Cisco 2014 Annual Report Download - page 24

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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
• New business models for our offerings, such as other-as-a-service (XaaS), where costs are borne up front while
revenue is recognized over time
• 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 or accounting rules, or interpretations thereof
16