Toro 2014 Annual Report Download - page 26

that we may desire to make to our products, processes, or sources the purchase, such as through customer rebate or other incentive
of supply as a result of such diligence and verification activities. programs, of certain types of mowing, snow and ice management
Since our supply chain is complex, ultimately we may not be able or irrigation equipment or other products that we sell, could impact
to sufficiently verify the origin of the conflict minerals used in our us positively or negatively, depending on whether we manufacture
products through the due diligence procedures that we implement, products that meet the specified legislative criteria, including in
which may adversely affect our reputation with our customers, areas such as fuel efficiency, alternative energy or water usage, or
shareholders, and other stakeholders. In such event, we may also if, as a result of such legislation, customers perceive our product
face difficulties in satisfying customers who require that all of our offerings to be relatively more or less attractive than our competi-
products are certified as conflict mineral free. If we are not able to tors’ product offerings. We cannot currently predict whether any
meet such requirements, customers may choose not to purchase such legislation will be enacted, what any such legislation’s spe-
our products, which could adversely affect our sales and the value cific terms and conditions would encompass, how any such legisla-
of portions of our inventory. Further, there may be only a limited tion would impact the competitive landscape within our markets, or
number of suppliers offering conflict free minerals and, as a result, how, if at all, any such legislation might ultimately affect customer
we cannot be sure that we will be able to obtain metals, if neces- demand for our products or our operating results.
sary, from such suppliers in sufficient quantities or at competitive
We operate in many different jurisdictions and we could
prices. Any one or a combination of these various factors could
be adversely affected by violations of the U.S. Foreign
harm our business, reduce market demand for our products, and
Corrupt Practices Act and similar worldwide anti-
adversely affect our profit margins, net sales, and overall financial
corruption laws.
results.
The U.S. Foreign Corrupt Practices Act and similar worldwide anti-
The costs of complying with the various environmental corruption laws generally prohibit companies and their
laws related to our ownership and/or lease of real intermediaries from making certain improper payments for the pur-
property, such as clean-up costs and liability that may pose of obtaining or retaining business. The continued expansion
be associated with certain hazardous waste disposal of our international operations could increase the risk of violations
activities, could adversely affect our financial condition of these laws in the future. Significant violations of these laws, or
and operating results. allegations of such violations, could harm our reputation, could dis-
Because we own and lease real property, various environmental rupt our business, and could result in significant fines and penal-
laws may impose liability on us for the costs of cleaning up and ties that could have a material adverse effect on our results of
responding to hazardous substances that may have been released operations or financial condition.
on our property, including releases unknown to us. These environ-
Management information systems are critical to our
mental laws and regulations could also require us to pay for envi-
business. If our management information systems or
ronmental remediation and response costs at third-party locations
those of our business partners or third party service
where we disposed of or recycled hazardous substances. We are
providers fail to adequately perform, or if we, our
currently involved in the evaluation and clean-up of a limited num-
business partners, or third party service providers
ber of properties we either currently or previously owned. Although
experience an interruption in their operation, our
we do not expect that these current matters will have a material
business, reputation, financial condition, and operating
adverse effect on our financial position or operating results, our
results could be adversely affected.
future costs of complying with the various environmental require-
ments, as they now exist or may be altered in the future, could We have many management information systems that are critical
adversely affect our financial condition and operating results. to our business, some of which are managed by third parties.
These management information systems are used to record, pro-
Legislative enactments could impact the competitive cess, summarize, transmit, and store electronic information, and to
landscape within our markets and affect demand for our manage or support a variety of business processes and activities,
products. including, among other things, our accounting and financial func-
Various legislative proposals, if enacted, could put us in a competi- tions, including maintaining our internal controls; our manufacturing
tively advantaged or disadvantaged position and affect customer and supply chain processes; and the data related to our research
demand for our products relative to the product offerings of our and development efforts. The failure of our management informa-
competitors. For example, any fiscal-stimulus or other legislative tion systems or those of our business partners or third party ser-
enactment that inordinately impacts the lawn and garden, outdoor vice providers to perform properly, or difficulties encountered in the
power equipment, or irrigation industries generally by promoting development of new systems or the upgrade of existing systems,
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