| SYMANTEC CORP Item 1A Risk Factors If we are unable to develop new and enhanced products and services that achieve widespread market acceptance, or if we are unable to continually improve the performance, features, and reliability of our existing products and services, our business and operating results could be adversely affected |
| Our future success depends on our ability to respond to the rapidly changing needs of our customers by developing or introducing new products, product upgrades, and services on a timely basis |
| We have in the past incurred, and will continue to incur, significant research and development expenses as we strive to remain competitive |
| New product development and introduction involves a significant commitment of time and resources and is subject to a number of risks and challenges including: • Managing the length of the development cycle for new products and product enhancements, which has frequently been longer than we originally expected • Adapting to emerging and evolving industry standards and to technological developments by our competitors and customers • Extending the operation of our products and services to new platforms and operating systems • Entering into new or unproven markets with which we have limited experience • Managing new product and service strategies, including integrating our various security and storage technologies, management solutions, customer service, and support into unified enterprise security and storage solutions • Incorporating acquired products and technologies • Developing or expanding efficient sales channels • Obtaining sufficient licenses to technology and technical access from operating system software vendors on reasonable terms to enable the development and deployment of interoperable products, including source code licenses for certain products with deep technical integration into operating systems If we are not successful in managing these risks and challenges, or if our new products, product upgrades, and services are not technologically competitive or do not achieve market acceptance, we could have expended substantial resources and capital without realizing sufficient revenues in return, and our business and operating results could be adversely affected |
| 16 _________________________________________________________________ [77]Table of Contents Fluctuations in demand for our products and services are driven by many factors and a decrease in demand for our products could adversely affect our financial results |
| We are subject to fluctuations in demand for our products and services due to a variety of factors, including competition, product obsolescence, technological change, budget constraints of our actual and potential customers, level of broadband usage, awareness of security threats to IT systems, and other factors |
| While such factors may, in some periods, increase product sales, fluctuations in demand can also negatively impact our product sales |
| For example, until recently we had experienced a higher than expected rate of growth in sales of our consumer security products that we believe was spurred, in part, by several well-publicized threats to computer security |
| As consumer attention to security threats fluctuates, the growth rates in sales of consumer security products have been impacted |
| If demand for our products declines, our revenues and gross margin could be adversely affected |
| We operate in a highly competitive environment, and our competitors may gain market share in the markets for our products that could adversely affect our business and cause our revenues to decline |
| We operate in intensely competitive markets that experience rapid technological developments, changes in industry standards, changes in customer requirements, and frequent new product introductions and improvements |
| If we are unable to anticipate or react to these competitive challenges or if existing or new competitors gain market share in any of our markets, our competitive position could weaken and we could experience a drop in revenues that could adversely affect our business and operating results |
| To compete successfully, we must maintain a successful research and development effort to develop new products and services and enhance existing products and services, effectively adapt to changes in the technology or product rights held by our competitors, appropriately respond to competitive strategy, and effectively adapt to technological changes and changes in the ways that our information is accessed, used, and stored within our enterprise and consumer markets |
| If we are unsuccessful in responding to our competitors or to changing technological and customer demands, we could experience a negative effect on our competitive position and our financial results |
| Our traditional competitors include independent software vendors which offer software products that directly compete with our product offerings |
| In addition to competing with these vendors directly for sales to end users of our products, we compete with them for the opportunity to have our products bundled with the product offerings of our strategic partners such as computer hardware OEMs and ISPs |
| Our competitors could gain market share from us if any of these strategic partners replace our products with the products of our competitors or if they more actively promote our competitors’ products than our products |
| In addition, software vendors who have bundled our products with theirs may choose to bundle their software with their own or other vendors’ software or may limit our access to standard product interfaces and inhibit our ability to develop products for their platform |
| We face growing competition from network equipment and computer hardware manufacturers and large operating system providers |
| These firms are increasingly developing and incorporating into their products data protection and storage and server management software that competes at some levels with our product offerings |
| Our competitive position could be adversely affected to the extent that our customers perceive the functionality incorporated into these products as replacing the need for our products |
| Microsoft has added remote access features to its operating systems and has made announcements of actual and anticipated product features and new product offerings that compete with a number of our product offerings |
| In addition, we believe that Microsoft has recently made changes to its operating systems that make it more difficult for independent security vendors to provide effective solutions for their customers |
| We could be adversely affected if customers, particularly consumers, perceive that features incorporated into the Microsoft operating system reduce the need for our products or if they prefer to purchase other Microsoft products that are bundled with its operating systems and compete with our products |
| Many of our competitors have greater financial, technical, sales, marketing, or other resources than we do and consequently may have an ability to influence customers to purchase their products instead of ours |
| We 17 _________________________________________________________________ [78]Table of Contents also face competition from many smaller companies that specialize in particular segments of the markets in which we compete |
| If we fail to manage our sales and distribution channels effectively or if our partners choose not to market and sell our products to their customers, our operating results could be adversely affected |
| We sell our consumer products to individuals and small offices/home offices around the world through multi-tiered sales and distribution networks |
| Sales through these different channels involve distinct risks, including the following: Direct Sales |
| A significant portion of our revenues from enterprise products is derived from sales by our direct sales force to end-users |
| Special risks associated with this sales channel include: • Longer sales cycles associated with direct sales efforts • Difficulty in hiring, retaining, and motivating our direct sales forces • Substantial amounts of training for sales representatives to become productive, including regular updates to cover new and revised products Indirect Sales Channels |
| A significant portion of our revenues is derived from sales through indirect channels, including distributors that sell our products to end-users and other resellers |
| This channel involves a number of risks, including: • Our lack of control over the timing of delivery of our products to end-users • Our resellers and distributors are not subject to minimum sales requirements or any obligation to market our products to their customers • Our reseller and distributor agreements are generally nonexclusive and may be terminated at any time without cause • Our resellers and distributors frequently market and distribute competing products and may, from time to time, place greater emphasis on the sale of these products due to pricing, promotions, and other terms offered by our competitors OEM Sales Channels |
| A significant portion of our revenues is derived from sales through our OEM partners that incorporate our products into, or bundle our products with, their products |
| Our reliance on this sales channel involves many risks, including: • Our lack of control over the shipping dates or volume of systems shipped • Our OEM partners are generally not subject to minimum sales requirements or any obligation to market our products to their customers • Our OEM partners may terminate or renegotiate their arrangements with us and new terms may be less favorable due, among other things, to an increasingly competitive relationship with certain partners • Sales through our OEM partners are subject to changes in strategic direction, competitive risks, and other issues that could result in reduction of OEM sales • The development work that we must generally undertake under our agreements with our OEM partners may require us to invest significant resources and incur significant costs with little or no associated revenues • The time and expense required for the sales and marketing organizations of our OEM partners to become familiar with our products may make it more difficult to introduce those products to the market • Our OEM partners may develop, market, and distribute their own products and market and distribute products of our competitors, which could reduce our sales 18 _________________________________________________________________ [79]Table of Contents If we fail to manage our sales and distribution channels successfully, these channels may conflict with one another or otherwise fail to perform as we anticipate, which could reduce our sales and increase our expenses as well as weaken our competitive position |
| Some of our distribution partners have experienced financial difficulties in the past, and if our partners suffer financial difficulties in the future, we may have reduced sales or increased bad debt expense that could adversely affect our operating results |
| In addition, reliance on multiple channels subjects us to events that could cause unpredictability in demand, which could increase the risk that we may be unable to plan effectively for the future, and could result in adverse operating results in future periods |
| We have grown, and may continue to grow, through acquisitions that give rise to risks and challenges that could adversely affect our future financial results |
| We have in the past acquired, and we expect to acquire in the future, other businesses, business units, and technologies |
| Acquisitions involve a number of special risks and challenges, including: • Complexity, time, and costs associated with the integration of acquired business operations, workforce, products, and technologies into our existing business, sales force, employee base, product lines, and technology • Diversion of management time and attention from our existing business and other business opportunities • Loss or termination of employees, including costs associated with the termination or replacement of those employees • Assumption of debt or other liabilities of the acquired business, including litigation related to alleged liabilities of the acquired business • The incurrence of additional acquisition-related debt as well as increased expenses and working capital requirements • Dilution of stock ownership of existing stockholders, or earnings per share • Increased costs and efforts in connection with compliance with Section 404 of the Sarbanes-Oxley Act • Substantial accounting charges for restructuring and related expenses, write-off of in-process research and development, impairment of goodwill, amortization of intangible assets, and stock-based compensation expense Integrating acquired businesses has been and will continue to be a complex, time consuming, and expensive process, and can impact the effectiveness of our internal control over financial reporting |
| For example, as disclosed in Item 9A in this annual report, our management has identified a material weakness in our internal control over financial reporting that was largely related to Symantec having insufficient personnel resources with adequate expertise to properly manage the increased volume and complexity of income tax matters arising from the acquisition of Veritas |
| If our ongoing integration of the Veritas business is not successful, we may not realize the potential benefits of the acquisition or could undergo other adverse effects that we currently do not foresee |
| To integrate acquired businesses, we must implement our technology systems in the acquired operations and integrate and manage the personnel of the acquired operations |
| We also must effectively integrate the different cultures of acquired business organizations into our own in a way that aligns various interests, and may need to enter new markets in which we have no or limited experience and where competitors in such markets have stronger market positions |
| Any of the foregoing, and other factors, could harm our ability to achieve anticipated levels of profitability from acquired businesses or to realize other anticipated benefits of acquisitions |
| In addition, because acquisitions of high technology companies are inherently risky, no assurance can be given that our previous or future acquisitions will be successful and will not adversely affect our business, operating results, or financial condition |
| 19 _________________________________________________________________ [80]Table of Contents Our international operations involve risks that could increase our expenses, adversely affect our operating results, and require increased time and attention of our management |
| We derive a substantial portion of our revenues from customers located outside of the US and we have significant operations outside of the US, including engineering, sales, customer support, and production |
| We plan to expand our international operations, but such expansion is contingent upon the financial performance of our existing international operations as well as our identification of growth opportunities |
| Our international operations are subject to risks in addition to those faced by our domestic operations, including: • Potential loss of proprietary information due to misappropriation or laws that may be less protective of our intellectual property rights • Requirements of foreign laws and other governmental controls, including trade and labor restrictions and related laws that reduce the flexibility of our business operations • Regulations or restrictions on the use, import, or export of encryption technologies that could delay or prevent the acceptance and use of encryption products and public networks for secure communications • Central bank and other restrictions on our ability to repatriate cash from our international subsidiaries or to exchange cash in international subsidiaries into cash available for use in the US • Fluctuations in currency exchange rates and economic instability such as higher interest rates in the US and inflation that could reduce our customers’ ability to obtain financing for software products or that could make our products more expensive in certain countries • Limitations on future growth or inability to maintain current levels of revenues from international sales if we do not invest sufficiently in our international operations • Longer payment cycles for sales in foreign countries and difficulties in collecting accounts receivable • Difficulties in staffing, managing, and operating our international operations, including difficulties related to administering our stock plans in some foreign countries • Difficulties in coordinating the activities of our geographically dispersed and culturally diverse operations • Seasonal reductions in business activity in the summer months in Europe and in other periods in other countries • Reduced sales due to the failure to obtain any required export approval of our technologies, particularly our encryption technologies • Costs and delays associated with developing software in multiple languages • Political unrest, war, or terrorism, particularly in areas in which we have facilities A significant portion of our transactions outside of the US are denominated in foreign currencies |
| Accordingly, our future operating results will continue to be subject to fluctuations in foreign currency rates |
| We may be negatively affected by fluctuations in foreign currency rates in the future, especially if international sales continue to grow as a percentage of our total sales |
| We receive significant tax benefits from sales to our non-US customers |
| These benefits are contingent upon existing tax regulations in the US and in the countries in which our international operations are located |
| Future changes in domestic or international tax regulations could adversely affect our ability to continue to realize these tax benefits |
| Our products are complex and operate in a wide variety of computer configurations, which could result in errors or product failures |
| Because we offer very complex products, undetected errors, failures, or bugs may occur, especially when products are first introduced or when new versions are released |
| Our products are often installed and used in 20 _________________________________________________________________ [81]Table of Contents large-scale computing environments with different operating systems, system management software, and equipment and networking configurations, which may cause errors or failures in our products or may expose undetected errors, failures, or bugs in our products |
| Our customers’ computing environments are often characterized by a wide variety of standard and non-standard configurations that make pre-release testing for programming or compatibility errors very difficult and time-consuming |
| In addition, despite testing by us and others, errors, failures, or bugs may not be found in new products or releases until after commencement of commercial shipments |
| In the past, we have discovered software errors, failures, and bugs in certain of our product offerings after their introduction and have experienced delayed or lost revenues during the period required to correct these errors |
| Errors, failures, or bugs in products released by us could result in negative publicity, product returns, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers or others |
| Many of our end-user customers use our products in applications that are critical to their businesses and may have a greater sensitivity to defects in our products than to defects in other, less critical, software products |
| In addition, if an actual or perceived breach of information integrity or availability occurs in one of our end-user customer’s systems, regardless of whether the breach is attributable to our products, the market perception of the effectiveness of our products could be harmed |
| Alleviating any of these problems could require significant expenditures of our capital and other resources and could cause interruptions, delays, or cessation of our product licensing, which could cause us to lose existing or potential customers and could adversely affect our operating results |
| If we are unable to attract and retain qualified employees, lose key personnel, fail to integrate replacement personnel successfully, or fail to manage our employee base effectively, we may be unable to develop new and enhanced products and services, effectively manage or expand our business, or increase our revenues |
| Our future success depends upon our ability to recruit and retain our key management, technical, sales, marketing, finance, and other critical personnel |
| Our officers and other key personnel are employees-at-will, and we cannot assure you that we will be able to retain them |
| Competition for people with the specific skills that we require is significant |
| In order to attract and retain personnel in a competitive marketplace, we believe that we must provide a competitive compensation package, including cash and equity-based compensation |
| The volatility in our stock price may from time to time adversely affect our ability to recruit or retain employees |
| In addition, we may be unable to obtain required stockholder approvals of future increases in the number of shares available for issuance under our equity compensation plans, and recent changes in accounting rules require us to treat the issuance of employee stock options and other forms of equity-based compensation as compensation expense |
| As a result, we may decide to issue fewer equity-based incentives and may be impaired in our efforts to attract and retain necessary personnel |
| If we are unable to hire and retain qualified employees, or conversely, if we fail to manage employee performance or reduce staffing levels when required by market conditions, our business and operating results could be adversely affected |
| Key personnel have left our company in the past and there likely will be additional departures of key personnel from time to time in the future |
| The loss of any key employee could result in significant disruptions to our operations, including adversely affecting the timeliness of product releases, the successful implementation and completion of company initiatives, the effectiveness of our disclosure controls and procedures and our internal control over financial reporting, and the results of our operations |
| In addition, hiring, training, and successfully integrating replacement sales and other personnel could be time consuming, may cause additional disruptions to our operations, and may be unsuccessful, which could negatively impact future revenues |
| We are a party to several class action and derivative action lawsuits, which could require significant management time and attention and result in significant legal expenses, and which could, if not determined favorably, negatively impact our business, financial condition, results of operations, and cash flows |
| We have been named as a party to several class action and derivative action lawsuits, and we may be named in additional litigation |
| The expense of defending such litigation may be costly and divert manage- 21 _________________________________________________________________ [82]Table of Contents ment’s attention from the day-to-day operations of our business, which could adversely affect our business, results of operations, and cash flows |
| In addition, an unfavorable outcome in such litigation could negatively impact our business, results of operations, and cash flows |
| Third parties claiming that we infringe their proprietary rights could cause us to incur significant legal expenses and prevent us from selling our products |
| From time to time, we receive claims that we have infringed the intellectual property rights of others, including claims regarding patents, copyrights, and trademarks |
| In addition, former employers of our former, current, or future employees may assert claims that such employees have improperly disclosed to us the confidential or proprietary information of these former employers |
| Any such claim, with or without merit, could result in costly litigation and distract management from day-to-day operations |
| If we are not successful in defending such claims, we could be required to stop selling, delay shipments of or redesign our products, pay monetary amounts as damages, enter into royalty or licensing arrangements, or satisfy indemnification obligations that we have with some of our customers |
| In addition, we license and use software from third parties in our business |
| These third party software licenses may not continue to be available to us on acceptable terms or at all, and may expose us to additional liability |
| This liability, or our inability to use any of this third party software, could result in shipment delays or other disruptions in our business that could materially and adversely affect our operating results |
| If we do not protect our proprietary information and prevent third parties from making unauthorized use of our products and technology, our financial results could be harmed |
| Our software and underlying technology are proprietary |
| We seek to protect our proprietary rights through a combination of confidentiality agreements and procedures and through copyright, patent, trademark, and trade secret laws |
| However, all of these measures afford only limited protection and may be challenged, invalidated, or circumvented by third parties |
| Third parties may copy all or portions of our products or otherwise obtain, use, distribute, and sell our proprietary information without authorization |
| Third parties may also develop similar or superior technology independently, by designing around our patents |
| Our shrink-wrap license agreements are not signed by licensees and therefore may be unenforceable under the laws of some jurisdictions |
| Furthermore, the laws of some foreign countries do not offer the same level of protection of our proprietary rights as the laws of the US, and we may be subject to unauthorized use of our products in those countries |
| The unauthorized copying or use of our products or proprietary information could result in reduced sales of our products |
| Any legal action to protect proprietary information that we may bring or be engaged in with a strategic partner or vendor could adversely affect our ability to access software, operating system, and hardware platforms of such partner or vendor, or cause such partner or vendor to choose not to offer our products to their customers |
| In addition, any legal action to protect proprietary information that we may bring or be engaged in, alone or through our alliances with the Business Software Alliance (BSA), or the Software & Information Industry Association (SIIA), could be costly, may distract management from day-to-day operations, and may lead to additional claims against us, which could adversely affect our operating results |
| Some of our products contain “open source” software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business |
| Certain of our products are distributed with software licensed by its authors or other third parties under so-called “open source” licenses, which may include, by way of example the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), the Mozilla Public License, the BSD License, and the Apache License |
| Some of these licenses contain requirements that we make available source code for modifications or derivative works we create based upon the open source software, and that we license such modifications or derivative works under the terms of a particular open source license or other license granting third parties certain rights of further use |
| If we combine our proprietary software with open source software in a certain manner, we could, under certain of the open source licenses, be required to release the source code of our proprietary software |
| In addition to risks related to license requirements, usage of open source software can 22 _________________________________________________________________ [83]Table of Contents lead to greater risks than use of third party commercial software, as open source licensors generally do not provide warranties or controls on origin of the software |
| We have established processes to help alleviate these risks, including a review process for screening requests from our development organizations for the use of open source, but we cannot be sure that all open source is submitted for approval prior to use in our products |
| In addition, many of the risks associated with usage of open source cannot be eliminated, and could, if not properly addressed, negatively affect our business |
| Our software products and website may be subject to intentional disruption that could adversely impact our reputation and future sales |
| Although we believe we have sufficient controls in place to prevent intentional disruptions, we expect to be an ongoing target of attacks specifically designed to impede the performance of our products |
| Similarly, experienced computer programmers may attempt to penetrate our network security or the security of our website and misappropriate proprietary information or cause interruptions of our services |
| Because the techniques used by such computer programmers to access or sabotage networks change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques |
| Our activities could be adversely affected and our reputation and future sales harmed if these intentionally disruptive efforts are successful |
| Increased customer demands on our technical support services may adversely affect our relationships with our customers and our financial results |
| We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services |
| We also may be unable to modify the format of our support services to compete with changes in support services provided by competitors or successfully integrate support for our customers |
| Further customer demand for these services, without corresponding revenues, could increase costs and adversely affect our operating results |
| We have outsourced a substantial portion of our worldwide consumer support functions to third party service providers |
| If these companies experience financial difficulties, do not maintain sufficiently skilled workers and resources to satisfy our contracts, or otherwise fail to perform at a sufficient level under these contracts, the level of support services to our customers may be significantly disrupted, which could materially harm our relationships with these customers |
| Accounting charges may cause fluctuations in our quarterly financial results |
| Our financial results have been in the past, and may continue to be in the future, materially affected by non-cash and other accounting charges, including: • Amortization of intangible assets, including acquired product rights • Impairment of goodwill • Stock-based compensation expense, including charges related to our adoption in the first quarter of fiscal 2007 of Statement of Financial Accounting Standards Nodtta 123R, Share-Based Payment, which will materially increase the stock-based compensation expense included in our results of operations • Restructuring charges and reversals of those charges • Impairment of long-lived assets For example, in connection with our acquisition of Veritas, we have recorded approximately dlra2dtta8 billion of intangible assets, including acquired product rights, and dlra8dtta6 billion of goodwill |
| We have recorded and will continue to record future amortization charges with respect to a portion of these intangible assets and stock-based compensation expense related to the stock options to purchase Veritas common stock assumed by us |
| In addition, we will evaluate our long-lived assets, including property and equipment, goodwill, acquired product rights, and other intangible assets, whenever events or circumstances occur which indicate that these assets might be impaired |
| Goodwill is evaluated annually for impairment in the fourth quarter of each fiscal year or 23 _________________________________________________________________ [84]Table of Contents more frequently if events and circumstances warrant |
| The foregoing types of accounting charges may also be incurred in connection with or as a result of other business acquisitions |
| The price of our common stock could decline to the extent that our financial results are materially affected by the foregoing accounting charges |
| Our effective tax rate may increase or fluctuate, which could increase our income tax expense and reduce our net income |
| Our effective tax rate could be adversely affected by several factors, many of which are outside of our control, including: • Changes in the relative proportions of revenues and income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates • Changing tax laws, regulations, and interpretations in multiple jurisdictions in which we operate as well as the requirements of certain tax rulings • Changes in accounting and tax treatment of stock-based compensation • The tax effects of purchase accounting for acquisitions and restructuring charges that may cause fluctuations between reporting periods • Tax assessments, or any related tax interest or penalties, could significantly affect our income tax expense for the period in which the settlements take place The price of our common stock could decline to the extent that our financial results are materially affected by an adverse change in our effective tax rate |
| We report our results of operations based on our determinations of the amount of taxes owed in the various tax jurisdictions in which we operate |
| From time to time, we receive notices that a tax authority to which we are subject has determined that we owe a greater amount of tax than we have reported to such authority, and we are regularly engaged in discussions, and sometimes disputes, with these tax authorities |
| If the ultimate determination of our taxes owed in any of these jurisdictions is for an amount in excess of the tax provision we have recorded or reserved for, our operating results, cash flows, and financial condition could be adversely affected |
| Fluctuations in our quarterly financial results have affected the price of our common stock in the past and could affect our stock price in the future |
| Our quarterly financial results have fluctuated in the past and are likely to vary significantly in the future due to a number of factors, many of which are outside of our control and which could adversely affect our operations and operating results |
| In addition, our acquisition of Veritas makes it more difficult for us to predict, and securities analysts to develop expectations regarding, our future financial results due to the risks associated with the complexity of our combined business and the integration of our management teams and operations |
| If our quarterly financial results or our predictions of future financial results fail to meet the expectations of securities analysts and investors, our stock price could be negatively affected |
| Any volatility in our quarterly financial results may make it more difficult for us to raise capital in the future or pursue acquisitions that involve issuances of our stock |
| Our operating results for prior periods may not be effective predictors of our future performance |
| Factors associated with our industry, the operation of our business, and the markets for our products may cause our quarterly financial results to fluctuate, including: • Reduced demand for any of our products • Entry of new competition into our markets • Competitive pricing pressure for one or more of our classes of products • Our ability to timely complete the release of new or enhanced versions of our products 24 _________________________________________________________________ [85]Table of Contents • The number, severity, and timing of threat outbreaks (eg worms and viruses) • Our resellers making a substantial portion of their purchases near the end of each quarter • Enterprise customers’ tendency to negotiate site licenses near the end of each quarter • Cancellation, deferral, or limitation of orders by customers • Fluctuations in foreign currency exchange rates • Movement in interest rates • The rate of adoption of new product technologies and new releases of operating systems • Weakness or uncertainty in general economic or industry conditions in any of the multiple markets in which we operate that could reduce customer demand and ability to pay for our products and services • Political and military instability, which could slow spending within our target markets, delay sales cycles, and otherwise adversely affect our ability to generate revenues and operate effectively • Budgetary constraints of customers, which are influenced by corporate earnings and government budget cycles and spending objectives • Disruptions in our highly automated business operations caused by, among other things, • Earthquakes, floods, or other natural disasters affecting our headquarters located in Silicon Valley, California, an area known for seismic activity, or our other locations worldwide • Acts of war or terrorism • Intentional disruptions by third parties Any of the foregoing factors could cause the trading price of our common stock to fluctuate significantly |
| Our stock price may be volatile in the future, and you could lose the value of your investment |
| The market price of our common stock has experienced significant fluctuations in the past and may continue to fluctuate in the future, and as a result you could lose the value of your investment |
| The market price of our common stock may be affected by a number of factors, including: • Announcements of quarterly operating results and revenue and earnings forecasts by us that fail to meet or be consistent with our earlier projections or the expectations of our investors or securities analysts • Announcements by either our competitors or customers that fail to meet or be consistent with their earlier projections or the expectations of our investors or securities analysts • Rumors, announcements, or press articles regarding our operations, management, organization, financial condition, or financial statements • Changes in revenue and earnings estimates by us, our investors, or securities analysts • Accounting charges, including charges relating to the impairment of goodwill • Announcements of planned acquisitions by us or by our competitors • Announcements of new or planned products by us, our competitors, or our customers • Gain or loss of a significant customer • Inquiries by the SEC, Nasdaq, law enforcement, or other regulatory bodies • Acts of terrorism, the threat of war, and other crises or emergency situations • Economic slowdowns or the perception of an oncoming economic slowdown in any of the major markets in which we operate 25 _________________________________________________________________ [86]Table of Contents The stock market in general, and the market prices of stocks of technology companies in particular, have experienced extreme price volatility that has adversely affected, and may continue to adversely affect, the market price of our common stock for reasons unrelated to our business or operating results |