Voya 2014 Annual Report Download - page 104

incidents in the ordinary course of our business. Although we seek to limit our vulnerability to such events
through technological and other means, it is not possible to anticipate or prevent all potential forms of
cyberattack or to guarantee our ability to fully defend against all such attacks. In addition, due to the sensitive
nature of much of the financial and similar personal information we maintain, we may be at particular risk for
targeting.
We retain confidential information in our information technology systems, and we rely on industry standard
commercial technologies to maintain the security of those systems. Anyone who is able to circumvent our
security measures and penetrate our information technology systems could access, view, misappropriate, alter, or
delete information in the systems, including personally identifiable customer information and proprietary
business information. Information security risks also exist with respect to the use of portable electronic devices,
such as laptops, which are particularly vulnerable to loss and theft. In addition, an increasing number of
jurisdictions require that customers be notified if a security breach results in the disclosure of personally
identifiable customer information. Any attack or other breach of the security of our information technology
systems that compromises information that is subject to legislative or regulatory privacy protections, or that
otherwise results in inappropriate disclosure or use of personally identifiable customer information could damage
our reputation in the marketplace, deter purchases of our products, subject us to heightened regulatory scrutiny,
sanctions, significant civil and criminal liability or other adverse legal consequences and require us to incur
significant technical, legal and other expenses.
Third parties to whom we outsource certain of our functions are also subject to the risks outlined above, any
one of which could result in our incurring substantial costs and other negative consequences, including a material
adverse effect on our business, results of operations and financial condition.
Changes in accounting standards could adversely impact our reported results of operations and our reported
financial condition.
Our financial statements are subject to the application of U.S. GAAP, which is periodically revised or
expanded. Accordingly, from time to time we are required to adopt new or revised accounting standards issued
by recognized authoritative bodies, including the Financial Accounting Standards Board (“FASB”). It is possible
that future accounting standards we are required to adopt could change the current accounting treatment that we
apply to our consolidated financial statements and that such changes could have a material adverse effect on our
results of operations and financial condition.
In addition, FASB is working on several projects which could result in significant changes in U.S. GAAP,
including how we account for our insurance policies, annuity contracts and financial instruments and how our
financial statements are presented. The changes to U.S. GAAP could affect the way we account for and report
significant areas of our business, could impose special demands on us in the areas of governance, employee
training, internal controls and disclosure and will likely affect how we manage our business.
We may be required to establish an additional valuation allowance against the deferred income tax asset if our
business does not generate sufficient taxable income or if our tax planning strategies are modified. Increases
in the deferred tax valuation allowance could have a material adverse effect on our results of operations and
financial condition.
Deferred income tax represents the tax effect of the differences between the book and tax basis of assets and
liabilities. Deferred tax assets represent the tax benefit of future deductible temporary differences, operating loss
carryforwards and tax credits carryforward. We periodically evaluate and test our ability to realize our deferred
tax assets. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence, it is more
likely than not that some portion, or all, of the deferred tax assets will not be realized. In assessing the more
likely than not criteria, we consider future taxable income as well as prudent tax planning strategies. Future facts,
circumstances, tax law changes and FASB developments may result in an increase in the valuation allowance. An
increase in the valuation allowance could have a material adverse effect on the Company’s results of operations
and financial condition.
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