First Data 2007 Annual Report Download - page 26

• unauthorized entry;
• power loss;
• telecommunications failure;
• computer viruses;
• terrorist acts; and
• war.
Although the Company has taken steps to protect against data loss and system failures, there is still risk that it may lose critical data or experience system
failures. The Company performs the vast majority of disaster recovery operations itself, though it utilizes select third parties for some aspects of recovery,
particularly internationally. To the extent the Company outsources its disaster recovery, it is at risk of the vendor's unresponsiveness in the event of
breakdowns in the Company's systems. Furthermore, the Company's property and business interruption insurance may not be adequate to compensate it for all
losses or failures that may occur.
The Company may experience software defects, computer viruses and development delays, which could damage customer relations, decrease the
Company's potential profitability and expose it to liability.
The Company's products are based on sophisticated software and computing systems that often encounter development delays, and the underlying software
may contain undetected errors, viruses or defects. Defects in the Company's software products and errors or delays in the Company's processing of electronic
transactions could result in:
• additional development costs;
• diversion of technical and other resources from the Company's other development efforts;
• loss of credibility with current or potential customers;
• harm to the Company's reputation; or
• exposure to liability claims.
In addition, the Company relies on technologies supplied to it by third parties that may also contain undetected errors, viruses or defects that could have a
material adverse effect on the Company's business, financial condition and results of operations. Although the Company attempts to limit its potential liability
for warranty claims through disclaimers in the Company's software documentation and limitation-of-liability provisions in the Company's license and
customer agreements, the Company cannot assure that these measures will be successful in limiting the Company's liability.
A deterioration in economic conditions could adversely affect our results of operations.
As noted above, many of the Company's businesses rely in part on the number and size of consumer transactions which may be affected by, among other
things, overall economic conditions. If general market softness in the United States economy or other national economies important to the Company's
businesses should continue for an extended period of time or deteriorate further, the Company's results of operations could be adversely impacted.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable
ITEM 2. PROPERTIES
As of December 31, 2007, the Company and its subsidiaries owned or leased approximately 116 domestic properties and approximately 65 international
properties. These facilities are used for operational, sales and administrative purposes, and are all currently being utilized.
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