CompUSA 2010 Annual Report Download - page 64

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Failure to adequately control fraudulent credit card transactions could increase our expenses. Increased sales to individual
consumers, which are more likely to be paid for using a credit card, increases our exposure to fraud. We employ
technology solutions to help us detect the fraudulent use of credit card information. However, if we are unable to detect or
control credit card fraud, we may suffer losses as a result of orders placed with fraudulent credit card data, which could
adversely affect our business.
Our profitability can be adversely affected by increases in our income tax exposure due to, among other things, changes in
the mix of U.S. and non-U.S. revenues and earnings, changes in tax rates or laws, changes in our effective tax rate due to
changes in the mix of earnings among different countries and changes in valuation of our deferred tax assets and
liabilities.
Our business is dependent on certain key personnel.
Our business depends largely on the efforts and abilities of certain key senior management. The loss of the services of one
or more of such key personnel could have a material adverse affect on our business and financial results. We do not
maintain key man insurance policies on any of our executive officers.
We are subject to litigation risk due to the nature of our business, which may have a material adverse effect on our results
of operations and business.
From time to time, we are involved in lawsuits or other legal proceedings arising in the ordinary course of our business.
These may relate to, for example, patent, trademark or other intellectual property matters, employment law matters
product liability, commercial disputes, consumer sales practices, or other matters. In addition, as a public company we
could from time to time face claims relating to corporate or securities law matters. The defense and/or outcome of such
lawsuits or proceedings could have a material adverse affect on our business.
Changes in our income tax expense due to changes in the mix of U.S. and non-U.S. revenues and profitability, changes in
tax rates or exposure to additional income tax liabilities could affect our profitability. We are subject to income taxes in the
United States and various foreign jurisdictions. Our effective tax rate could be adversely affected by changes in the mix of
earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities,
changes in tax laws or by material audit assessments. The carrying value of our deferred tax assets, which are primarily in
the United States and the United Kingdom, is dependent on our ability to generate future taxable income in those
jurisdictions. In addition, the amount of income taxes we pay is subject to ongoing audits in various jurisdictions and a
material assessment by a tax authority could affect our profitability.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
We operate our business from numerous facilities in North America and Europe. These facilities include our headquarters location,
administrative offices, telephone call centers, distribution centers, computer assembly and retail stores. Certain facilities handle
multiple functions. Most of our facilities are leased; certain are owned by the Company.