s customers provide personal information, including bank account information when applying for consumer
loans. The Company relies on encryption and authentication technology licensed from third parties to provide the
security and authentication to effectively secure transmission of confidential information, including customer bank
account and other personal information. Advances in computer capabilities, new discoveries in the field of cryptography
or other developments may result in the technology used by the Company to protect transaction data being breached or
compromised. Data breaches can also occur as a result of non-technical issues.
The Company’s servers are also vulnerable to computer viruses, physical or electronic break-ins, and similar
disruptions, including “denial-of-service” type attacks. The Company may need to expend significant resources to
protect against security breaches or to address problems caused by breaches. Security breaches, including any breach of
the Company or by persons with whom it has commercial relationships that result in the unauthorized release of its
customers’ personal information, could damage the Company’s reputation and expose it to a risk of loss or litigation and
possible liability. In addition, many of the third parties who provide products, services or support to the Company could
also experience any of the above cyber risks or security breaches, which could impact the Company’s customers and the
Company’s business and could result in a loss of customers, suppliers or revenue.
Any of these events could result in a loss of revenue and could have a material adverse effect on the Company’s
business, prospects, results of operations, financial condition and cash flows.
The Company’s operations could be subject to natural disasters and other business disruptions, which could
adversely impact its future revenue and financial condition and increase its costs and expenses.
The Company’s services, operations and pawnshops from which it provides products and services are vulnerable
to damage or interruption from tornadoes, hurricanes, earthquakes, fires, floods, power losses, telecommunications
failures, terrorist attacks, acts of war, human errors and similar events. A significant natural disaster, such as a tornado,
hurricane, earthquake, fire or flood, could have a material adverse impact on the Company’s ability to conduct business,
including causing damage to merchandise or collateral that it holds in any of its retail services locations, and the
Company’s insurance coverage may be insufficient to compensate for losses that may occur. Acts of terrorism, civil
unrest or violence could cause disruptions to the Company’s business or the economy as a whole. Any of these events
could cause consumer confidence to decrease, which could result in a decreased number of loans being made to
customers or reduced demand for pre-owned merchandise such as the merchandise sold in the Company’s pawnshops.
Any of these occurrences could have a material adverse effect on the Company’s business, prospects, results of
operations, financial condition and cash flows.
The Company may incur property, casualty or other losses not covered by insurance.
The Company maintains a program of insurance coverage for various types of property, casualty and other risks.
The types and amounts of insurance that it obtains vary from time to time, depending on availability, cost and
management’s decisions with respect to risk retention. The policies are subject to deductibles and exclusions that result
in the Company’s retention of a level of risk on a self-insurance basis. Losses not covered by insurance could be
substantial and may increase the Company’s expenses, which could harm the Company’s results of operations and
financial condition.
The Company’s reported results require the judgment of management, and the Company could be subject to risks
associated with these judgments or could be adversely affected by the implementation of new, or changes in the
interpretation of existing, accounting principles or financial reporting requirements.
The preparation of the Company’s financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the dates of
the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. In
addition, the Company prepares its financial statements in accordance with generally accepted accounting principles in
the United States (“GAAP”), and GAAP and its interpretations are subject to change over time. If new rules or
interpretations of existing rules require the Company to change its financial reporting, the Company’s results of