Under Armour 2015 Annual Report Download - page 26

Our international operations are also subject to compliance with the U.S. Foreign Corrupt Practices Act, or
FCPA, and other anti-bribery laws applicable to our operations. Although we have policies and procedures to
address compliance with the FCPA and similar laws, there can be no assurance that all of our employees, agents
and other partners will not take actions in violations of our policies. Any such violation could subject us to
sanctions or other penalties that could negatively affect our reputation, business and operating results.
If we encounter problems with our distribution system, our ability to deliver our products to the market
could be adversely affected.
We rely on a limited number of distribution facilities for our product distribution. Our distribution facilities
utilize computer controlled and automated equipment, which means the operations are complicated and may be
subject to a number of risks related to security or computer viruses, the proper operation of software and
hardware, power interruptions or other system failures. In addition, because many of our products are distributed
from a limited number of locations , our operations could also be interrupted by floods, fires or other natural
disasters in these locations, as well as labor or other operational difficulties or interruptions. We maintain
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 an
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 encounter
problems with our distribution facilities, our ability to meet customer expectations, manage inventory, complete
sales and achieve objectives for operating efficiencies could be materially adversely affected.
We rely significantly on information technology and any failure, inadequacy or interruption of that
technology could harm our ability to effectively operate our business.
Our business increasingly relies on information technology. Our ability to effectively manage and maintain
our inventory and internal reports, and to ship products to customers and invoice them on a timely basis depends
significantly on our enterprise resource planning, warehouse management, and other information systems. We
also heavily rely on information systems to process financial and accounting information for financial reporting
purposes. Any of these information systems could fail or experience a service interruption for a number of
reasons, including computer viruses, programming errors, hacking or other unlawful activities, disasters or our
failure to properly maintain system redundancy or protect, repair, maintain or upgrade our systems. The failure of
our information systems to operate effectively or to integrate with other systems, or a breach in security of these
systems could cause delays in product fulfillment and reduced efficiency of our operations, which could
negatively impact our financial results. If we experienced any significant disruption to our financial information
systems that we are unable to mitigate, our ability to timely report our financial results could be impacted, which
could negatively impact our stock price. We also communicate electronically throughout the world with our
employees and with third parties, such as customers, suppliers, vendors and consumers. A service interruption or
shutdown could negatively impact our operating activities. Remediation and repair of any failure, problem or
breach of our key information systems could require significant capital investments.
In addition, we interact with many of our consumers through both our e-commerce website and our mobile
applications. Consumers increasingly utilize these services to purchase our products and to engage with our
Connected Fitness community. If we are unable to continue to provide consumers a user-friendly experience and
evolve our platform to satisfy consumer preferences, the growth of our e-commerce business may be negatively
impacted. The performance of our Connected Fitness business is dependent on reliable performance of its
products, applications and services and the underlying technical infrastructure, which incorporate complex
software. If this software contains errors, bugs or other vulnerabilities which impede or halt service, this could
result in damage to our reputation and brand, loss of users or loss of revenue.
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