Cisco 2012 Annual Report Download - page 25

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Item 1A. Risk Factors
Set forth below and elsewhere in this report and in other documents we file with the SEC are descriptions of the
risks and uncertainties that could cause our actual results to differ materially from the results contemplated by the
forward-looking statements contained in this report.
OUR OPERATING RESULTS MAY FLUCTUATE IN FUTURE PERIODS, WHICH MAY
ADVERSELY AFFECT OUR STOCK PRICE
Our operating results have been in the past, and will continue to be, subject to quarterly and annual fluctuations
as a result of numerous factors, some of which may contribute to more pronounced fluctuations in an uncertain
global economic environment. These factors include:
• Fluctuations in demand for our products and services, especially with respect to telecommunications
service providers and Internet businesses, in part due to changes in the global economic environment
• Changes in sales and implementation cycles for our products and reduced visibility into our customers’
spending plans and associated revenue
• Our ability to maintain appropriate inventory levels and purchase commitments
• Price and product competition in the communications and networking industries, which can change
rapidly due to technological innovation and different business models from various geographic regions
• The overall movement toward industry consolidation among both our competitors and our customers
• The introduction and market acceptance of new technologies and products and our success in new and
evolving markets, including in our newer product categories such as data center and collaboration and
in emerging technologies, as well as the adoption of new standards
• Variations in sales channels, product costs, or mix of products sold
• The timing, size, and mix of orders from customers
• Manufacturing and customer lead times
• Fluctuations in our gross margins, and the factors that contribute to such fluctuations, as described
below
• The ability of our customers, channel partners, contract manufacturers and suppliers to obtain financing
or to fund capital expenditures, especially during a period of global credit market disruption or in the
event of customer, channel partner, contract manufacturer or supplier financial problems
• Share-based compensation expense
• Actual events, circumstances, outcomes, and amounts differing from judgments, assumptions, and
estimates used in determining the values of certain assets (including the amounts of related valuation
allowances), liabilities, and other items reflected in our Consolidated Financial Statements
• How well we execute on our strategy and operating plans and the impact of changes in our business
model that could result in significant restructuring charges
• Our ability to achieve targeted cost reductions
• Benefits anticipated from our investments in engineering, sales and manufacturing activities
• Changes in tax laws, tax regulations and / or accounting rules
As a consequence, operating results for a particular future period are difficult to predict, and, therefore, prior
results are not necessarily indicative of results to be expected in future periods. Any of the foregoing factors, or
any other factors discussed elsewhere herein, could have a material adverse effect on our business, results of
operations, and financial condition that could adversely affect our stock price.
17