Under Armour 2014 Annual Report Download - page 28

hardware, power interruptions or other system failures. In addition, because many of our products are distributed
f
rom a limited number of locations , our operations could also be interrupted by floods, fires or other natura
l
disasters in these locations, as well as labor or other o
p
erational difficulties or interru
p
tions. We maintai
n
business interruption insurance, but it may not adequately protect us from the adverse effects that could be
caused by significant disruptions in our distribution facilities, such as the long term loss of customers or a
n
erosion of our brand image. In addition, our distribution capacity is dependent on the timely performance of
services by third parties, including the shipping of product to and from our distribution facilities. If we encounte
r
p
roblems with our distribution facilities, our ability to meet customer expectations, manage inventory, complet
e
sales and achieve objectives for operating efficiencies could be materially adversely affected
.
We rely s
i
gn
ifi
cantly on
i
n
f
ormat
i
on technology and any
f
a
i
lure,
i
nadequacy or
i
nterrupt
i
on o
f
tha
t
t
echnology could harm our ab
i
l
i
ty to e
ff
ect
i
vely operate our bus
i
ness.
Our
b
us
i
ness
i
ncreas
i
ng
l
yre
li
es on
i
n
f
ormat
i
on tec
h
no
l
ogy. Our a
bili
ty to e
ff
ect
i
ve
l
y manage an
d
ma
i
nta
i
n
o
ur
i
nventory an
di
nterna
l
reports, an
d
to s
hi
p pro
d
ucts to customers an
di
nvo
i
ce t
h
em on a t
i
me
l
y
b
as
i
s
d
epen
d
s
s
i
gn
ifi
cant
l
y on our enterpr
i
se resource p
l
ann
i
ng, ware
h
ouse management, an
d
ot
h
er
i
n
f
ormat
i
on systems. We
a
l
so
h
eav
il
yre
l
yon
i
n
f
ormat
i
on systems to process
fi
nanc
i
a
l
an
d
account
i
ng
i
n
f
ormat
i
on
f
or
fi
nanc
i
a
l
report
i
ng
p
urposes. Any o
f
t
h
ese
i
n
f
ormat
i
on systems cou
ld f
a
il
or exper
i
ence a serv
i
ce
i
nterrupt
i
on
f
or a num
b
er o
f
r
easons,
i
nc
l
u
di
ng computer v
i
ruses, programm
i
ng errors,
h
ac
ki
ng or ot
h
er un
l
aw
f
u
l
act
i
v
i
t
i
es,
di
sasters or our
f
a
il
ure to proper
l
yma
i
nta
i
n system re
d
un
d
ancy or protect, repa
i
r, ma
i
nta
i
n or upgra
d
e our systems. T
h
e
f
a
il
ure o
f
o
ur
i
n
f
ormat
i
on s
y
stems to operate e
ff
ect
i
ve
ly
or to
i
nte
g
rate w
i
t
h
ot
h
er s
y
stems, or a
b
reac
hi
n secur
i
t
y
o
f
t
h
es
e
s
y
stems cou
ld
cause
d
e
l
a
y
s
i
n pro
d
uct
f
u
lfill
ment an
d
re
d
uce
d
e
ffi
c
i
enc
y
o
f
our operat
i
ons, w
hi
c
h
cou
ld
ne
g
at
i
ve
ly i
mpact our
fi
nanc
i
a
l
resu
l
ts. I
f
we exper
i
ence
d
an
y
s
ig
n
ifi
cant
di
srupt
i
on to our
fi
nanc
i
a
li
n
f
ormat
i
o
n
s
y
stems t
h
at we are una
bl
etom
i
t
ig
ate, our a
bili
t
y
to t
i
me
ly
report our
fi
nanc
i
a
l
resu
l
ts cou
ld b
e
i
mpacte
d
,w
hi
c
h
cou
ld
ne
g
at
i
ve
ly i
mpact our stoc
k
pr
i
ce. We a
l
so commun
i
cate e
l
ectron
i
ca
lly
t
h
rou
gh
out t
h
e wor
ld
w
i
t
h
our
emp
l
o
y
ees an
d
w
i
t
h
t
hi
r
d
part
i
es, suc
h
as customers, supp
li
ers, ven
d
ors an
d
consumers. A serv
i
ce
i
nterrupt
i
on o
r
s
h
ut
d
own cou
ld
ne
g
at
i
ve
ly i
mpact our operat
i
n
g
act
i
v
i
t
i
es. Reme
di
at
i
on an
d
repa
i
ro
f
an
yf
a
il
ure, pro
bl
em or
b
reac
h
o
f
our
k
e
yi
n
f
ormat
i
on s
y
stems cou
ld
requ
i
re s
ig
n
ifi
cant cap
i
ta
li
nvestments
.
I
n addition, the
p
erformance of our Connected Fitness business is de
p
endent on reliable
p
erformance of its
p
roducts, applications and services and the underlying technical infrastructure, which incorporate comple
x
software. If this software contains errors, bugs or other vulnerabilities which impede or halt service, this coul
d
r
esult in damage to our reputation and brand, loss of users or loss of revenue.
D
ata security or privacy breaches could dama
g
e our reputation, cause us to incur additional expense,
expose us to liti
g
ation and adversely affect our business
.
We co
ll
ect sens
i
t
i
ve an
d
propr
i
etar
yb
us
i
ness
i
n
f
ormat
i
on as we
ll
as persona
lly id
ent
ifi
a
bl
e
i
n
f
ormat
i
on
i
n
connect
i
on w
i
t
h digi
ta
l
mar
k
et
i
n
g
,
digi
ta
l
commerce, our
i
n-store pa
y
ment process
i
n
g
s
y
stems an
d
our
Connecte
d
F
i
tness
b
us
i
ness. In part
i
cu
l
ar,
i
n our Connecte
d
F
i
tness
b
us
i
ness we co
ll
ect an
d
store a var
i
et
y
o
f
i
n
f
ormat
i
on re
g
ar
di
n
g
our users, an
d
a
ll
ow users to s
h
are t
h
e
i
r persona
li
n
f
ormat
i
on w
i
t
h
eac
h
ot
h
er an
d
w
i
t
h
t
hi
r
d
part
i
es. Hac
k
ers an
dd
ata t
hi
eves are
i
ncreas
i
n
gly
sop
hi
st
i
cate
d
an
d
operate
l
ar
g
e sca
l
ean
d
comp
l
e
x
automate
d
attac
k
s. An
yb
reac
h
o
f
our
d
ata secur
i
t
y
cou
ld
resu
l
t
i
n an unaut
h
or
i
ze
d
re
l
ease or trans
f
er o
f
customer, consumer, user or emp
l
o
y
ee
i
n
f
ormat
i
on, or t
h
e
l
oss o
f
va
l
ua
bl
e
b
us
i
ness
d
ata or cause a
di
srupt
i
on
i
n
o
ur
b
us
i
ness. T
h
ese events cou
ld gi
ve r
i
se to unwante
d
me
di
a attent
i
on,
d
ama
g
e our reputat
i
on,
d
ama
g
eou
r
customer, consumer or user re
l
at
i
ons
hi
ps an
d
resu
l
t
i
n
l
ost sa
l
es,
fi
nes or
l
awsu
i
ts. We ma
y
a
l
so
b
e requ
i
re
d
t
o
expen
d
s
ig
n
ifi
cant cap
i
ta
l
an
d
ot
h
er resources to protect a
g
a
i
nst or respon
d
to or a
ll
ev
i
ate pro
bl
ems cause
dbya
secur
i
t
yb
reac
h.
We must also comply with increasingly complex regulatory standards throughout the world enacted t
o
p
rotect personal information and other data, particularly with respect to our Connected Fitness business.
Compliance with existing and proposed laws and regulations can be costly. In addition, an inability to maintai
n
compliance with these regulatory standards could subject us to litigation or other regulatory proceedings.
18