Crucial 2014 Annual Report Download - page 21

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19
Our results of operations could be affected by natural disasters and other events in the locations in which we or our
customers or suppliers operate.
We have manufacturing and other operations in locations subject to natural occurrences such as severe weather and
geological events including earthquakes or tsunamis that could disrupt operations. In addition, our suppliers and customers also
have operations in such locations. A natural disaster, fire, explosion or other event that results in a prolonged disruption to our
operations, or the operations of our customers or suppliers, may materially adversely affect our business, results of operations
or financial condition.
We face risks associated with our international sales and operations that could materially adversely affect our business,
results of operations or financial condition.
Sales to customers outside the United States approximated 84% of our consolidated net sales for 2014. In addition, a
substantial portion of our manufacturing operations are located outside the United States. In particular, a significant portion of
our manufacturing operations are concentrated in Taiwan, Singapore and Japan. Our international sales and operations are
subject to a variety of risks, including:
• export and import duties, changes to import and export regulations, customs regulations and processes and restrictions
on the transfer of funds;
• compliance with U.S. and international laws involving international operations, including the Foreign Corrupt
Practices Act, export control laws and similar rules and regulations;
• political and economic instability;
• problems with the transportation or delivery of our products;
• issues arising from cultural or language differences and labor unrest;
• longer payment cycles and greater difficulty in collecting accounts receivable;
• compliance with trade, technical standards and other laws in a variety of jurisdictions;
• contractual and regulatory limitations on our ability to maintain flexibility with our staffing levels;
• disruptions to our manufacturing operations as a result of actions imposed by foreign governments;
• changes in economic policies of foreign governments; and
• difficulties in staffing and managing international operations.
These factors may materially adversely affect our business, results of operations or financial condition.
Breaches of our network security could expose us to losses.
We manage and store on our network systems various proprietary information and sensitive or confidential data relating to
our operations. We also process, store, and transmit large amounts of data relating to our customers and employees, including
sensitive personal information. Computer programmers and hackers may be able to gain unauthorized access to our network
system and steal proprietary information, compromise confidential information, create system disruptions, or cause shutdowns.
These parties may also be able to develop and deploy viruses, worms, and other malicious software programs that disrupt our
operations and create security vulnerabilities. Attacks on our network systems could result in significant losses and damage our
reputation with customers.
We are subject to counterparty default risks.
We have numerous arrangements with financial institutions that subject us to counterparty default risks, including cash
deposits, investments, capped-call contracts on our stock and derivative instruments. As a result, we are subject to the risk that
the counterparty to one or more of these arrangements will default on its performance obligations. A counterparty may not
comply with their contractual commitments which could then lead to their defaulting on their obligations with little or no notice
to us, which could limit our ability to take action to mitigate our exposure. Additionally, our ability to mitigate our exposures
may be constrained by the terms of our contractual arrangements or because market conditions prevent us from taking effective
action. If one of our counterparties becomes insolvent or files for bankruptcy, our ability to recover any losses suffered as a
result of that counterparty's default may be limited by the liquidity of the counterparty or the applicable laws governing the
bankruptcy proceeding. In the event of such default, we could incur significant losses, which could adversely impact our
business, results of operations or financial condition.